Crypto coins are a risky but at the same time very promising asset, which is suitable for trading and investment. The instability of traditional financial markets and the global economy are attracting increasing attention to it.
To become a successful crypto trader, you need to put a lot of effort into it. You should keep a close eye on the industry so that you always know about the most promising projects and top crypto funds. ChainBroker can help you with this. It is the most reliable platform for getting all the latest news. You can also find recommendations from leading experts in the industry on the website.
In our article, we will tell you in detail what steps you should take to succeed in crypto trading.
Contents
Why Start Investing in Crypto Coins?
For people unfamiliar with the world of cryptocurrencies, the question is still why invest in them and what the benefits are. The main feature of trading in digital assets is the increased volatility. This is a good opportunity to make money, but the risks are much higher.
In recent years, crypto-trading has greatly expanded its horizons. More and more new and promising coins appear on the market, which can become a profitable investment.
What Is Crypto-Trading?
Let’s first understand the definition. In principle, it is very similar to CFD, stocks, or currency pairs. The main difference is that crypto coins are used as trading instruments.
The essence of crypto-trading comes down to the fact that we first need to buy and then sell digital currencies at a higher price.
Crypto markets are often researched using the same technical analysis methods as fiat currency markets. Many people prefer to trade Bitcoins based on trading volumes and indicators, often using adapted classic trading strategies.
However, the cryptocurrency market can offer many surprises. Digital assets can change in price due to various events: a deviation from the project development plan, a sudden change in the popularity of the coin among miners, etc.
In this case, cryptocurrency quotes are highly dependent on the dynamics of the Bitcoin price. This digital asset occupies a large part of the market, about 50% of transactions are conducted with the help of Bitcoins. Therefore, BTC is the basic market that sets the trend for the entire industry.
What Affects the Crypto Market?
Demand and supply affect the value of cryptocurrency more than, for example, the stock market. However, crypto refers to decentralized finance. It is not affected by political and economic processes or the state of the economy of a particular country or region. And traditional markets are highly dependent on the above factors.
However, there are some other factors that affect the crypto market:
- Cryptocurrency trading on global cryptocurrency exchanges, integration into trading platforms and e-commerce systems;
- Market capitalization;
- Attitudes towards the coin by major companies, the media, and experienced crypto traders;
- News events that shape risk appetite or tolerance.
With these factors in mind, you’ll be able to anticipate changes and be ready to take maximum advantage of the situation.
Tips for Beginners How To Start Trading Cryptocurrencies
Novice traders often wonder how to start trading cryptocurrency, CFD, or crypto-options here and now. A strong warning – don’t do this!
Before investing in cryptocurrency, you should:
- Learn how to analyze price charts and trading volumes;
- Pay attention to past performance and identify patterns from quotation history;
- Take part in buying and selling deals and controlling price movements;
- Learn profitable trading strategies.
To start trading cryptocurrencies, there are a few steps you need to take:
- Sign up at one of the cryptocurrency exchanges. For new traders, it is recommended to choose well-known platforms with transparent conditions and lower fees. Alternatively, register with a broker that provides access to cryptocurrency derivatives.
- Fund your exchange account with a credit or debit card, bank transfer, or any other way for an amount you don’t mind losing.
- Choose a crypto coin and start trading.
Digital currency quotes are always on the move, this is one of the distinctive features of the market. On the one hand, there are plenty of opportunities to make money, but on the other, there are additional risks. Therefore, beginners need to understand the principles of exchanges and market operation and learn the basics of cryptocurrency and margin trading.
Pay Attention to the Trading Psychology
This is a very important point. No matter where you trade: cryptocurrency exchanges or the stock market. All users are subject to emotional behavior.
Traders buy and sell under the influence of both logical and emotional factors: hopes for higher quotes, news, fear of loss, desire for more money, etc.
An example of emotional trading is “locked traders”. Avoiding losses they do not close positions as soon as there is any sign of reversal. And for a long time, they hope that the price will start to move in the right direction. The result is closing deals with heavy losses when all hopes come crashing down.
The most important component in trading – controlling your emotions. You can achieve a steady profit only with consistent analysis.
Risks and Opportunities of Cryptocurrency Trading
The decentralized trading system provides crypto-trading with a certain freedom. The cryptocurrency market is not tied to classical financial institutions, it is weakly influenced by economic processes and regulatory authorities. However, without knowing the basics of crypto analysis, novice investors can lose their funds in just a few unsuccessful deals. Therefore, caution should be exercised when trading cryptocurrencies.
Also, pay attention to operational security. All transactions in the cryptocurrency market are final and not subject to cancellation. This allows unscrupulous exchanges and brokers to profit from gullible newcomers. However, if you work only on proven exchanges, the risk of being cheated is minimal.
