Beginners Guide to Crypto Trading in 2022
Introduction
Recently, more and more people are beginning to believe in the efficacy of cryptocurrencies. As a result, future analyses by seasoned economists prove that cryptocurrency has come to stay.
While crypto trading continues to expand and gain more awareness, it appears as though only big businesses and corporations can leverage the market for digital currency.
So one has to ask — is it possible to trade cryptocurrency as an individual? How can a beginner learn crypto trading?
Well, not to worry! This beginners guide will detail everything you need to succeed with trading cryptocurrencies, crypto brokers, etc. So keep reading to learn more!
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What is Crypto Trading?
Crypto trading is a short form of referring to trading cryptocurrencies. Essentially, it is buying and selling cryptocurrency through crypto trading platforms in hopes of profiting from price differences over some time.
Trading crypto doesn’t always involve owning the currency pairs since you can equally speculate a currency price. CFD, otherwise known as a contract for difference, makes trading without owning the tradable assets possible. In essence, CFD trading is a derivatives trading system where you bet on specific cryptocurrency price changes without owning them.
Crypto Trading Vs Crypto Investment: How to know the difference
Several people, especially newbies, misunderstand the relationship between crypto trading and investment. While trading deals with short-term market fluctuations, investment deas with long-term price fluctuations.
For instance, if you want to invest in a particular cryptocurrency, you only have to purchase some quantity and hold on to it for a long time. You can also decide to keep accumulating one specific cryptocurrency until the price drastically changes, then selling off your assets will yield much profit. However, if you deice to trade, you only need to fund your crypto wallet and trade through crypto platforms or crypto brokers.
For instance, you can buy bitcoin or ethereum, use them to fund your trading wallet and continue buying or selling according to the slightest price changes for smaller or shorter profits.
Cryptocurrencies: How the market works
The cryptocurrency market is regarded as decentralized because the government does not fundamentally regulate it. For example, economic and political events or occurrences do not heavily impact the market. Instead, it exists as a set of shared currencies online that people can claim and lose at any given time.
There is free entry and exit from the market, causing trading crypto to be a highly volatile endeavour.
Factors influencing the crypto trading industry
Regardless of its volatility, the cryptocurrency market is still subject to the forces of demand and supply.
Here are more examples of factors that also influence and move the crypto market:
- Cryptocurrency supply and rate of supply
- Value of all existing coins or market capitalization
- News and Media representation of crypto trading
- Cryptocurrency, integrating with other existing economic infrastructure like e-commerce and digital marketing.
What are crypto brokers?
Crypto brokers are financial intermediaries between you and the crypto market. Essentially, they provide a secure platform for you to engage in crypto trading and charge a fee or commission for their services.
Also, they bring several traders together because of the decentralized nature of the market and help you fund your wallets. eToro, for instance, is one of the leading crypto brokers with beginner-support benefits. Here are some significant benefits of crypto brokers:
- They support beginners: Sometimes, beginner traders find it difficult to fund their accounts. Your crypto broker will help you with your wallet funding. For instance, you can buy bitcoin or buy Ethereum through your crypto broker.
- Crypto brokers offer a wide range of services, including holding your currencies in trust through wallets.
- They help you execute small orders or buy and sell cryptocurrencies.
The right information about crypto trading saves you from encountering major loses.
Need further information about crypto brokers?
How To Trade Cryptocurrency ?
It is crucial to follow the proper steps to enjoy a successful crypto trading journey. At Topbrokerstrade, we offer you a step-by-step approach to crypto trading, especially for a beginner. Here is how we propose you begin your crypto trading:
Decide on your Crypto trading method.
You can own the digital currency by buying some quantity to trade through an exchange, or you can trade price speculations and changes through CFDs without owning the cryptocurrency. Here is how both methods work!
Sign up and buy cryptocurrency through an exchange
If you choose to buy crypto through an exchange, it means you prefer to own a part of the digital currency. In this case, you can buy any cryptocurrency of your choice and hold onto it in a digital wallet, waiting for the value to increase so that you can see it and make a profit.
You will need a crypto broker to sign up for a crypto exchange account. There are several good brokers out there, but we have reviewed the best crypto brokers for 2022 to get you started.
This way, you can familiarize yourself with their features, costs, pros and cons before signing up. Our top crypto brokers offer a user-friendly interface that’s beginner-friendly and easy to use. The sites and platforms are pretty self-explanatory.
What’s more, crypto brokers like eToro and AvaTrade provide educational resources for you to level up your knowledge of crypto trading. This way, you wouldn’t be at sea and feel like you’re constantly being told what to do!
While you’re signing up, it is essential to note that you should provide all relevant information to help you secure your account.
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Engage in crypto trading through CFDs
If you would instead not buy and own cryptocurrency, CFDs provide an alternative means for you to trade cryptocurrencies. With CFDs, you only exchange the difference in the price of cryptocurrencies over a specific period.
Usually, your exchange difference begins from the time you first opened your position to when you close it. You can either open a long or short duration for your market price speculation. If you keep a long position open within which the value of the cryptocurrency appreciates, you’ll walk away with a profit.
However, if the cryptocurrency value drops within your open position, you will make some losses. You should note that this system applies to both long-term and short-term CFD positions!
Fund your account
Funding your account is the next step after deciding on your trading method. You are not obligated to fund your account until you are ready to trade. This way, you can put yourself in a better headspace to cope with the market volatility of the cryptocurrency market.
While volatility makes the market attractive, it also makes it risky. Several exchanges or crypto brokers offer different methods for funding your account. You can use your debit cards or make a direct wire transfer. Also, some crypto brokers offer free account funding services.
Choose a cryptocurrency and invest.
Most cryptocurrency traders buy bitcoin while others buy ether/ethereum. However, it doesn’t mean that bitcoin and ethereum are the only cryptocurrencies available in the market. They only stand out because they are more predictable for traders than other smaller coins.
But recently, the altcoins have experienced a 1000% increase within one month—A hopeful trading option according to popular trading opinion!
Establish a trading plan and strategy
Your trading plan and strategy should have good risk management options to shield you from market volatility. Interestingly, your plan and strategy is a test of the strength of your knowledge about crypto trading.
As a beginner trader, you need to purchase or take a series of crypto trading courses before trading. The reason is that the more informed you are about the market and its nuances, the better decisions you will make. Also, adequate learning will help you decide whether fundamental or technical methods are the best trading analysis and indicators.
Store your digital currency
Suppose you intend to trade actively; you need to store your digital currency, whether in bitcoin trading or ether trading. Digital Software or hardware wallets are excellent choices for strong up your cryptocurrencies. However, there is more security associated with keeping on hardware wallets.
Final Thoughts
As you already know, crypto is the future, and we may never achieve market stability in cryptocurrency. As a result, you need every ounce of information to help you successfully navigate the world of cryptocurrency, especially if you are a beginner. It’s essential to refrain from getting emotional and carried away by the profit potential in crypto trading and focus on learning more if you want to be a successful trader. Hopefully, this article gives you a head start by breaking down some of the complex concepts of crypto trading.
Although the cryptocurrency market is pretty volatile, with the right crypto broker, you can make it a worthwhile adventure.
If you’re a pretty experienced crypto trader, IQ Options can prove to be an effective tool for you!
Although the cryptocurrency market is pretty volatile, with the right crypto broker, you can make it a worthwhile adventure.
If you’re a pretty experienced crypto trader, IQ Options can prove to be an effective tool for you!
