Every newbie trader would like to know how to start trading cryptocurrency and what are the principles of trading. Let’s first figure out what a cryptocurrency exchange is. This is a platform for trading and exchanging some digital currencies for others (bitcoins, altcoins, and stablecoins) or various world fiat currencies (rubles, dollars, euros, etc.).
Mining is the original way to create cryptocurrencies. Hence, exchanges are the only option to obtain them. Nowadays it’s even worth it to take instant cash loans at Directloantransfer and spend them all on some cryptocurrency so that in a month or even a week you could return your loan and continue building up your crypto portfolio. Please note that only with the help of exchanges digital assets can be exchanged for real money.
The division of the entire list of exchanges can be conditionally carried out according to one of the most important criteria:
- Exchanges on which bitcoin, altcoins, and part of the forks can be exchanged for fiat money (rubles, dollars, euros);
- Exchanges that trade exclusively between BTC and altcoins i.e. exchange of some cryptocurrencies for others.
Altcoins are all kinds of cryptocurrencies other than bitcoin. Forks are digital tokens derived from the main Bitcoin blockchain. Many forks can only be traded on certain exchanges.
Steps On How To Start Cryptocurrency Trading
Decide Which Trading Platform Is Right For You
Take the cryptocurrency trading assistant eToro. This trading platform is considered one of the best online cryptocurrency trading brokers due to its social trading function, low trading costs, and interactive platform. You can trade a wide selection of cryptocurrencies in the form of CFDs for international traders and actual tokens for US traders.
Signing up for eToro is pretty easy. Its copy-copy function, as well as its easy-to-use trading platform, have also made it attractive to most newbies. On the other hand, a free wallet and sophisticated trading resources such as advanced trading analysis tools and indicators help attract professional crypto traders. There is no deposit fee. Trading costs and rollover fees are very competitive but you will have to part with the $5 withdrawal fee.
- Minimum deposit: $50;
- Advanced trading analysis and market research tools;
- The cryptocurrency trading platform is great for beginners who want to make good money.
- The account opening process is clear and simple;
- Traders benefit from commission-free trades and competitive trading fees;
- eToro is a highly regulated international online Crypto trader.
- A minimum initial deposit of $200 can seem high;
- You will be charged a commission of 20% of the profits generated from the copied trades.
Find Out How Cryptocurrency Trading Works
Professional traders advise beginners to start by learning as much useful information as possible regarding cryptocurrency trading.
Like any beginner, it would be nice to know what a cryptocurrency is and what obvious factors affect its price.
It is necessary to study what cryptocurrency trading platforms exist and what impact they have on profitability in general. And finally, to find out what challenges and promises are shaking the crypto industry, and how they affect your profitability. Write down these necessary points and gradually try to delve into the essence of each of them.
Understanding the basic aspects of crypto trading newbie traders maximize their chances of joining the consistently profitable 10%. A step-by-step manual will guide you through creating a trader account and making your first trade.
When you have chosen which type of trading suit you most and have already familiarized yourself with the various factors concerning the crypto industry, then the first step to crypto trading is determining how the crypto market is analyzed.
Technical Analysis Type
It relates to prognosticating the price movement regarding a particular altcoin based on its past execution. This is called a “chart”. Consequently, certain analysis types included will consider the price chart details:
This is a generally accepted technical analysis tool. It is possible for Simple Moving Averages (SMA) and Exponential Moving Averages (EMA) as well. SMA includes summing up the cost of a cryptocurrency within a certain time to learn its average price. EMA includes equalizing the cost of a cryptocurrency over a given period favoring up-to-date cryptocurrency performance data.
Support and Resistance
Support refers to the cheapest level of price while the cost of a cryptocurrency declines to pass by. Resistance belongs to the most expensive level when the price of the coin has failed to rise. They indicate the minimum and maximum ranges of pricing that traders are ready to sell.
This analysis is a comprehensive pricing tool that is used to manage the price movement of a cryptocurrency along with its investment potential. The fundamental analysis type explores and determines the cost of entering or exiting a trade.
Aspects of fundamental analysis are as follows:
It examines the overall evaluation of the financial markets concerning a particular coin. A trader can try such sentiment analysis tools like Sentiment Analyzer and Hootsuite Insights.
It is important to consider important news and events regarding crypto changes. It ranges from partnerships with system upgrades to early detection along with bug fixes that drive up the price to serious hacks, key partners loss, and cryptocurrency developers. These aspects negatively affect the coin price.
Understanding the various forces influencing the supply of a cryptocurrency passes as the basic fundamental analysis aspect. Many traders are preoccupied with trading market sentiment. That is why they track news concerning various factors that influence the supply of the coin.