Crypto trading is one of the leading avenues to generate income in cryptocurrency and web3 as a whole. As prominent as it is, lots of people haven’t the slightest clue how crypto trading goes. You might have even considered it at some point, but the whole thing still seems like a mystery.
Demystifying crypto trading is precisely the purpose of this piece. From the very explanation of crypto for the freshmen to a step-by-step guide on trading properly. There are all the answers you need.
What is Cryptocurrency and How does it work?
Warren Buffett, American Billionaire – “Cryptocurrencies basically have no value, and they don’t produce anything. But that doesn’t stop people from wanting to speculate”.
Cryptocurrency is a digital currency secured by cryptography and based on decentralized networks. In simpler terms, consider cryptocurrency to be some digital money that is created and stored differently from the fiat you know. The way fiat currencies are managed by central banks, cryptos are facilitated by blockchain.
The blockchain is neither centralized nor controlled, a distinction that makes up the primary identity of cryptocurrency. Just like other currencies, cryptos are used to conduct payments and exchanges, for several purposes. Here are some of the world’s most popular cryptocurrencies that you may have heard of;
- Bitcoin
- Ethereum
- Dogecoin
- Solana
- XRipple
These tokens may be different, but they’re all created, stored, and transacted the same way.
What is Cryptocurrency Trading?
With a grasp of what Cryptocurrency is, the concept of crypto trading should not be foreign. It is essentially the buying and selling of cryptocurrency, just like the foreign exchange market. Like a proper marketplace, buyers and sellers are constantly trading crypto assets within any particular trading ecosystem.
The concept is pretty simple and basic. You buy when you believe the value of the crypto asset will appreciate and you sell otherwise, making your profits.
How to Choose Investments When Trading Cryptocurrency
Randi Zuckerberg, American Businesswoman – “I always tell people, please don’t put more than 1- 2% of your net worth in crypto. Please don’t invest more than you can afford to lose.”
Considering the thousands of crypto assets circulating today, the question of which ones to trade per time becomes intricate. Especially as a beginner, the urge to move in and start trading blindly is usually present. However, like any other trading endeavor, you need to know the market metrics to ascertain what to trade at the time.
Here are some of the most important things to undertake when choosing your currency pairs;
- Technical Analysis: In simple terms, technical analysis studies the market indicators for a particular asset to determine market entry and exit. It involves looking at the basics, such as trend lines, support and resistance levels, and indicators. Overall, technical analysis helps you determine when a particular asset can be profitable, whether you are buying or selling.
- Study Market Factors: Whether you make a profit in crypto trades depends more on when you open a market position than on how long you hold it. Fundamentally, market optics like price trends, trading volume, volatility, and major news can help determine which asset is perfect for trading.
Note that at every point in time, every crypto asset you want to trade is either pumping, dumping, or stable. Making your profit is strictly a matter of when you enter and how long the market moves in your direction. There are a dozen other things to consider, but we’ve provided the crux to get you started.
How to trade crypto for a beginner?
How to trade crypto for a beginner? Typically, all you need for trading is merchandise and a marketplace. Crypto trading is no different. Having established how to choose crypto assets to trade, we’ve created a step-by-step guide on how to get started executing trades.
Open a crypto brokerage account
Crypto brokers, mostly called exchanges, are the marketplace for crypto trading. To get access to trading services, you’ll need to register an exchange account to get started. Given the global web3 surge, there are dozens of reputable crypto brokers that are safe, secure, and beginner-friendly. Below are the options we’d recommend;
- Coinbase
- Binance
- ByBit
- Bitget
These broker options are used widely by millions of people on Web3. They have a simple registration and verification process, and their service charges are on the low side.
Fun Fact: Memecoins like Dogecoin and PepeCoin have surged in value thanks to viral memes and celebrity endorsements, proving how humor and hype drive the market.
Fund your Crypto Trading Account
To open a trading position with any crypto broker, your account has to be funded. Fortunately, many crypto exchanges allow users to fund their accounts with fiat and cryptocurrency. There’s also an option for peer-to-peer transactions in crypto.
Evidently, crypto’s increasing popularity has led to its mass adoption. Today, many online services, including casino gambling providers, have adopted crypto for deposits and withdrawals. As such, users only need to explore quick withdrawal gambling sites to find platforms with diverse payment options.
Open a position
With your exchange account set up and funded, you can open trading positions. Usually, every exchange has a slightly different process for making trades. Typically, you’d want to select your crypto pair, then select long/short, buy/sell. After which you’ll set the margin or purchase amount.
There are also meters for stopping loss and taking profit, which you can factor into your position. Overall, you should keep an eye on the direction of the trade and take profits when you deem fit.
Fun Fact: Unlike the stock market, the crypto market never closes. It operates 24 hours round the clock, which makes it possible to start trading crypto anytime, anywhere in the world.
Conclusion
Crypto trading has never been simpler to engage in than it is today, with ample resources available. In fact, many crypto brokerage exchanges offer special guides and courses to beginning traders on getting started.
Essentially, you’d need an exchange account and ample knowledge of the trading basics to get started.
