Trading cryptocurrencies is now one of the most lucrative investments in the crypto industry. Crypto traders have their own fair share of losses and gains. But in some instances, if a crypto trader is equipped with the right trading tools and knowledgeable in technical analysis, this would definitely spell huge profit. Some have gained thousands and even millions of dollars in a single trade. But whether you are a newbie or an experienced trader, it is always important to do your own research and not just simply follow your impulse or what the majority may be doing. If this is the case, you are more likely to become easy prey to FOMO or FUD. Worse, you may be investing in a shady project without you realizing it and end up falling victim to a rugpull.
Crypto trading has different types. You have scalping, day trading, range trading, intra-day trading, swing trading, position trading, and investing. Crypto trading can be short-term or long-term depending on your goal. But before you even start counting your profit, let us discuss the basic guides on how to start trading digital assets. Be noted that these are just basic steps and do not include the technical side which could be more complex than you think. Are you ready to earn your few bucks from crypto trading? Let’s get started then.
- Register to a legit crypto exchange
You have to be extra cautious in choosing your crypto exchange since they will be acting as the custodian of your crypto assets. Better choose from leading trading platforms with proven track records and high trust ratings from their users. The number of users and trading volumes can be a very important metric that you should consider in choosing your crypto exchange. But for beginners, you should also consider a platform with a friendly user interface.
When registering, prepare your email address which you will use to register. You will also need your contact details and since most leading exchanges like Binance now require their users for KYC, be ready with your valid ID. Once verified you can now start trading your crypto.
- Fund your account
In funding your account, you need to have a bank account or other digital payments supported by the exchange. Some exchanges support fiat currencies when buying cryptocurrencies while others do not. But exchanges like Binance offers peer-to-peer transaction where users can buy stablecoins or other crypto assets through bank transfer or other digital payment.
- Choose the crypto assets you want to trade
You may choose from the leading crypto assets which include BTC (bitcoin), ETH (ethereum), BNB (Binance Coin), and XRP (Ripple). In a previous article, we compiled the top altcoins with the biggest potential for 2022. You may want to consider any of those digital assets for a start. But you will need to conduct your own research too regardless if this is your first dip or nth dip. This is always a “must”.
- Make that first trade
Do not be too excited when making your first trade. Be extra cautious. Read your candlestick. When doing spot trading, you can make small but frequent profits. Study the basics of technical analysis at least. Choose a longer time frame (1hr, 4hrs, and 1 day) to know the trend of your crypto if you want to invest in long-term. But if you want to go for those small but frequent profits, choose the short time frame with 15 minutes at least. The “buy low, sell high” strategy should be coupled with the right timing to be executed properly.
- Store your crypto properly
To do this, you need to find yourself the right crypto wallet. With security breaches plaguing the industry resulting in millions of dollar losses, choosing the right storage is very vital to protect and secure your crypto assets. You can choose from online digital wallets like Metamask. When creating online digital wallets for the first time, the platform provides a “mnemonic phrase or seed phrase” which could be 12, 18, or 24 words long. Take note to store this in a secure place since this will be the key to your crypto wallet. Don’t ever share it with anyone, otherwise, you have to say goodbye to your digital assets. You can also use the more secure “cold wallets” if you already have the means.
The proverbs “ No man is an island” can also apply to crypto traders. There’s a bulk of information in the crypto space today and you can get benefited when you are with the right people. Build a strong relationship with other traders especially if you are a newbie. You need to find yourself a mentor but at the end of the day, every trade that you will make should be based on your own discernment using your own technical analysis. Your trades will not always result in profits. Some may cause you to lose and to minimize it, you need to have a stop-loss. Keeping your daily trading journal can be very helpful too so you can record your successful and unsuccessful trades. You can replicate your successful trades and avoid those trades that have resulted in losses.
Crypto trading is just one of the many lucrative investments in the industry today. If you want to join the crypto bandwagon but you are too scared to do those trades, you may want to earn passive income through staking. In our next article, we will give you a list of the top cryptocurrencies that offer high staking returns.