Cryptocurrency is gradually becoming the focus of the entire financial world, and crypto trading is now one of the most successful fields. Crypto trading can be very lucrative — much more so than investing, mining and other forms of income from crypto assets.
The number of cryptocurrencies and tokens in existence has long surpassed a thousand. With every new ICO, another token emerges. Altcoin exchanges are also present in the cryptocurrency market in huge numbers. There are many ways to do trading, including crypto lending. All this makes cryptocurrency trading a potentially lucrative but equally dangerous activity.
To avoid this, you need to learn how the cryptocurrency market works and what factors act as price drivers. In this article, you will learn how to learn crypto trading so that trading is profitable.
How to start trading cryptocurrency successfully
Cryptocurrency trading for beginners is essentially not much different from trading other types of assets. And if you already have such other experiences, your knowledge is sure to be useful and you won’t start from scratch. The only difference is the high volatility of crypto.
A crypto trader can focus on only one coin, like bitcoin, and therefore trade one pair — BTCUSD (or BTCEUR). Or he can focus on several coins and trade pairs like Bitcoin, Ethereum and Ripple (XRP) paired with the US dollar or euro.
Crypto trading strategies
The defining feature of the cryptocurrency market is its daily volatility. This is where swing trading or scalping crypto daily trading strategy can be especially effective.
This strategy for making money on cryptocurrency is well suited for unstable markets. The key to scalping success is to enter trading positions on swings up and down.
Automating the trading process can make this easier, as trade execution will be much faster.
The use of crypto-bots and signals can also be useful in the implementation of this strategy. In addition to all of this, various trading terminals such as Cscap or TigerTrade are also popular.
Trade by trend
This is a trading strategy of the crypto trading for beginners, which has been used for a long time and is especially useful in cryptocurrency trading. Arbitrage trading aims to profit from price discrepancies that exist in cryptocurrency.
For example, you can usually buy Bitcoin on a large number of crypto exchanges such as Bybit and Binance.
Sometimes the price of cryptocurrency on these exchanges can vary greatly. As a result, Bitcoin can be traded on different exchanges for a few hundred dollars more.
With arbitrage trading, you can buy a cryptocurrency that trades at a lower price on, say, Binance. And then sell it at a higher price on, say, Bybit, where the trading price may be slightly higher.
Crypto day trading
Crypto day trading involves entering and exiting positions in a single day. The profits are based on the fluctuations in the value of the digital currency. The only difference between day traders and scalpers is longer timeframes.
It is a fairly time consuming and risky strategy, and you need to gain experience before you can use it.
This strategy goes back decades and has its origins in traditional markets (stocks, bonds, etc.). Fundamental analysis is great for traders who prefer a long-term view of their assets.
If you can find an asset undervalued by the market, you can make serious profits on any price appreciation when the market realizes its true value.
Determining the intrinsic value of a cryptocurrency may not be easy, but assessing the quality of a cryptocurrency’s development team and value proposition are good starting points.
These metrics differ from those used in traditional markets. For example, metrics such as price to earnings per share are not useful because we are dealing with digital assets, not companies.
What are the benefits of crypto loans in trading
Cryptocurrency lending is an opportunity to borrow cryptocurrency against collateral. To borrow, you need to choose a secure platform and request the right amount of cryptocurrency.
A crypto loan can be beneficial, for example, when you want to buy cryptocurrency at a low price and also don’t want to spend your own tokens, because you are awaiting its possible growth. For example, if you have bitcoins and you don’t want to sell them, then you can take a bitcoin loan. Use your bitcoin as collateral, receive any stablecoins as loaned funds and invest them in trading.
Once the loan is repaid, the collateral are returned to the borrower. However, it is important to understand that there are risks when using crypto loans, as volatility cannot be ruled out.
There is also the risk of losing money by choosing an unscrupulous borrowing platform. Check the reviews of the crypto loading platforms before choosing one. One of the best crypto loans you can obtain is the loan from crypto lending platform Coin Rabbit.
As you can see, crypto trading is a successful line of trading and with the right actions it will bring you a profit. It’s important to understand that success in crypto trading is not achieved quickly. Don’t be afraid of mistakes and don’t get discouraged, because going through mistakes is the way to learn the skill of crypto trading in practice. The main thing is to operate with a small amount of money at the beginning, which will not harm your budget.