What Is Crypto Trading?

crypto trading

Author: Christine Hansen

Christine Hansen, PhD is a Fortune 500 consultant, the Founder of Paragon Capital LLC., a major supporter of the finance decentralization, a nonprofit leader, and a social scientist who has been studying the Blockchain Community since 2014 @BitcoinCensus.

Christine Hansen

Cryptocurrency trading means taking a fiscal position on the price direction of individual cryptocurrencies against the dollar (in crypto/ dollar duos) or against another crypto, via crypto-to-crypto duos. Cryptocurrency trading involves buying and vending cryptocurrencies for profit. However, cryptocurrencies have their own digital currency exchange where people can engage in trading coin, if conventional currencies have a foreign exchange(forex). Unlike the customary stock exchange that closes at the end of the day, cryptocurrency trading is a 24- hour market.

Learn Crypto Trading

The first step in cryptocurrency trading is to find a suitable cryptocurrency trading platform and create an account. Different cryptocurrency traders have different needs and goals when it comes to trading. Fortunately, there are a variety of trading platforms to choose from on the internet. There are various factors to consider before choosing a platform such as security, ease of use, number of assets supported and many others.

After selecting a reliable platform, the next step is to create an account. Most platforms will provide you with a registration form to complete. You will need to enter a valid email address, choose a strong password and then click register. You will then be required to verify your account: an email will be sent to your address with a code that you use to verify your account.

After successful verification, the next step is to deposit your initial capital and begin your cryptocurrency trading journey. There are several methods of depositing funds such as credit/debit cards, Skrill, bank transfer, etc.

Trading cryptocurrencies might sound simple. However, there are many factors that determine whether you will be successful or not. Cryptocurrency trading is not a get-rich-quick scheme, but a wealth building and income generating method that requires discipline, patience and skills. Here are some tips to help you become a good cryptocurrency trader:

Do your research

The crypto market is a vast market with different protocols of trade. Therefore, it would be best if you understood the market from your point of view. Your research should include the crypto exchanges, cryptocurrencies, and platforms for trade. Be wise to check the pros and cons of investing in such a diverse market. Once you are convinced with the information gathered, you can progress to trading.

Practice different trading strategies

The crypto market is volatile, and it changes daily. So there is no better way to understand the market than to start trading the same assets. Dummy accounts help with the practice of how the actual market operates. There are multiple dummy accounts online for different coins. Pick the tab that best serves your interest.

Pick a cryptocurrency and start trading.

There are about 7,000 cryptocurrencies in circulation in the current market. Pick a crypto currency based on the criteria of performance and its longevity in the market. You want to trade a currency that will offer you reasonable returns in the long run. As a beginner, avoid trading initial coin offerings (ICOs) because you do not know their success rate or how legitimate they are.

Diversify your investments | Learn crypto trading

As the saying goes, "do not put all your eggs in one basket" and this rule applies in digital assets as well as stocks. Investing in digital assets can be lucrative but, likewise, the possibility of total loss come in equal measure. Diversifying across several altcoins helps you to cut your losses in case one cryptocurrency drops in price.

Don’t put all your life savings into trading

Like any other financial asset, cryptocurrencies can either be profitable or you can lose money. The crypto market is risky and, as an investor, it would be wise to only invest sums of money you can afford to lose. The current market crash was not predictable, yet it happened. There have been other crashes before, and likely more will occur in the future. There is never a 100% guarantee that you will get back your money's worth even if you do everything according to the book.

There are internal and external prospects that lead to losses in investment. They include government interferences, hard economic times, malware attempts, and hacks. In addition, the market is volatile and easily susceptible to control. So please make sure not to invest all your savings and your retirement plan.

Avoid fear of missing out (FOMO) | Learn crypto trading

Trading cryptocurrency has become a global phenomenon in recent times. Almost everyone is trading, and there is a human tendency to do what everyone else is doing. There is a version of trading in crypto known as day trading which is more like the stock market in traditional finance. If you decide to participate in day trading, watch out for fear of missing out, also known as FOMO, as it is the fastest way to lose money. You should also avoid trading when you feel pressured.

Keep yourself up to date with cryptocurrencies | Learn crypto trading

The cryptocurrency market is evolving daily, and with it comes new aspects of the trade. To do well in investments, you should stay up to date on what is going on. Social media platforms such as Twitter, Facebook and Telegram, as well as cable news, are excellent channels to get reliable news. As the market changes, adjust your investments accordingly to ensure profits.

Learn trading methods and staking

There are two trading analysis methods used in the crypto market. They include fundamental analysis and technical analysis. Technical analysis shows the entire price history of a security, for example bitcoin, while fundamental analysis revolves around the current affairs that affect the price of a security such as news events. A combination of both methods works best to maximize profits. You can always start staking your crypto and earn passive income. This is one of the easiest methods to gain from crypto in the long term.

Mistakes do happen | Learn crypto trading

Cryptocurrency trading is not a get-rich-quick scheme. It takes discipline, practice and skills to succeed in trading. However, even professional traders at times do make mistakes while trading and realize losses. Cryptocurrencies are volatile and risky and trading might result in the loss of capital. As such, learning skills such as risk management and trading discipline. And don’t lose hope when you, when mistakes happen. Learn from the mistakes.

The basics for learning cryptocurrency trading

In crypto trading, it's thus a question of assuming on the progression of the value of the course of crypto currencies thanks to varied indicators, tools and ways, to have a max of elements and enough information to make conclusions.

Technical Analysis vs Fundamental Analysis | Learn crypto trading

Technical Analysis Fundamental Analysis
Technical analysis is mostly based on graphs tracing the movements and exact variations of volumes and prices over time. We could relate this practice to the analysis of statistics since it's a question of interpreting complex and multiple data, making it possible to make predictions in an uncertain future. Fundamental analysis on the other hand, consists of embracing a more global approach to markets in general by studying the external factors and elements that affect the price of cryptocurrencies. It takes into account a number of further personalized and abstract information.

Crypto Trading Strategies | Learn crypto trading

Day Trading This trading strategy involves taking positions and quitting on the same day. The goal of a merchant while taking on such a trade is to reserve gains amid intraday price movements in a cryptocurrency of his choice. Crypto day trading is a short- term trading strategy based on the purchase and transaction of crypto assets on the same day. Day trading crypto is a high- risk adventure made possible by the distinct volatility and liquidity in the cryptocurrency requests.
Scalping This trading strategy involves using increased trading volumes to reserve profit. Although there's danger involved, a smart merchant takes care of the amount necessity and other important rules to avoid bad trading adventures.
Swing Trading Swing Trading is a type of short-term investment strategy where gains are earned by keeping positions open for a period ranging from overnight to a limited week.
Swing Trading Swing Trading is a type of short-term investment strategy where gains are earned by keeping positions open for a period ranging from overnight to a limited week.

Crypto trading chart

offers a graphical representation of price changes, adding up all buy and sell deals over a given trading period, from 15 minutes, to a day, a week, or a month. It can help break down price shifts, manage danger and identify patterns, depicting changes in supply and demand.

Cryptocurrency Trading Platform

A cryptocurrency trading platform is a platform that facilitates buying and selling of cryptocurrencies, it allows users to trade crypto for crypto or crypto for edict currency and vice versa.

These exchanges reflect the current request price of each cryptocurrency that’s available in their platform for their users to buy vend.

Crypto FAQs

What are cryptocurrencies?

A cryptocurrency is a form of currency that exists solely in digital form. Cryptocurrency can be used to pay for purchases online without going through an intermediary, such as a bank, or it can be held as an investment.

How does trading cryptocurrencies differ from trading stocks?

While investing in cryptocurrencies you should know, they differ a great deal from traditional investments, like stocks. When you buy stock, you are buying a share of ownership of a company, which means you’re entitled to do things like a vote on the direction of the company. If that company goes bankrupt, you also may receive some compensation once its creditors have been paid from its liquidated assets.

Buying cryptocurrency doesn’t grant you ownership over anything except the token itself; it’s more like exchanging one form of currency for another. If the crypto loses its value, you won’t receive anything after the fact.

There are several other key differences to keep in mind:

  • Trading hours: Stocks are only traded during stock exchange hours, typically 9:30 am to 4:30 pm ET, Monday through Friday. Cryptocurrency markets never close, so you can trade 24 hours a day, seven days a week.
  • Regulation: Stocks are regulated financial products, meaning a governing body verifies their credentials and their finances are matters of public record. By contrast, cryptocurrencies are not regulated investment vehicles, so you may not be aware of the inner dynamics of your crypto or the developers working on it.
  • Volatility: Both stocks and cryptocurrency involve risk; the money you invest can lose value. However, stocks are directly linked to companies and generally rise and fall based on those companies’ performance. Cryptocurrency prices are more speculative—no one is quite sure of their value yet. That makes them much more volatile and affected by something as small as a celebrity’s tweet.

Do you have to pay taxes on cryptocurrency?

If you buy and sell coins, it’s important to pay attention to cryptocurrency tax rules. Cryptocurrency is treated as a capital asset, like stocks, rather than cash. That means if you sell cryptocurrency at a profit, you’ll have to pay capital gains taxes. This is the case even if you use your crypto to pay for a purchase. If you receive a greater value for it than you paid, you’ll owe taxes on the difference.

Are there cryptocurrency exchange-traded funds (ETFs)?

Given the thousands of cryptocurrencies in existence (and the high volatility associated with most of them), it’s understandable you might want to take a diversified approach to investing in crypto to minimize the risk you lose money.

Multiple companies have proposed crypto ETFs, including Fidelity, but regulatory hurdles have slowed the launch of any consumer products. As of June 2021, there are no ETFs available to average investors on the market.

How do you buy crypto?

You can buy cryptocurrencies through crypto exchanges, such as Coinbase, Kraken or Gemini. In addition, some brokerages, such as WeBull and Robinhood, also allow consumers to buy cryptocurrencies.

Why are there so many cryptocurrencies?

Cryptocurrency is an emerging area with more than 19,000 crypto projects in existence, with very few barriers to entry. 2019-2021, witnessed a crypto market boom, with thousands of new crypto projects added.

While some crypto function as currencies, others are used to develop infrastructure. For instance, in the case of Ethereum or Solana, developers are building other cryptos on top of these platform currencies, and that creates even more possibilities (and cryptos).

What are altcoins?

When we first think of crypto, we usually think of Bitcoin first. That’s because Bitcoin represents more than 45% of the total cryptocurrency market. So when we talk about any cryptos outside of Bitcoin, all of those cryptos are considered altcoins.

Ethereum, for instance, is regarded as the most popular altcoin.

Why is stabila valuable?

Part of what makes Stabila so valuable is its scarcity. Stabila’s maximum supply is limited to 30 million coins. Currently, there are 22 million coins in circulation.

To create supply, Stabila rewards crypto miners with a set STB amount. To keep the process in check, the rewards given for mining Stabila are cut in half almost every two years.

What Is STB?

Stabila (Abbreviation: STB) is a decentralized digital currency that can be transferred on the peer-to-peer stabila network. Stabila transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain. The currency began use in 2021, when its POS smart contract blockchain implementation was released as open-source software.

Why are cryptocurrencies important?

Cryptocurrencies are rising in importance and not going away anytime soon.  While the initial premise of cryptocurrency was to fix the problems with traditional currencies, there are now a whole host of utility cryptocurrencies that have sprung up, thanks to the creation of the blockchain.

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