In recent times, Trading with Cryptocurrency has become a hot commodity. Everyone is rushing to buy into the currency’s market. The recent rise of Bitcoin further underlines the fact.
If you aren’t familiar with the Cryptocurrencies concepts, It is a digital asset intended to operate as an exchange medium. The network uses a ledger in the form of a computerized database to store coin ownership records.
Before starting, know a little bit about What is Cryptocurrency?
This ledger uses strong cryptography to:
- protect transaction records.
- control and restrict the production of additional coins.
- verify the ownership of existing coins.
Usually, Cryptography does not have a physical form, unlike paper money, and a central authority isn’t typically responsible for its publishing and distribution. Cryptocurrencies usually use decentralized control, unlike the national digital currency and central banking systems.
How To Trading With Cryptocurrency?
How can you do trading with cryptocurrency, you ask?. There is various Cryptocurrency trading software that you can use for it. You can either download specific crypto apps or hire a broker to trade on your behalf to own cryptocurrency.
We can summarize the cryptocurrency trading guide in the following four steps:-
Step 1: You can use an app or get an agent depending on your preferences.
- Create an account
- Fund your account
- Purchase the cryptocurrency that you want or trade according to your desires
There are various cryptocurrency trading platforms that you can use to find brokers and start the process. The advisable place to trade cryptocurrency is on the platforms in countries they operate. However, you must look for a reliable trading platform before beginning.
Step 2: Trading With Cryptocurrency For Beginners
Before engaging in any trading activity, it’s imperative to develop an understanding of the concepts.
As Benjamin Franklin said, “An investment in knowledge pays the best interest,” you must be aware of the basics to ensure that you don’t get exploited.
Here are the top three things that you must be aware of before start trading:
- Finding what’s growing: – There are various types of cryptocurrencies. The values of these often change, and you need to be aware of the trends. Litecoin, Bitcoin, and Ethereum are the top-rated currencies for trade and convenient use. However, other options like Ripple, Zcash, Dash, etc., can also help you get a fortune. You need to evaluate the best options and keep an eye on them to see which one is the hottest.
- Incorporate volatility: – Cryptocurrencies are notably volatile. For instance, Bitcoin dropped from $3000 to $2000 and rose $5000 within 2017. Although the risk is higher, the probability of profit is higher as well. Checking the exchange volatility of the choices that you decide to go with is always a sensible option.
- Understanding blockchain: – Although you don’t have to understand the technical complexities of the concept, a fundamental understanding allows you to predict the price movements. Cryptography protects the exchanges, and then they are stored publicly. They operate as a public ledger, eliminating intermediaries like banks.
Step 3: Follow The Strategy For Trading with Cryptocurrency
Once you remember the basics of Crypto trading and familiar with the platform, devise a strategy. An efficient and effective method in line with professional money management can help you make high profits.
One excellent strategy that you can use to gain profits is Swing trading.
Step 4: Swing Trading
The strategy requires vigilance. You retain a close check on any alteration in a trend and then seize the ‘swing’ out of the tweak back into the trend.
A correction is merely when price bars or candles overlap. The trending prices often move quickly, but corrections, conversely, do not.
For instance, at a 250-minute candle on your cryptocurrency chart, you notice 25 candles with the price remaining within a point range of 100. If the price contracts to a move of just 20 points every day, you would be extremely attentive and vigilant. You would observe a lot of overlap. It shows that there is a big chance of the price remaining the same in the trend.
You can sell the currency when the first candle moves below the numerous preceding candles’ contracting range, and you could place an end at the recent minor swing high. The strategy is simple yet effective.
You can also day trade cryptocurrency. Although you can get high profits with consistency, they don’t provide certainty, and they might not work all the time.
Only the right cryptocurrency trading software and the best trading guide will help you maximize profits. Some tips to follow are.
1. Apply News
Cryptocurrencies are usually susceptible to relevant news. When news related to currency trading, such as the breakdown of cryptocurrency exchange or a government imposing a new regulation, comes forward, the price of the currency drop.
However, if a big company announces that they intend on incorporating a specific type of cryptocurrency in their business, the prices tend to climb. Keeping an eye on the news and acting fast can give you an edge over others.
2. Examining metrics
Analyzing metrics is a vital cryptocurrency tip. By analyzing the total number of wallets vs. the count of active wallets and the current trading volume, you can assign a present value to a currency. Investors can make an informed decision analyzing the market. Accurate predictions significantly increase the chances for a profit.
3. Technical Analysis
Analyzing the past price charts can help you identify the telling patterns. In the market, historical events can help you improve your prediction of the trends. You may even notice a pattern that can help you predict any future price development.
4. Trading on Margin
Margin trading is a complicated approach. Although you can collect higher potential profit if you are successful with it, conversely, the margin mechanism also increases the size of potential losses.
Margin trading would require high market prediction knowledge. If you expect a specific price change, margin trading allows you to borrow money and increase your profit. Exchanges usually have dissimilar margin obligations, and the rates differ as well.
You can take a tip that could earn you a high profit, but it can also work against you if the prediction doesn’t turn out well. Reiterating the above, if the market scares you, then hire a trading expert to trade on your behalf. Better still, register on an online trading platform, fund your account and start trading.