Since the development of the first cryptocurrency in 2009, crypto enthusiasts – both individuals and firms – have engaged in the world of crypto to earn or increase their funds. So you want to make a difference in your personal finance without having to take another job, and entering the world of crypto trading is at the top of your list, but you have no idea what to do? Check out this guide we’ve prepared on how to dive into the world of cryptocurrency trading.
Cryptocurrency trading
Cryptocurrency trading is the buying and selling of cryptocurrencies for profit in a digital currency exchange known as crypto platforms – a place where crypto people perform transactions. The trading highly depends on the values of the coins in the market, which is widely known to have a highly volatile nature, causing the values or the prices of the digital coins to constantly undergo sudden changes from time to time.
Due to this behaviour of the market, earning profits on one day does not guarantee constant or higher earnings for the next days. There is indeed a list of cryptocurrency billionaires who profited from crypto trading, but it’s no guarantee that everyone who made investments in the field will earn a huge amount of money. Success in this field highly depends on how you approach the market’s volatility.
Cryptocurrency is not just about investing money and leaving everything to luck and fate; this field requires deep knowledge and trained skills. So before you enter this industry, you must come prepared. It’s recommended to do extensive research about crypto in general, know the tips and techniques that can lead your career to a successful path, and master the crypto scams that should be avoided to prevent losing your hard-earned funds.
Diving Into The Crypto Trading World
As mentioned, it’s crucial to know the things that you need to master before fully entering the world of crypto trading. Being a trader means knowing about cryptocurrency and trading. So if you have mastered the basics and are eager to jump right into the crypto-verse, you’re in the right place. Check out this step-by-step guide that we’ve prepared to help you start trading in cryptocurrency.
1. Open a crypto trading account
While researching allows you to learn things, there’s no better way to fully learn how to trade cryptocurrencies without hands-on experience. The most effective way to learn the art of trading is to dive in and explore the field. To do this, you must complete the first step – open an account in a crypto trading platform. This step is crucial because the platform you choose can either make or break your career.
With the long list of crypto trading platforms in the market, it can be tricky which one to choose and start your career with. Luckily, there are platforms like Kraken, Bitcoin Motion and Kucoin considered reliable to trade safely. Choosing a platform can be difficult, but this is where your research jumps in as there are various resources about the different crypto platforms online that contain the benefits and advantages of each exchange. Talking to an expert, reading reviews, or joining crypto communities are also great ways to learn about the platforms. One of the three platforms listed above – the Bitcoin Motion one offers a link to crypto brokers and experts, where you can reach out to the brokers before signing up.
There are important main features that your chosen crypto platform must-have. In addition to its benefits that align with your goals, there are things that you should look into, such as reliable security and privacy, customer service availability, fast transaction speed, the number of available coins, and user-friendliness of the application.
2. Buy cryptocurrencies
After owning an account on your chosen crypto platform, the next thing that you need to start trading is purchasing cryptocurrencies. This step is as important as choosing your platform as it involves your funds and where it might go. Newbies in crypto trading like you are highly recommended not to invest huge amounts of money right away – partly because you are still new to the field and partly because of the market’s volatility.
There are various ways to buy cryptocurrencies safely, but a centralised exchange is the most accessible method for beginners. Centralised exchanges function as a third party that handles transactions to give customers transparency that they are getting what they pay for. On the other hand, there are a few online brokers that offer access to cryptocurrencies and stocks.
3. Follow a trading strategy
There are countless ways to profit from trading cryptocurrency – following strategies. Trading strategies help you organise those techniques into a clear and concise framework that you can follow, which allows you to monitor and optimise your cryptocurrency strategy. These strategies are an extensive plan for all your trading activities. You can think of it as a framework you create to guide you in all your trading journeys.
Trading strategies can be divided into two: active and passive trading strategies. Active strategies need more time and attention as they involve constant monitoring and frequent portfolio management. These strategies include day trading, swing trading, trend trading, and scalping. On the other hand, passive trading strategies are a more hands-off approach and require less time and attention. This type of strategy includes a buy-and-hold strategy and index investing.
4. Diversify your investments
The thing about crypto trading is that you will have to face the risks that come with it. Due to the volatile nature of the market, it’s recommended to not invest all your assets in just one cryptocurrency. To efficiently diversify your portfolio, you need to seek financial advice from a professional. Cryptocurrencies are considered high-risk investments and should only make up a tiny fraction of your overall portfolio.
Investigate the choices available to you through research. One of the aims of traders is to manage risks while maximising profits. When trading in cryptocurrency, you must be conscious of the many hazards that might influence your assets. Diversifying your crypto venture is among the most efficient techniques to reduce the risk of losing all your hard-earned funds.
Conclusion
Over the past years, Cryptocurrency has indeed taken over the world by storm, being gradually accepted by the different sectors of businesses around the world. With its popularity and the benefits, it won’t be a surprise if crypto will be incorporated into everything that we do one day. While this industry is profitable, know that this field comes with risks. If you’re ready to jump in and join this trend, it’s recommended that you follow the steps mentioned above to successfully enter the world of crypto trading.
