As of January 2022, around 10.2% of the world’s population owns cryptocurrency. In all likelihood, this number is bound to increase as cryptocurrency increases in valuation and popularity. Like fiat currencies, crypto can be exchanged for goods and services. However, cryptocurrency’s decentralized nature ensures that they are impervious to influence and manipulation from governments and authorities. This makes owning crypto an attractive option.
Additionally, similar to the stock market, crypto offers opportunities to profit through investing and trading. While crypto trading seems appealing, it can be challenging to do it correctly. If you are keen to start crypto trading, you have landed at the right article. Let us help you get you started on the right foot.
Table of Contents
The first step in starting crypto trading is setting up a crypto wallet. Find a cryptocurrency trading platform, and open up an account. You will need to provide your personal information, such as your address and date of birth. Once you have done so, you will need to fund your account. Most crypto trading platforms accept wire payments or bank deposits via debit cards.
Doing Your Research
Crypto trading is not a get-rich-quick scheme. Similar to equity trading, crypto trading is fraught with pitfalls. To be successful at crypto trading, you need to be patient and methodical. Before you start trading, it is best to understand the ins and outs of the market. You should learn how the prices of cryptocurrencies fluctuate. With thousands of cryptocurrencies already on the market and new currencies emerging, it is vital to consider the volatility and the speculative nature of the crypto trading market to navigate it with minimal loss. Learn how to understand cryptocurrency charts and how to make decisions based on analysis rather than on pure instinct.
Picking A Strategy
When you start crypto trading, initially, it’s a good idea to try several different strategies and find out which one works best for you. Three popular strategies for crypto trading are:
1. Day Trading
Day trading entails taking positions and withdrawing on the same day. As a result, you can make faster profits and will be unaffected by overnight price shifts in the market. The frenetic nature of day trading, however, can be pretty stressful. You can also lose money just as fast as you make it, so you need to be cautious.
2. Swing Trading
Swing trading involves trying to catch market fluctuations over a short to medium time frame. Swing traders follow trends ranging anywhere from a couple of days to a couple of months. This type of trading involves less risk than day trading if you make informed, debilitated decisions. It is also less stressful, as it requires a more passive approach than day trading. Swing trading does, however, require more discipline and adherence to strategies.
3. Position Trading
Position trading is a long-term strategy whereby you buy and hold a particular cryptocurrency for long periods. It is the simplest form of crypto trading and the easiest to learn, as it is easier to predict the market’s long-term trends than its short-term ups and downs.
This should give you enough information to get your crypto trading started on the right foot. You should remember, however, that crypto trading, like any other skill, requires discipline and patience. No matter how good anyone is at crypto trading, there is a speculative nature to the ups and downs of the market. The ultimate goal is to be right more times than you are wrong. It is easy to get disheartened by a string of losses. You need to bear through them if you eventually want to make a profit. Whichever strategy you choose, you will need to tweak it so that it works best for you, and ultimately, you will learn how to be more right than wrong.