Cryptocurrency is a matter of dispute nowadays, it is claimed to be the currency of the future and is demonized as the most significant venture of the century. While we can’t look into the future one thing is sure, it is an excellent way to make money today, providing you have the proper knowledge of how the whole system works. How to trade cryptocurrency and what are the strategies to use?
What is cryptocurrency?
Cryptocurrencies are made up of bits and bytes of data and aren’t tangible (the main reason why people are being suspicious of them). There is no regulatory body, thus, their circulation and flow can’t be controlled by centralized bodies.
Despite not being legally monitored, crypto engages more and more attention changing the financial landscape all around the world. It’s an extremely volatile currency, thus all the trading is performed at the investor’s risk (as all the trading anyway).
Types of cryptocurrencies
The first introduction of Bitcoin (an original cryptocurrency) was in 2009, and since then the number of cryptocurrencies has risen to 10 000. However, the attention is typically drawn to Bitcoin (and its additional virtual coins Bitcoin Cash and Bitcoin Cash ABC), Ethereum, Litecoin, Cardano, Solana, Axie Infinity, Uniswap, etc.
Cryptocurrency trading essentials:
Before any trading is proceeded, it is essential to get an overview of all the types of cryptocurrencies and understand the differences between them.
1. Choose the platform for trading and create your account
Check attentively the platform’s information, and make sure it is eligible for the types of currencies you want to trade. Besides, it will be good to have a trial period, a so-called demonstration mode, to check how everything works, like a Pocket Option demo. This is the best way to try your hand at trading without losing anything. The Pocket Option is a tried-and-trusted platform for those who are willing to start trading not only with cryptocurrency (Bitcoin, Ethereum, Litecoin, EOS) but with traditional ways as well (shares, gold, silver, futures, binds, etc).
2. Fund the account
Trading requires an initial investment. Bank deposits via debit cards and wire transfers will work just fine, however, wire transfers are typically more cost-effective.
3. Choose the cryptocurrency for investment
Typically, trading starts with the most recognizable, for beginners, currency – Bitcoin, as it has relative predictability. Yet it’s worth investing in alternative coins (altcoins) as well because they can have a significant rise, bringing more profit.
4. Start the trading
Generally, we can define three main types of trading:
● Intraday trading (day trading)
The traders enter and exit the positions within one day. It can bring quick profit and saves from the risks of night fluctuations of the market. However, such easiness of profit can make people obsessed with it, causing excessive distress when losing.
● Swing trading
Mid-term trading typically takes up to 30 days. Such an approach requires more research into the market, the latest tendencies, and possibilities of performance. When being well-aware of everything, you can make up the strategy and stick to it during a certain period. This approach is definitely less stressful than day trading, yet requires more knowledge.
● Trend trading
The best option for long-term profits involves buying the assets and keeping them for a longer period of time. As a rule, such trading starts small and builds up over time. Yet again, you need a decent knowledge of market tendencies.
5. Cryptocurrency storage
Cryptocurrency is typically stored in crypto wallets – software and hardware wallets. With both types being highly-protected, the hardware wallet is a better choice as long as it’s not connected to the network, thus, there are no chances to steal it.
Cryptocurrency trading is mainstream nowadays. Even those who are deeply into traditional investing acknowledge the fact that cryptocurrency is the future of the financial market. Crypto trading has no governmental regulation, it is protected from inflation and brings a better profit than traditional investments. If you are still in two minds, carry out the research into the types of cryptos, check the platforms with demo versions to check how everything works, and start trading your way to crypto-wallets.
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Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.