A beginner’s guide to successful crypto trading

Crypto Trading

When you invest, you primarily look for assets that will store your money, so you can make a passive profit and secure money by spending them on useless stuff or storing them without “putting them to work”. If you’re looking to do this, you’ll probably be a long-term investor, and it’s safe to go with popular cryptos, like Bitcoin (BTC) or Ethereum (ETH), because they’re unlikely to lose their value anytime soon. 

When you trade, on the other hand, you have to be constantly up to date with charts, price fluctuations, and news. Or, at least, it’s better to be so because crypto is like the sea – now it’s joy and sunshine, later there’s a storm. Now you’re in the bull market, and the next moment the market turns into a bear.

And because rainbows often arise after rain, you must keep in mind that you have to keep your mind clear and calm when you see red on the price chart, which affects your portfolio.   

What happens to Bitcoin after all 21 million are mined

The 21M BTC limit is what makes this coin so interesting. New bitcoins are being created and added to the blockchain a few times an hour, and it takes approximately 10 minutes to bring one into the “gang”. By default, the coin’s inventor wanted to mimic the finite quantity of physical gold; therefore, the number of Bitcoins launched per block is cut in half every four hours. 

However, the number of Bitcoins generated will likely never reach 21 million because it’s using rounding generators. The last BTC is not estimated to be issued until 2140, as the number of new Bitcoins issued per block decreases by 50% every four years. When BTC was first introduced, the number of new bitcoins minted per block was 50, but it has since dropped as of May 2020.

As of January 2022, 18.9 million bitcoins had been mined, with approximately 2.1 million remaining to be released.

What crypto trading actually is 

Cryptocurrency trading means speculating crypto price movements. Suppose you believe the value of a virtual currency will rise. In that case, you can go buy it, and if you don’t think it will bring you profits, just turn your attention to another cryptocurrency or even a digital asset.

On the other hand, leverage trading crypto magnifies both earnings and losses because the total size of your investment still determines your profit or loss. Before even considering entering the crypto trading market, it is critical to deeply understand the technologies and assets involved. 

How to trade digital coins for beginners

There are many different approaches to trading cryptocurrencies. To begin trading cryptocurrencies, one must first understand the risks involved as well as the laws that may apply depending on one’s jurisdiction, and decisions should be made accordingly. 

You’ll need to register on a crypto exchange if you don’t already own crypto. You provide the platform with the required information and buy and store your crypto. Going with the most popular currencies is a good start. However, checking other currencies, too, is a good thing when you’re a crypto enthusiast. 

How to make up your mind on a cryptocurrency 

If you feel like the price of a less traded coin is about to skyrocket, feel free to enjoy the ride, but only after you’re certain of the risks involved. Just remember not to overbuy, or buy from too much excitement, because you don’t want to squander your hard-earned money away. Similarly, whatever you choose to do regarding any investment, take a moment to check the Bitcoin price chart. Cryptocurrency is like a roller-coaster – full of surprises, so don’t rely on past performance because it won’t tell you anything about what value it will have one day or ten years from that moment on. 

Luckily, if you want to invest a lot in Bitcoin or any other cryptocurrency, some financial advisers can offer advice. 

How to register on an exchange

Luckily, you don’t have to do much research to find a cryptocurrency. You can watch YouTube tutorials and see which one is the most reliable and user-friendly. Be careful: when linking your card with an exchange, you must be certain that the platform uses good security tools so you don’t lose your crypto.

Then, fund your account via debit card or wire transfer, do crypto research, and choose a currency. Most investors choose Ether or Bitcoin at this stage, but you can look forward to them. However, trading with technical indicators is possible because these digital coins move more predictably than smaller altcoins.

Many cryptocurrency investors invest some of their funds in altcoins. Small and mid-market cap cryptos have more upside potential than large market cap cryptos, despite being riskier.

Choose a trading strategy 

There are more trading strategies when it comes to crypto. You can be a day trader, a swing trader, a position trader, or mix strategies.

When you are day trading, you can benefit from faster profits and better risk control, knowing that your portfolio is not affected by overnight market shifts. You basically enter and exit positions daily. However, you must be aware that you can also lose money faster. Plus, the appeal of momentary gains can lead to addictive behaviour.

If you choose to swing trade, you follow short- to intermediate-term trends, ranging from one day to one month. You make more informed, longer-term decisions, so you’re not that stressed about trading daily. Yet, you must develop discipline and patience when you choose to stick to investment, and remember that holding onto positions can make you emotionally attached to them. 

When you position trade or trend trade, you buy and hold crypto for longer. This strategy is less time- and nerve-consuming and makes predicting overall market trends easier. You can start small and increase your portfolio over time, but remember that you don’t reap the benefits in the short term because you’re waiting for the big hit. However, it’s not guaranteed that you’ll catch the big fish, so keep an eye on charts and news to be informed.

Both investors and traders look to make profits in the financial markets. There are many different approaches to trading; however, you should first understand there’s a difference between trading that and investing, and always be aware of the financial risks you expose yourself to when you choose to enlarge your investment portfolio.

Last updated Nov 30, 2022

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