Just like in Forex trading, where fiat currencies trade against one another, in the crypto world, cryptocurrencies trade against one another. So, anyone who is keen to know more about the best ways to trade crypto coins should ideally have some basic knowledge of trading. With crypto trading getting increased mainstream attention, more and more players are entering the crypto space in the hope of getting a large share of the Bitcoin pie. So, what is the best way to start trading cryptocurrency?
- When you have money that you wish to invest in cryptocurrencies, you have to find the best ways to buy and sell crypto coins. You therefore need portals to connect you to other traders and investors, and these portals are called cryptocurrency exchanges. Since there are many exchanges out there you must make a choice based on factors like reputation, exchange fees, validity, and security. You must ideally choose one that demands ID verification from users.
- When you have selected an exchange to begin trading, you must then create an account by submitting your private details. You will be required to give your password, username, and mention your preferred payment method. You also have to submit paperwork for ID verification in leading exchanges like Coinbase as they conform to KYC regulations. To protect the crypto coins you buy you must have a digital wallet. The wallet will store the private and public keys for storing and transferring crypto coins. You must never disclose your private key to strangers; it will give them access to your funds.
- To start trading, you should ideally learn reading trade charts and graphs, like the Relative Strength Index calculations and Japanese candlestick charts. The truth is that those having prior trading knowledge will enjoy an edge over others. No matter how experienced you may be, you are going to need a trading strategy. The more popular trading strategies are hedging, hodling, swing trading, trend trading, breakout strategy, etc. While swing trading will open large trade positions, day trades will focus on small trades during the day. The former is a safer option for beginners because day-trading is like a full time profession that requires you to stay glued to the computer screen for hours on end. Day traders are likely to make faster profits compared to swing traders. But the risks are manifold and you should see which suits you best before you choose any strategy.
- Just like you must decide on a trade strategy, you also have to learn fundamental and technical analysis. Technical analysis focuses on using charts and indicators that tell you which the best times are for buying and selling a crypto asset. Fundamental analysis will help you forecast market movements by staying informed with the news.
- For people who wish to learn the best ways to trade there are many trading platforms that offer tools that can help them do this. Copy trading is also a great way to learn the ropes because you can copy actions of successful traders to make successful trades. Using a demo account may not be a wise thing to do as it can give you false expectations. In the real world it is hard to fulfill orders perfectly and if you are provided with a lot of fake money to experiment with, you do not face real risks. Finally, many traders use crypto trading bots for better trade outcomes; these bots can execute trades automatically on your behalf.