A crypto trading study found that about 83% of experienced traders are making a profit. However, you have to learn how to trade before you start cashing in.
If you want to be a part of the action then you need to begin with the basics just like with any new skill.
Start by reading this guide to crypto trading for beginners.
What is Crypto Trading?
There is a difference between when you buy cryptocurrency and when you trade it. Buying it usually means that you are going to use it later for a purchase or hold onto it for a while until the price goes up.
Trading crypto, however, means that you have to watch the market for crypto trends and know when to sell it for a profit. This is similar to trading on the stock market.
You have many assets or cryptos to choose from and it is up to you to research to find one that may be profitable. You can choose from top coins like Bitcoin or Ethereum or search for smaller coins that may have potential like alchemy pay.
Types of Trading Strategies
When you open a trading account you have several ways to start trading crypto. Each one will depend on your experience, availability to watch the market, and investment goals.
The types of trading include:
- Scalping- short-term buying and selling, making small incremental profits
- Day Trading- buy and sell within the same day, closing a trade and making a profit before the day ends
- Swing Trading- hold coins for several days, checking the market occasionally to analyze trends
- Position Trading- keep a coin for a long term, analyzing weekly/monthly trends for larger overall profits
For a beginner, you may want to stick to swing trading since it requires less time and market analytical skills.
How to Start Crypto Trading
Getting started with trading requires a few simple tasks. All you need are some funds and a computer or smartphone, then follow the steps below.
Step One: Find an Exchange
You will need to create an account on a market exchange like Binance or Coinbase (depending on what country you live in). Complete a KYC identity verification to complete your account.
Step Two: Purchase Cryptocurrency
Once your account is verified then you need to purchase cryptocurrency using your country’s fiat. Use your debit card or bank account to transfer money into your crypto account.
Step Three: Pick a Coin
This step may require some research. You want to choose a coin that has the potential to see a rise in value, so choose carefully because once you buy it then you are stuck with it.
Step Four: Choose a Trading Strategy
The best crypto trading strategy is one that you are comfortable using. The coin you choose may also dictate which strategy will work well.
Step Five: Use a Crypto Wallet
You need a crypto wallet to safely store your coins offline or on a crypt wallet app. Short-term trades can stay on the exchange but your profits or long-term trading coins should be kept in a separate account.
Crypto Trading for Beginners
You can use this crypto trading for beginners guide to help you learn the ins and outs of the crypto world. However, never expect to become rich overnight. You also never want to use money that you can’t afford to lose.
Manage your profits using articles found in our Finance section.
