Cryptocurrencies are booming, but there is a learning curve. This guide will teach you to step by step how to trade crypto successfully with the ultimate goal of making money day trading cryptocurrencies, whether Bitcoin or altcoins.
This guide will also cover all necessary background information on what cryptocurrency is and their current financial situation which affects the valuation of each one, what you need to trade it, tools of the trade, and some risk management strategies.
If you are new to crypto trading, this guide will explain how the process works so that by the time you finish reading everything in here you understand what is going on in your exchange account and why a balance always has a higher or lower value every day depending on market prices.
You should be finished reading this guide with enough knowledge to start actively trading cryptocurrencies on BitcoinMotion, but there are some risks involved too, so make sure you understand everything well first.
Before we continue let’s just clarify that all of the following examples are for educational purposes only. Do not forget that the operative word is TRADE and NOT INVEST. There are no guarantees to make you rich since there is always the risk that all your money can be lost at any moment.
Table of Contents
Trading cryptocurrency for beginners is not that easy if you do not know what to look for. It’s like gambling, but with a lot more at stake and many experts involved in each trade. Since substantial money can be made and lost, and cryptocurrencies are traded 24 hours a day 7 days a week, it is important to be as focused as possible on your actions. And to keep updated with the latest happening we suggest checking out cryptonews.com.
The strategies described in this chapter are just examples and it is up to you to find which ones suit you best. The strategies described in this chapter are just examples and it is up to you to find which ones suit you best. Companies like VectorVest will also help you whether position trading or swing trading is better than the other. There are no golden rules for successful trading, but there are some principles that you should always take into consideration when deciding what strategy to apply:
- Avoid panic-selling or buying because of FOMO (fear of missing out)
- It is better to make a few good trades than many bad ones.
Keep this in mind at all times and let’s move on to the next chapter where we are going to show how it works when you actually do some trading.
Cryptocurrencies and Altcoins
Most cryptocurrencies tend to change names and identifier codes every now and then. Bitcoin was the first one and therefore it is usually referred to as BTC or XBT, even though there are hundreds of alternatives out there using these same identifiers. The second most important digital currency by far is Ethereum (ETH), which you can trade by using the identifier code of ETH.
Litecoin (LTC) is another alternative to Bitcoin and its identifier is LTC or XLT. There are many other alternatives too, but most exchanges only support a limited number of cryptocurrencies for trading at any one time, so you need to check if all the crypto assets you want to trade are actually available.
Bitcoin Cash (BCH) is the last of the most important digital currencies that we will cover since it was created after a split between Bitcoin and another cryptocurrency called Bitcoin Gold (BTG). It is sometimes referred to as BCH, but preferred identifiers are BTH or BCC.
Trading Strategies: What Are They?
It’s preferable if you create a solid strategic strategy to grasp a turbulent trading environment and make profitable cryptocurrency investments. To deal with probable problems and achieve a strong market position, you must first comprehend market volume volatility, trending coins, and major strategies. In this case, you need be aware of the following tactics:
Scalping is a short-term trading practice used by many professionals to make quick money. People hold the coins for a few minutes or seconds in this type of trading. However, the profit is not as large as it is with other trading systems. The goal of scalping is to make modest profits that accrue over the course of the day. When the market is extremely crowded, the best time to trade is when the possibilities of making a profit are greatest. Scalping is a strategy used by professional bitcoin traders and experts to profit from tiny price swings.
This method of cryptocurrency trading entails holding assets for the duration of a single day. Day trading is sometimes known as “intraday trading,” because it involves traders entering and exiting positions on the same day. Basic technical analysis employing technical indicators is required in this style of trading to detect current market conditions and identify trends. This method of trading yields little earnings, but it keeps you out of overnight market turbulence. The typical day trading session lasts a few hours.
People who use the swing trading approach keep their positions open for several days or weeks. This form of trading is based on short to intermediate-term trends that last anywhere from one to thirty days. This trading method can be implemented by someone who is not active on a daily basis and devotes their time to their jobs. You won’t have to worry about daily ups and downs in swing trading because you won’t be holding the coin for more than a day. Keeping up with the trend and examining the daily analysis, on the other hand, will help you make the most money.
This type of trading technique requires you to concentrate on long-term price movements. Major price shifts are taken into account by trading specialists in order to maximize profit. Because traders tend to hold positions for longer periods of time, position trading is sometimes known as “trend trading.” In addition, monitoring weekly and monthly price charts will help you assess market patterns. Traders that employ this type of trading approach are unconcerned about modest price swings. In truth, they are only interested in important market developments and will follow up on them.
This is another common trading approach that is widely used. Automated trading bots can be defined as computer programs that can sell and buy bitcoins on their own. The fundamental goal of these bots is to generate as much profit for their users as possible. These bots trade by continuously watching the market and reacting to a certain set of established rules. These bots may assess numerous market factors such as price, volume, orders, and others based on user preferences.
So, depending on your needs and availability, you can choose from a variety of cryptocurrency trading strategies.
This guide should serve as a step in the right direction in your crypto trading activities. There is a lot of information out there and it can be difficult to understand the market conditions, but the most important thing is to remember that trading comes down to risk management. So keep your losses small and let your winners run, even if they tend to be smaller than your losers.