Investing your money to trade cryptocurrency is a decision worth making in current era.
The crypto world is changing the way we see things. It is a transformation from centralizations to decentralization. Financial advisers believe that it is time to invest in cryptocurrency. It is the money of the future.
Cryptocurrency has enormous potential. The blockchain revolution is disrupting all industries and especially financial ones. You can quote it, disagree with it, glorify or vilify it but one thing you cannot do is ignore. Cryptocurrency is here to stay and it is changing things by pushing the technological revolution forward.
If you are interested in cryptocurrency trading then this guide is for you. We will walk you through the process of how to trade crypto. So let’s get started with the name first.
What is Cryptocurrency:
In order to trade crypto, you first need to know what is cryptocurrency. As the name suggests, cryptocurrency involves money and cryptography. Cryptography is a technique used in computer communication. It makes the communication secure and encrypted thus no unauthorized party can alter it.
Cryptocurrencies are digital assets that do not exist in physical form. It is a medium of exchange over the internet. The ownership of coin is recorded on an open, distributed ledger.
Bitcoin was the first-ever cryptocurrency. A person with the nickname ‘Satoshi Nakamoto’ published a whitepaper on bitcoin back in 2018. Ever since the number of cryptocurrencies and their prices have quadrupled. Nevertheless, many individuals have become millionaires by profiting off crypto’s price volatility. Let’s talk about how you can trade crypto.
How to Trade Cryptocurrency:
Trading Cryptocurrency is tricky to start with. Nonetheless, when you start right the rest of the process becomes easy and smooth. One important thing to mention here is that the crypto industry is still in its infancy. That’s why scammers and hackers love it. There have been numerous scamming incidents where criminals disguised in crypto exchange stole digital assets from a multitude of individuals. Therefore, you should be very careful about whom to trust.
First of all, you need to buy the cryptocurrency in order to trade it. For this, you can go to any of the exchanges like Binance, Coinbase, or Kraken. Sign up on the exchange and pay for crypto with given payment options. Binance gives users the option to buy bitcoin and other currencies through debit card, credit card, or bank account. Crypto will be transferred to your wallet (which you can get from bitcoin.com).
Now that you have crypto in your wallet, you can simply trade it on exchanges. There are two common strategies for trade:
This is a common strategy. You buy an asset at a low price and then sell it when the price is higher. Thus, profit is made from the price difference. However, you have to choose the currency that is likely to increase in price. Some coins rise exponentially while others can decline sharply. Hence, pick wisely for going long.
Also Read: Best Cryptocurrencies to Invest in 2020
Going Short means selling cryptocurrency when you expect a price fall. Subsequently, you can buy it back at a low price. Thus the asset remains in your possession and you earn from a change in price.
Trade with Signals:
Signals and technical indicators are the Bible of the crypto trading business. There are buy/sell signals, trading indicators like Bollinger bands, Moving Averages, etc. The more accurately you use these tools the better you will be able to trade cryptocurrency with profits. Therefore, start learning crypto charts yourselves. There are numerous resources from where you can learn to do so.
Also Read: Best Indicators for Cryptocurrency Trading
Autotrading strategies is offering a free course to people who are interested in crypto trading. The course will walk you through every step of the journey towards becoming a successful trader. The attendees will learn about the best exchange, best cryptocurrencies, and best strategies for crypto trading. Additionally, the instructor will also teach about signals reading techniques. So, if you are interested then sign up on this page.
The behavior of the market can guide your investment as well. So let’s talk bout factors that cause market movements.
The cryptocurrency market is notorious for being volatile. The prices fluctuate rapidly and are hard to predict. However, there are certain factors that lead to price movement in the crypto market.
Many governments feel threatened by cryptocurrencies due to the money’s open nature. As a result, countries bring regulations to control the bitcoin and altcoin distribution. These regulations can heavily impact the price movement. For instance, the United States gave approval of crypto custody to federally chartered banks. This increased investment in Cryptocurrencies as people were reassured that crypto has a future in the economy.
Forks are changes in coin protocols also known as halving events. This essentially means that following the fork, miners get half of the coins that they previously got. For instance, the third bitcoin fork happened on 12th May 2020. After that, the reward for miners diminished from 12.5 BTC to 6.25 BTC. The crypto market experts also observed that the bitcoin market has been less volatile since the halving event.
Innovation in Technology:
We are living in a technological era and nothing can be more technical than cryptocurrencies. Therefore, any innovation or up-gradation of technology leaves an impact on crypto prices.
In all sorts of economies, sentiments can make or break a trend. Hence market sentiments play a huge role in predicting which cryptocurrency gets more investments. The best example is the 2017 bitcoin bull rally. It took BTC to $20K in December 2017 because bitcoin was all over the place and people saw it as the money of the present. However, this belief eroded in 2018 pulling the price below $10K.
Trade crypto to have financial freedom. It is a side hustle and source of passive income. Learning to trade is difficult at the start but not impossible. It doesn’t involve complex math or anything. You just need to have the drive to learn. So the concluding advice is, search for resources to learn, keep studying how markets work, and don’t get scammed. You can follow our blog for learning material, news, and analysis.