In this material we will look at the features and principles of cryptocurrency trading, which will be useful for both experienced traders and anyone who is just starting to get acquainted with the financial markets.
Unlike other financial instruments, cryptocurrency is characterized by higher volatility, which increases risks, and analytics also has its own characteristics.
What is crypto trading?
This is the purchase and resale of digital coins. Almost everything is the same as with stocks, bonds and other securities – it’s just that the instrument is a little different, trading it is somewhat different, just like the rules for trading cryptocurrencies. Using Immediate MaxAir ai it will be easier for you to analyze the market.
Key Features of Cryptocurrency Trading
- Crypto exchanges operate 24/7 – there is no need to close a position at the end of the trading day or week.
- The threshold for entering digital coin trading depends on your goals. To master the skills, an amount of $100 or more is enough, approximately the same as in Forex. For normal trading and significant earnings, you need to have $5,000 of free money on hand.
- Cryptocurrency does not correlate with other, more traditional assets. And even more – when global indices decline, buyers in digital markets become more active. Crypto is becoming a “safe haven” for investors in times of crisis. And even conservative investors try to have at least a small share of different types of cryptocurrencies in their portfolio in order to increase profitability.
- Increased volatility is both a minus and a plus. Minus because of the risks, but the profitability in this regard is potentially higher. This is what attracts the attention of investors.
- The convenience of crypto is that it can be traded on the spot market, without the use of leverage with its commissions, stops, margin calls and other additional risks.
- Significant growth prospects – the digital market is still incomparably small compared to the stock market and, even more so, forex. And even if you buy coins “at highs” and the price falls, you can leave them and store them for a long time – someday the market will recover anyway, some coins will sink into oblivion, others will fall even more, but some of them may rise in dozens of times and will bring you good profit. The only point is that trading illiquid assets is risky. And you need to choose coins carefully.
Take these features of cryptocurrency trading into account to ensure your profits are stable.
Principles of crypto trading
- At the start, buy very little crypto so as not to be afraid of losing your deposit if something happens. Keep the bulk of your deposit in a secure wallet, not on an exchange.
- Practice on small transactions (1-2% of the deposit). You will always have time to increase the volume.
- Do not buy crypto on credit, do not borrow money from people, much less from a bank. And don’t believe those who shout that it helped them achieve stable results. And to those who say that you can get rich in crypto with just $100.
- Diversify your risks through different coins and trading platforms – this way you won’t lose everything at once. All coins have their pros and cons, don’t look for ideal options, they don’t exist.
- Buy low to sell high. Buy from pessimists to sell to optimists. And don’t follow the crowd – do the opposite.
- Choose liquid cryptocurrencies – and in general, allocate the majority of your cryptocurrency portfolio specifically to Bitcoin, it is the least volatile and grows steadily, and other coins often lose value in relation to Bitcoin.
- You should buy on rumors and sell on facts. — at the moment rumors appear on the market, a new wave of sufficient power is formed, which can quickly create a strong trend. This is precisely why you can use rumors – you just need to correlate them with forecasts and other analytics.
- Reinvest only part of the profit, and withdraw the other part into fiat and spend it. You need to see that there is a profit, albeit small at first. This inspires you to move on.
- Don’t regret the lost profits and don’t envy those who earned more than you. You don’t know how he did it and what he risked. Trading does not equal get rich quick.
- Plan all your trades in advance and don’t sit too long in front of the monitor. Don’t take time away from family and other important areas. Set a routine and stick to it.
The features of crypto trading are not very different from the rules of classical trading. All you need to do is follow them.
How to start trading cryptocurrencies?
- Start reading and watching videos on the topic – learn the terminology and accumulate a base.
- Develop skills in technical and fundamental analysis – during the trading process you will constantly analyze charts, and you need observation.
- Develop a strategy based on everything you’ve learned. Without it, there is no point in going further on the list.
- Choose a reliable crypto exchange and register with it. How is the topic of a separate large article. In short, you need to go through identification, open a wallet, and link a bank card to it.
- Complete an account.
- Start with small volumes and increase them gradually. Control risks.
Conclusion
Basic advice to everyone who wants to master crypto trading from scratch – do not get carried away at the start by various indicators and all sorts of other people’s strategies. There are a huge number of indicators on the crypto market, you will get lost in them.
At the start, you need the basics of trading and risk management, several basic graphic figures and basic indicators – moving averages, Bollinger bands, MACD, stochastic, RSI.
Don’t overload yourself with theory without practice – this will lead to disappointment and confusion in your head. To achieve mastery in trading, you need a balance between theory and practice. Therefore, take your time and move step by step. Your profit will not run away from you.