Trading crypto isn’t an effortless endeavour, quite the opposite, but with the proper dedication and commitment, many people are making a living out of trading cryptocurrencies.
This article is a beginner’s guide and a gateway to the professional path of trading crypto should you feel that is something you want to go for.
Read until the end, where I will share the top traders in the space to learn from.
Understanding the Basics
Cryptocurrencies, in the simplest of terms, are digital or virtual tokens that use cryptography to secure transactions and control the creation of new units.
They operate independently of a central bank and can be traded on various cryptocurrency exchanges.
There are over 8,000 cryptocurrencies in circulation, each with its unique features and use cases.
Some of the most popular cryptocurrencies include Bitcoin, Ethereum, Ripple, and Litecoin.
Based on their function and purpose, these can be classified into different categories: utility tokens, security tokens, and stablecoins.
Crypto trading involves buying and selling cryptocurrencies in the hopes of making a profit from price fluctuations.
This is done through a cryptocurrency exchange, where one can place orders to buy or sell a particular cryptocurrency. The price of cryptocurrencies is determined by supply and demand in the market.
Before making any trade, it’s crucial to understand the market conditions and the factors that influence the price of a particular cryptocurrency.
This involves analyzing market trends, monitoring news and events, and keeping up-to-date with industry developments.
By doing so, traders can make informed decisions and minimize the risk of loss.
With the right knowledge and research, you can take control of your trading journey and potentially reap the rewards of the ever-evolving crypto market.
Setting up a Trading Account
Choosing a reputable exchange
The first and most important step in crypto trading is choosing a reputable exchange.
With the rise of cryptocurrencies, the number of exchanges has skyrocketed, making it increasingly difficult to determine which one is trustworthy.
When choosing an exchange, consider factors such as security measures, fees, and available cryptocurrencies.
Do your research and read reviews from other traders before making a decision.
Setting up and KYC
Once you have chosen an exchange, the next step is to verify your identity and set up an account.
This process typically involves providing personal information and undergoing a KYC (Know Your Customer) check.
This ensures that the exchange complies with anti-money laundering regulations and protects both the trader and the business from potential fraud.
Storing your crypto
One of the key features of cryptocurrencies is that they are stored in a digital wallet. Therefore, when setting up a trading account, it’s essential to choose a wallet that is secure, user-friendly, and supports the cryptocurrencies you wish to trade.
It’s also essential to secure your wallet with a strong password and enable two-factor authentication for added security.
Fundamentals of Crypto Trading
Buy Low, Sell High Strategy
One of the most basic principles of crypto trading is to buy low and sell high.
This means purchasing cryptocurrencies at a lower price and selling them when the price has increased, thereby generating a profit.
To execute this strategy effectively, it’s essential to have a good understanding of market trends, news, and events that may influence the price of a particular cryptocurrency.
Understanding Order Types (Market, Limit, Stop)
When placing an order in the crypto market, there are several order types to choose from, including market orders, limit orders, and stop orders.
Market orders execute trades at the current market price, while limit orders allow traders to set a specific price at which they want to buy or sell.
On the other hand, stop orders are used to manage risk and are executed when a certain price threshold is reached.
Understanding these order types and using them strategically is crucial for successful crypto trading.
Importance of Having a Trading Plan
Having a trading plan is critical for success in the crypto market.
This involves setting clear goals, determining the amount of capital to be invested, and deciding which cryptocurrencies to trade.
A trading plan also includes a strategy for managing risk, such as setting stop-loss orders and a plan for tracking progress and performance.
With a clear plan, traders can make informed decisions, manage risk, and maximize their profits.
Keeping Track of Trading Activities and Performance
Tracking your trading activities and performance is an essential part of crypto trading.
This involves monitoring the prices of the cryptocurrencies you’re trading, monitoring market trends, and keeping a record of your trades and profits.
This information can help traders make informed decisions and adjust their strategy if necessary.
By keeping track of their performance, traders can identify areas for improvement and work towards their goals with greater precision.
Managing Risks in Crypto Trading
Understanding Volatility and Market Trends
Crypto trading is inherently risky due to the volatility of cryptocurrencies. Therefore, it’s essential to have a good understanding of market trends and to be able to anticipate price movements.
Diversifying Portfolio
Diversifying your portfolio is another effective way to manage risk in crypto trading.
This involves spreading your investments across different cryptocurrencies, thereby reducing the impact of any one asset on your overall portfolio.
By diversifying, traders can potentially maximize their returns while minimizing their risks.
Setting Stop-Loss and Take-Profit Orders
Setting stop-loss and take-profit orders are an ordinary technique traders use to manage risk.
Stop-loss orders are used to limit potential losses by automatically selling a cryptocurrency when it reaches a specific price.
Take-profit orders, on the other hand, are used to lock in profits by automatically selling a cryptocurrency when it reaches a certain price.
By using these orders, traders can effectively manage risk and maximize profits.
Staying Up-to-Date with News and Events
Staying up-to-date with news and events is crucial for managing risks in crypto trading.
This involves keeping an eye on developments in the crypto world, such as regulatory changes, new technologies, and significant announcements.
By staying informed, traders can anticipate potential price movements and make informed decisions.
You can also check forexfactory.com, which traders use to check if there is any red news that creates volatility in the markets.
From what I have witnessed, most traders prefer to stay out of trades on those days as it is easy to incur a significant loss on your capital.
Monitoring Trading Strategies
Finally, continuously monitoring and improving your trading strategies is key to enhancing your trading skills.
This involves regularly reviewing your performance, identifying areas for improvement, and adjusting your strategies as needed.
Whether through trial and error or by incorporating new techniques, continuously monitoring and improving your strategies can help you reach your full potential as a trader.
Enhancing Trading Skills
Learning from Market Experts and Traders
One of the best ways to enhance your trading skills is to learn from market experts and experienced traders.
This can be done through reading books and articles, watching videos and webinars, or participating in online courses and training programs.
By learning from the best, you can gain valuable insights and knowledge to help you make informed trading decisions and improve your performance.
Participating in Trading Communities and Forums
Participating in trading communities and forums is another great way to enhance your trading skills.
By engaging with other traders and market experts, you can exchange ideas, learn from other’s experiences, and stay informed about the latest developments in the crypto world.
Whether it’s through online discussion boards or in-person events, participating in these communities can help you grow as a trader and reach your full potential.
Staying informed about new tools and resources is essential for enhancing your trading skills.
This involves keeping up with the latest technologies and platforms and staying informed about new trading strategies and techniques.
By staying informed, you can improve your performance and gain a competitive edge in the crypto market.
Best forex and crypto traders to learn from
I have spent countless hours watching the pro traders and bought their courses to see their real value.
Of course, this is my personal opinion and not financial advice either, and please do your own research.
Here is my best pick:
I will start with Trading Channel as he has the most beginner videos with basics that are key for anyone at the beginning of the trading journey, and it applies to all the markets; stocks, forex, and crypto.
Second will be Anton, and I would move to the mentfx methodology whenever I feel that I have a good understanding of the basics of trading as he dives more profound into the understanding of institutional trading and the Wycoff method.
Cam has been trading stocks for 17 years and then moved into crypto when he realized how much money can be made with cryptocurrencies.
He mainly trades crypto and is quite transparent and shows his wins and losses, which many traders don’t do.
I have tried his signal telegram group, where he shares all his moves and its around $40+ a month. Worth the money as its no just him sharing the knowledge there but also many other experienced traders
Another crypto trader that has his course is Jason.
He is famous for his chicken drinking water method and market cipher indicator on trading view, and he also shares his profit and losses daily.
Final Thoughts
According to many successful stocks, forex and crypto traders, it takes, on average, between 6 months and two years to become a profitable trader. Moreover, statistics say that 95% of retail traders lose money trading.
I must stress that trading carries a lot of risks, so please do your due diligence before taking any money out of your pocket.
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