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HOW TO START TRADING CRYPTO: 5 STEPS FOR BEGINNERS

HOW TO START TRADING CRYPTO: 5 STEPS FOR BEGINNERS 1 your right start in crypto 1024x576

Every day there is a person who, tired of the routine, decides to become a trader. Many people think that the cryptocurrency market is a very easy niche for beginners. And this is the first and most important mistake that leads to failure.

Interest in cryptocurrencies has grown considerably recently. This is due both to the fact that people are beginning to realize the importance and prospects of blockchain technology, and to the fact that many people want to make money from the rapidly growing rates of cryptocurrencies.

This article gives the basic aspects of crypto trading in the form of a brief instruction.

Step 1: Decide on the type of trade

Usually, there are three main types of trading – short-term, medium-term and long-term. In the cryptocurrency industry, there are only two main types – short-term and long-term. Mid-term traders here are quite difficult to distinguish.

What does short-term work imply? It is trading cryptocurrencies on a small time distance with the aim of getting a quick profit.

Given the high volatility, some cryptocurrencies can earn more in a month than some conventional assets in a year.

As for investments, they are usually made over the long term. A trader can buy a particular coin and hold it for 6 months, a year or longer. The ultimate goal of such investments is to profit from the difference in quotations, but only on a larger scale.

Step 2: Searching for an exchange, registration, depositing funds into a trading account

In order to get started in crypto trading, it is necessary to find a suitable platform. At the time of writing, there are many exchanges open in the cryptocurrency industry. Therefore, for many traders, especially for beginners, it is quite easy to get confused in this variety.

What to pay attention to? The first is how popular a marketplace is. The more popular it is, the higher chances are that the company is reliable and was not created to collect traders’ money.

However, it is important to consider a nuance – the more popular the company, the less interesting conditions it will probably offer traders. This may be due to higher transaction fees and so on. Such companies do not need any special offers for clients because they are well known and new users come to them all the time.

When the exchange is found, it is necessary to go through the registration procedure. Most often, it involves filling out a simple form. Some sites now require additional verification. This procedure is the provision of documents identifying the identity and place of registration.

Even at the stage of choosing an exchange, it is necessary to pay attention to the means of payment available for depositing. Some companies now offer the ability to deposit through cryptocurrencies only. Others allow deposits and withdrawals in both cryptocurrencies and fiat money.

Especially for our readers, we share a link to the platform that we use in our work and which we fully trust:

Step 3: Working with the chart

After the user has become a client of the exchange, it is possible to start trading. There are several variants – to begin at once, relying on intuition and advice of analysts, or to be trained in technical analysis, to learn more about the psychology of trading and then, fully prepared to make the first steps in the market.

The first option is a good one in its own way as it allows you to start trading almost immediately. But there are great risks of losing capital.

The thing is that it is rather difficult to predict the market fluctuations. And if you don’t have the proper knowledge you can only do it at random with minimal chances for success. Though it is unlikely you will want to play roulette with your own money.

It is possible to follow the advice of analysts, but they are sometimes mistaken. In addition, to understand such recommendations, it is necessary to have at least basic knowledge, so training in crypto-trading is necessary. We provide crypto trading courses for beginners: we will give you all the necessary basic knowledge and share our personal experience in trading. After this course you will be sufficiently versed in trading, technical and fundamental analysis, psychology of trading, you will precisely understand the principles of market operation and price change factors. After the course you’ll be able to analyze the market and to trade consciously, not at random: 

Step 4: Strategies

After gaining basic knowledge, one comes to understand the need for a strategy. Technical or fundamental analysis alone is not enough for success. It is crucial to study different tactics and learn how to use them in practice.

A cryptocurrency trading strategy is a set of actions aimed at making profits during trading. No one can one hundred percent guarantee a permanent profit. Nevertheless, a trading strategy will help avoid complete failure.

If you have chosen the learning path, there are plenty of materials on the Internet on this topic. Technical analysis is used not only in cryptocurrencies. A lot of interesting materials can also be found on various sites devoted to Forex and binary options.

In our ARTICLES category, you can get the necessary initial knowledge about crypto-trading and cryptocurrencies in general.

Why do you need this kind of knowledge? The fact is that stable profits in financial markets are possible only if a trader is disciplined and adheres to a trading system.

It means that a trader has certain rules of capital and risk management, as well as for entering the market and finding entry and exit points.

The strategy is a key factor of any trader’s success. It implies a certain combination of trading instruments (or application of just one instrument). Its essence is that in this way a user can analyze the market and get certain signals when to buy or sell a particular asset.

First, using or just building a trading strategy for cryptocurrencies, you need to understand that this is the most unstable market. You can see price fluctuations between 20-30% in just a few days. For example, if you were selling stocks on the USD EUR, it’s unlikely you would see any change in the indexes in a single day. Meanwhile, the index for a cryptocurrency can change by 100% or even more in one day.

Second, bitcoin is the key to everything. Consequently, prices of other cryptocurrencies often follow the price trend of bitcoin. If you are going to trade altcoins, the most important point of your strategy should be to “follow the bitcoin.”

As a rule, cryptocurrency traders do not engage in mining. Nevertheless, they are always aware of the costs of this procedure. For example, Bitcoin Cash had a high value because it is a hard fork (as of August 1, 2017), and miners needed a lot of capacity to produce new blocks. If the costs of mining increase – the value of the cryptocurrency increases.

Finally, you need to keep track of all political and economic news, because it greatly affects the market. For example, when Iran attacked U.S. military bases in Iraq, bitcoin went from $8000 to $8300. U.S. The result was an uptrend in the whole market. You cannot be a successful trader without being interested in news.

There are three basic principles of cryptocurrency trading. Based on this, traders have developed several strategies.

Buy&Hold. This strategy refers more to investing than to trading. People buy assets and leave them for a long time. Fans of this strategy try to forecast prices for several months ahead and monitor charts throughout that time. This strategy is based on fundamental analysis.

Swing trading. This strategy involves the use of the correction in the formation of a trend. That is, the trader needs to open a deal within the trend at the time of its correction. Swing trading implies the need to adjust to the trend.

Day trading. The name of this strategy speaks for itself. In this case it is a question of trade in the exchange within one trading session during the day. The positions opened in a certain day are not carried over to the next day or other session.

Scalping. It is high-speed trading with a large number of deals. A trader opens positions and closes them after 1-15 minutes. Ideally each deal makes a small profit but in the end these small amounts make a big income.

Step 5: Psychology

Psychology is very important in trading any market. This fully applies to cryptocurrencies as well.

The fact is that in the process of work, a trader can be seized by various emotions. The ability to control them is the key to success. Very often, beginner traders make mistakes that lead to significant losses of capital. For example, after a successful deal they open one more deal, increase the deal size or do not analyze the market before entering. As a result, a combination of factors leads to the fact that the deal is closed with a loss.

The same refers to losing trades. After them a trader may be afraid to enter the market and as a result he/she will not be able to open the positions, and will lose the profit. Emotions have a great influence on any investor. Before becoming a professional, the trader should learn to control himself, minimize the influence of such aspects as greed and fear on trading. 

The same refers to losing trades. After them a trader may be afraid to enter the market and as a result he/she will not be able to open the positions, and will lose the profit. Emotions have a great influence on any investor. Before becoming a professional, the trader should learn to control himself, minimize the influence of such aspects as greed and fear on trading. 

When trading cryptocurrency, you need to develop discipline, self-control, and be able to react quickly to volatile exchange charts.  All of this will allow you to earn more efficiently and minimize your losses. Everyone must remember, from amateur to expert, that in financial markets you can not only make money, but also lose money. Cryptocurrency rates are still subject to political and regulatory influences, their value is influenced by the reputation of the founders of the companies, information throw-ups about blockchain projects and plans for their further development, scandals and revelations. Nevertheless, there are simple rules of successful trading from the field of psychology that will reduce the risks when trying to make money from cryptocurrency and not only.

There are a number of problems that always hinder every amateur beginner:

– Excitement

– Fear

– Greed

– Unwillingness to learn new things, follow trends, and spend time on advanced training in the field of trading

– Imaginary visualization of results

All these problems have psychological aspects. Emotions, feelings and desires significantly affect trading decisions made by a trader. It happens quite often not only on traditional exchanges, but also in the cryptocurrency sector.

A person, who wants to become a good trader, should always remember that the most important trading tool is not a computer, not a news service or even methods developed by a trader. It’s him!