Cryptocurrency trading strategy for beginners

Profit can be easily made with the gap between the cheap purchase an expensive sell. Look for companies or ideas that have potential to raise the value of their coin and do proper background checks before investing. The reason why people should invest in ICOs is that the price is so cheap and the potential of the price blowing up to be the next BTC is something that is too huge to ignore. Trading strategies have been practiced since the first human civilizations formed. This means that even though we have converted them to our current trading market, the basis of everything is still bartered trade.

What are we trying to say here?

Click here to check out the ebook. General Trading Strategies One of the advantages of learning new things is that you do not know anything about it. Why would you want to sell a perfectly fine position crypto?

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Profit is made if you can buy for a cheaper price after you have sold it for a much higher one. This is because Day Trading is holding an asset from a couple of seconds to a few hours but never more than a day.

Trend Trading, on the other hand, is when the trader looks for a longer timetable and keeps the asset between weeks to months. Swing traders hold an asset for a couple of days up to a few weeks. Scalping — A trading style not selling tickets for a higher price that is the most active one to date. This is because a trader that follows scalping takes advantage of smaller gains but on a larger scale.

Multiple entries and exits will pile up and make a hefty sum. Buying at this time is the cheapest since everything goes down so fast but would also have a greater risk of not going up again due to involved instances. Copy Trading Strategy Copy trading is a feature that is being introduced by a couple of trading websites today with the example of 1Broker.

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Buying at the Right Time One of the basic strategies that you can look into is buying at the right time. Conclusion Trading strategies have been practiced since the first human civilizations formed. Score more wins to consider your strategy a success. When it comes to swing trading, the time period varies. Whilst in day trading and scalping, traders typically open and close positions multiple times within a day.

In swing trading, this happens within a much longer period. This could be anything from a few days to a few months. A crypto swing trader will aim to take advantage of an incoming or ongoing trend. It means buying when the price is low and selling when the price is high.

Extensive application of both FA and TA techniques is necessary when using this strategy.

Also called trend trading or following the trend, this strategy involves long-term investing in assets. The only difference is the long time periods between opening and closing a position. Trades set up through this strategy could take months and sometimes years. It is an ideal strategy for investors favoring a more hands-off approach. A crypto trader would invest in a coin or token and hold it even when the prices are plummeting. Margin trading is not a trading strategy but rather a trading method. Adopted from the traditional stock market, it involves a trader using borrowed capital to open positions on a trading platform.

As anticipated, the results from trading on margin are greatly amplified to either direction of the trading position. If you score a win, the reward is much larger, and the reverse is also true. If the trade goes sideways, you also lose a lot more. Margin is the amount of capital you stake in a position. Leverage is the amount of capital you borrow to open a larger position. Liquidation is the price at which a trade is automatically closed when the price moves against your position. To better understand leverage, assume you enter a trade with 5x leverage.

It is another essential part of your success journey. Risk in crypto trading refers to the chance of an undesirable outcome happening. You may have heard that trading cryptocurrency is risky, and that is true, but so is trading all other financial instruments, including stocks and bonds. What differs is the level of risk. There are different kinds of risk, and in this section, we will discuss those related to cryptocurrency trading. Now that you understand the kind of risks you are most likely going to encounter, you should factor them every time you are about to make a trading decision.

Professional traders rarely have just one asset within their portfolio. Therefore, to juggle all their investments and trades, they need specific tools to be efficient while trading.

They are software applications for desktop, tablet, and mobile devices that help track every kind of investment you make in the crypto market. By tracking your portfolio and measuring your performance, you can easily improve upon it and make better trades. When it comes to crypto portfolio management, you want to know how much of a particular asset you hold and where it is stored. You also want to know how much you are gaining or losing from a particular trade or investment. Keep in mind that you could have to maintain multiple portfolios.

To be a profitable trader, you will need a suite of applications from data portals and news aggregators to portfolio trackers. They all work in tandem to offer you real-time data you can use to make better trading and investment decisions. There are hundreds of cryptocurrency exchanges in the market today. Some are centralized a company runs them , while others are decentralized a community runs them.

Whichever option you choose comes down to your preferences. But here are a few factors to consider when choosing the best crypto exchange for a beginner:.

Given the factors above, we recommend you check out Binance exchange as the best cryptocurrency trading platform for a beginner. It is the most popular crypto trading platform, supports a large number of virtual assets, and constantly works towards improving the trading experiences of its customers. Additionally, the user experience is ideal for a beginner. There are both Classic previously named as basic and Advanced user interfaces catering to both beginners and advanced traders. You can also download a mobile application on either iOS or Android and trade on the go.

This guide was prepared by a professional crypto data analyst and investor. Hopefully, you have learned a lot and you are now more informed and knowledgeable about cryptocurrency trading and investing than you were at the beginning.

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We enjoyed researching and writing the guide with you in mind. Good luck! This is because it has some of the lowest trading fees in the market, provides a complementary mobile app for users to keep track of asset prices on the move, has a comprehensive education resource section and supports one of the broadest selection of payment methods. Additionally, it adheres to strict safety and security standards. All these are factors that make it ideal for a beginner. It depends on your goals. Looking for short-term gains, then scalping and day trading would be the best strategy for you.

If, instead, you are looking for long-term gains, consider position trading or holding your coins over a long period HODL. Crypto trading is profitable, but only if done correctly. Follow the steps, strategies, and tips shared throughout our guide, and you will be in a better position to make profitable trades. And a golden rule: Plan your trade, trade your plan. Trading cryptocurrency is not unlike trading stocks in the traditional markets. The principles are similar albeit there are a few differences in execution. To start trading crypto, follow these steps:.

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