So you finally want crypto trading tips, advises and prolly, you don’t really know crypto trading meaning, but have heard about how much money you can make on day-trading cryptocurrency, right? Undoubtedly, there is much profit in trading cryptocurrencies, but the success doesn’t happen as fast as it seems.
Cryptocurrency trading can be very risky in such a way that you can actually make lots of money, but can also loose all your bitcoin investment as well.
Well, if you’re still interested in the learning how to make money with cryptocurrency trading, this step-by-step guide will show you almost everything you need to get started with trading cryptocurrencies for beginners.
I am going to give you some information on how the whole cryptocurrency trading started, and also show you the difference between short-term and long-term trading, including the pros and cons of the periodic terms.
By the time you’ll finish reading this detailed cryptocurrency tutorial for beginners, you will know how to start investing in cryptocurrency trading.
You will also master the skills to maximize your profits using a unique cryptocurrency trading strategy during the whole process of doing it all on your own.
Now, let’s dive straight into cryptocurrency trading for beginners and how to make money by investing in it.
Table of Contents
Crypto trading meaning
Cryptocurrency trading is the process of exchanging cryptocurrency assets using theas the market place.
Each of the cryptocurrency trading platform must have some functionalities, just like any foreign exchange (Forex) platform online.
Brief history of crypto trading
As we all know already, bitcoin happens to be the very first cryptocurrency to emerge in the virtual or digital currency world, and it was released in 2009.
As at then, it was only bitcoin that’s available, so it’s kind of impossible to trade since bitcoin was the only crypto coin as at then.
Few years later, more cryptocurrencies were created and that was when it became possible for people to start trading cryptocurrencies.
The whole idea is, you trade one crypto coin in exchange for another so you cam make profit from the volatility of the prices – just same thing as real-world stock trading or foreign exchange.
However, experienced (professional) traders uses different tools to find right profitable gems at the right time.
These tools include software that can be used to analyze history of the price changes or increases according to the historical data.
Short and long-term crypto trading
Now we’re going to discuss about short-term and long-term trading alongside their advantages and disadvantages.
Short-term cryptocurrency trading
Short-term trading is when you buy cryptocurrency assets to hold for a short while, before exchanging it back to the basic currency (mostly Bitcoins) to make either profit or lose.
This short time can be minutes, hours, days, weeks or months.
Pros of short-term trading
The major advantage is that you can make huge percentage of profit during the up trends, unlike fiat currencies in forex where you only make just 1% each day.
Now that there are so many cryptocurrencies and the whole market is popularly known, you can actually double the whole of your total investment overnight.
Since it’s based on percentage profit per investment at a time, you can use huge number of bitcoins to earn more bitcoins.
Cons of short-term trading
The cryptocurrency markets are so volatile to the extent that prices of each cryptocurrency changes very fast. This means that you will need lots of time to carefully analyze the market trends.
You need to have full control of your emotions because you cannot always win. This is one thing you need to have in mind whenever you’re trading cryptocurrencies.
It is very stressful to follow the price fluctuations than you ever imagined. Learn to accept loss because whether you like it or not, you must loose to gain (if you know what you’re doing).
It’s equally not a Get-Rich-Quick scheme. Short-term trading goes with short profits according to short times, so this means you must know how to read charts accurately.
As a beginner, you will also need to learn how to read the charts in a little while.
Additionally, for someone to make huge profits in cryptocurrency trading, quite a large crypto investment must be made. And that’s one thing you may not be comfortable with, as a beginner.
Long-term cryptocurrency trading
This is where the popular cryptocurrency jargon, HODL, is mostly heard often. You can only find it in bitcoin forums and other online communities (e.g. crypto trading reddit), where cryptocurrencies are being discussed.
If you don’t know what it means, read my previous post on cryptocurrency terms, as HODLing is not a word you can find in the dictionary.
Due to the rapid change of cryptocurrency prices, most investors will choose to save the stress of watching the daily charts by buying and holding (i.e. HODLing) their preferred cryptos for a longer time to make huge profits.
A great example of this (even though i missed on this opportunity myself), lucky investors who bought bitcoins in 2011, when it was just $0.35 per bitcoin.
If they held it from then until late 2017, they could’ve sold each bitcoin for almost $20,000. That’s over 57,xxxx% percentage profit on their initial investment!
That’s a whooping profit right? Lol… but there’s a lot to that anyways. Let’s discuss the advantages and disadvantages of long-term HODLing.
Pros of long-term HODLing
The main advantage is that it’s very easy as you don’t need to have the knowledge of reading the daily charts, and it saves you much time to relax without always thinking of the investment since is for the long haul.
You don’t have any business with constantly checking the price actions of the cryptocurrencies, and you can actually, get started with a smaller amount of investment unlike that of short-term trading.
Cons of long-term HODLing
You can loose large amount of money, if your investment made is on a Pump and Dump (Shitcoin).
Most times, you can loose a big opportunity to earn more money on short time up trend (i.e. huge increase in market bitcoin value over a short period of time).
Bad news can come up against your investment portfolios with you knowing on time, because you don’t always check the news or read the price movement charts.
Now that you know some things about the two different types of cryptocurrency trading, let’s take a look at things you should always avoid when trading cryptocurrencies.
How profitable is cryptocurrency trading?
Crypto trading is highly profitable. Especially, if you have a very good day trading cryptocurrency strategy.
You know one thing i have discovered about data science, with new innovations comes an easier new opportunity to make money.
Optin to start trading cryptocurrencies is one of the complete power to change your financial situation. The potential is just so strong that, you can make a living off crypto trading alone.
This is the best way to say one of the finest goodbye to your 9 ~ 5 daily job.
Currently, there are many professionals in cryptocurrency trading struggling to increase their Return On Investment (ROI) winning ratio.
Cryptocurrency market is still new, and have not been really dominated by the institutional investors. Cryptocurrency traders can still make up to 1000% from their investment returns, due to the wild swings of volatility.
Although, the unpredictable movement of cryptocurrency prices do scare many people off, but seasoned traders are riding it as wild as they could, as well as making huge profit, while doing so.
So let us see why cryptocurrency is highly profitable.
Firstly, when i say Y.E.S, it always comes with an in-depth meaning like this;
Y – Your mindset (positive or negative)
E – Experience (good or bad)
S – Strategy (long-term or short-term)
So this is exactly what i mean, when you get me to say, yes in any situation. Now let’s get started with the reason i said that the crypto trading is profitable.
1. The market is totally free
In the cryptocurrency market, everything goes. Most of the most popular exchanges operates with little or no regulation at all.
The implication to this unregulated market is that crypto whales can play fraudulent activities like pump and dump, spoofing and what is called, wash trading. The market is highly manipulative in its nature.
Money held in most exchanges are not insured. This is to say that, fake exchanges can make away with your money any time they want. This is one of the biggest risk of investing in an exchange, without researching on it thoroughly.
Before starting to invest your hard bought cryptocurrency in an exchange, especially if you’re with the intention of swing trading cryptocurrency, try to do a thorough research on the exchange first, before putting your money into it.
Although, cryptocurrency market comes with a bigger risk on your entire investment in the market, it can still yield you a very high profit income.
Crypto market is control by investors for all other investors. If the market crashes, then everything plays out itself.
Unlike stock and Forex trading markets, cryptocurrency trading market runs 24/7 continuously. No weekends, no time-out. Since the market doesn’t sleep, it creates a cleaner price patterns for all trade analysis.
2. Not dominated by high frequency super computers
In stock or forex trading, large investment banks do spend million dollars in purchasing high frequency super computers to instantly outperform other person traders in the market.
These super computers have in-built powerful algorithms to trade stock in a matter of milliseconds – even less. Thus, retail investors are simply thrown of the edge with such powerful technology.
The banks can even buy off the market to manipulate towards their own price target, which they will make huge income, when the push the items back into the market with the new prices.
3. The cryptocurrency market is driven by dumb money
The protocols to enter trade with bitcoin and altcoins is much lower, unlike in the legacy markets, where each trader are all competing against the unbeatable multi-billion dollar companies.
These companies has the financial ability to buy computers and keep hire full-time position for professional traders.
In the crypto market, anyone can start cryptocurrency trading with little investment (i.e. few dollars), and minimal requirements for registration.
This is why there are more each trader in the crypto data-science market than big financial institutions.
These people always have good day trading cryptocurrency strategy to make profit on daily involvement in the market.
Most of these people are not even full-time traders as par say. They do trading as a side hustle kind of hubby, while still doing there daily jobs.
These traders comes with the intention to only buy when the price is low, and sell when price goes high. But that is not the case for amateur traders that trade with emotions and FOMO.
The term Dumb Money is used to capture buyers that buy high and sell low.
They emotionally chase the market price movement, and that’s how they will buy in spike of cryptocurrency prices due to FOMO (Fear Of Missing Out), then panic-sell when price is going low.
Thus, incurring loses on their first investment, and that is why markets driven by dumb money are more volatile and easier to predict.
4. Settlements and arbitrage is super fast
In stock trading, buying and selling settlements can take days, due to the underlying, inefficient technology.
Settlements are handled and processed through centralized bodies such as, Depository Trust and Clearing Corporation (DTCC).
This third-party system of settlement takes time, and that’s exactly one of the reasons the cryptocurrency was established to cut third-parties in the financial transaction of people.
Most companies that serve as third-party in stock trading system normally practice what is called, naked short selling of stocks with the income, before sending it to the people.
Blockchain speeds up settlement in few seconds, if not instantly. There is no third-parties in the cryptocurrency trading market.
This is what sometimes, lead to arbitrage opportunities where traders by from an exchange as fast as possible, and sell it fast on yet another exchange to make huge profit under some couple of minutes.
5. You have control to your financial assets
In cryptocurrency trading market, you have many ways to keep your financial entitlements away from the market itself.
Since cryptocurrency is compared to Gold and Diamonds, it also has the power to increase in worth over time, but in stock trading, worth of financial asset depreciate most of the times. This is why they cannot be stored.
Cryptocurrency has specialized devices and software to store them safely, and away from the risk of loosing them through theft and hack attacks.
This particular feature of cryptocurrency is what made good number of investors to shift from investing in stocks to investing in cryptocurrencies.
Things to avoid in trading cryptocurrencies
One thing you need to always keep in your mind whenever you’re trading cryptocurrencies is that you could loose all your investments at an instant.
Therefore, you should never trade with an amount of money you cannot afford to loose if anything should go wrong (or against your wish).
The way you handle your loses will determine your success in cryptocurrency trading. Never try to earn all your loses by unnecessarily investing larger amounts.
This is actually the kind of investment mindset that causes most people to loose a lot of money.
Things you should be careful of before and during trading:
1. FUD – This term stands for Fear Uncertainty and Disinformation.
It is popularly used in both real and crypto world to indicate when group of people or organization tries to make people not to invest in a particular asset by telling them that they will gain or loose their money.
Of course you already know that, nobody will like to loose money anyhow, especially when you’re being told already. So these organizations mostly tag assets as scams which will definitely crash just to stop people from patronizing it.
Advice: Always do you own research careful before trying any trade. Use Google search, it’s always our best internet friend.
2. Persuasions – Never get influenced by other people’s opinions as you’re simply not the only person that wants to profit from cryptocurrency trading.
You can watch YouTube videos, but don’t go straight into believing everything you see in those videos. Some of them are promoted contents.
3. Lack of knowledge – Don’t enter any trade without a full knowledge of how the market operates.
Doing this can put your investment at a serious risk, and your money can also vanish instantly if you’re not very careful when reading any chart and researching on the historical data of an asset.
Having read to this point of the guide, guess what’s coming next? It’s time to learn how to trade cryptos!!
How to trade cryptocurrency?
Getting started with cryptocurrency trading, you will need all the important basic tools for you to trade the right way.
Basically, the tools you’ll need ranges from a place to store your cryptocurrencies, chart reading tool and a platform where your will be trading.
- Cryptocurrency exchange marketplace
- A cryptocurrency or Bitcoin wallet
- A cryptocurrency investment site
- Cryptocurrency trading patterns
- Cryptocurrency trading app for reading charts
A Cryptocurrency exchange marketplace
If you’re looking to start trading cryptocurrencies, the first thing you need to do is getting yourself some basic coins (mostly Bitcoin or Ethereum). And the easiest way to do it is buying from a reputable crypto exchange marketplace.
The fastest way to go about it is buying them with a credit or debit card.
They both supports buying cryptocurrency assets with debit or credit card.
To secure your new cryptocurrency, you will need either a hot wallet or cold wallet. It is strong advised to always store your cryptocurrency investment with an offline cold wallet.
However, as a starter you may want to try out with a very small amount of investment, you can get a mobile software wallet, Jaxx or Mycelium to store your crypto assets.
Even though these mobile wallets are secured to an extent, it’s not recommended to store bigger amounts with this kind of wallet, because they are hot wallets.
This means that they always connect to the Internet to read your coins. Offline hardware wallets are always the best wallet due their full security from hackers.
Cryptocurrency investment site
To start trading cryptocurrencies after buying some amount of bitcoin, or ethereum which are basically known as the base cryptocurrencies, you will need to choose a reputable
After that, you will start trading your basic coins in the exchange for other cryptocurrency trading pairs.
Binance is mostly recommended to start with, as they’re still new, but one of the fast growing
The trading platform has a good number of both established coins and most of the newer altcoins than some other cryptocurrency trading platforms.
This will help you to spread your investments appropriately. Don’t ever put all your eggs in one basket (that’s, buying only one asset with your entire bitcoin investment) to avoid major regrets.
If you don’t have an account already with Binance exchange platform, click here to create one immediately.
Warning: Avoid using any other link aside the ones provided on this post to avoid phishing or hacking.
Cryptocurrency trading patterns
Most people who start cryptocurrency trading, always try to create, or find the best pattern that suits their goals.
It’s either you’re trading with just fundamental analysis, or that you know how to do cryptocurrency trading using the technical analysis (reading charts for professionals).
All the same, the process still needs lots of understanding and knowledge on how the market at large operates, or you can loose huge amount of money instantly.
Final Cryptocurrency Trading Tips
Unlike Forex trading, cryptocurrency trading occurs 24/7. This means that the market is continuously open at any time.
Make sure you have set out dedicated cryptocurrency trading hours. If you are following cryptocurrency trading strategy most investors update on reddit, you will find out that they have specific time they trade crypto-coins online.
Trading volumes differs during the day depending on your region as many other traders from different countries enters the market at different times.
I recommend using hardware wallets like Ledger Nano S to fully secure your investment, because Ledger hardware wallets are among the best cryptocurrency wallets that you can use to save your investments fully in offline mode.
The entire market is so volatile, which means that it can skyrocket or recline by large percentages in a matter of times. Just know that trading cryptocurrency can put your capital at a bigger risk, so invest what you can loose.