Many investors like trading cryptocurrencies since it is a very volatile asset type. Trading cryptocurrency may provide substantially larger returns than traditional investments if you can time the market correctly. Of course, this volatility carries far greater risk than less volatile investments.
Cryptocurrency traders sometimes have one of two objectives: to collect Bitcoin (BTC) and/or Ethereum (ETH) or to earn in USD in a shorter period of time. In a crypto bull market, increasing the USD value of your portfolio is relatively straightforward, but increasing your Bitcoin stake is more difficult.
By actively trading your bitcoin, you run the risk of losing it to the market. Due to the volatility of cryptocurrency values, it is very common for traders to lose money rapidly while trading cryptocurrencies. This is why so many cryptocurrency enthusiasts just HODL their Bitcoin and other cryptocurrencies.
6 Steps to trade cryptocurrencies
1. Create a cryptocurrency exchange account
You must first create an account with a cryptocurrency exchange before trading cryptocurrencies. OKX, eToro, Uphold, and WeBull are among the top cryptocurrency exchanges available. All three of these choices have a simple user interface and a wide range of other coins to pick from.
To create an account, you must provide details like your personal identity information, just like you would with a stock brokerage. When creating an account, you will need to submit your Social Security number, address, date of birth, and email address.
2. Fund your account
Once you’ve signed up with a crypto exchange, you’ll need to connect your bank account. Most crypto exchanges offer bank funding through debit cards and wire transfers. ACH deposit (linked bank account transfer) is typically your cheapest option to fund your account – it’s free on most platforms.
3. Pick a cryptocurrency to invest in
The majority of active cryptocurrency traders put the majority of their money into Bitcoin and Ethereum. Because these cryptocurrencies move more predictably than smaller altcoins, trading utilizing technical indicators may be simpler.
Many cryptocurrency traders invest a portion of their wealth in lesser cryptocurrencies. Although small and mid-cap cryptos are riskier than large-cap cryptos, they have greater upside potential. Many minor cryptocurrencies have increased by more than 1,000% in a few months, making them appealing options for risk-averse investors.
4. Choose a strategy
There are several trading indicators to pick from, and most traders evaluate various criteria while buying and selling cryptocurrencies. If you’re new to investing, you might think about buying a Bitcoin trading course.
Asia Forex Mentor is a popular option for learning how to invest in foreign currency as well as other products, including cryptocurrencies. The One Core Program has been featured on various financial information websites. Check out a platform review, consider signing up, and alter your trading strategy.
If you’re a seasoned trader, you may already have a stock trading plan. Cryptocurrency trading tactics are similar to stock trading strategies. Elliott Wave Theory is a personal favorite trading approach that many traders employ.
Because Elliott Wave Theory focuses on the psychology of market mood, it works especially well for speculative assets such as cryptocurrency.
5. Consider using a crypto trading bot
When looking for a crypto trading strategy, you may want to consider automated crypto trading utilizing a platform like Coinrule. Trading bots implement a technique that is designed to produce the best outcomes possible given your investing objectives.
You may make money rapidly, keep your coins, or diversify your portfolio since automated trading can supply you with a conservative, neutral, or aggressive way.
You might even explore trading cryptocurrencies actively on certain sites while employing automatic trading on others.
6. Store your cryptocurrency
If you’re actively trading bitcoin, you’ll need to keep your money on the exchange in order to access them. If you intend to keep your crypto for the medium to long term, you should purchase a cryptocurrency wallet.
Software wallets and hardware wallets are two types of cryptocurrency wallets. Both are secure, but hardware wallets provide the most protection since they keep your cryptocurrency on a physical device that is not connected to the internet.
Many investors trust Ledger as a reliable hardware wallet business to store their crypto holdings on. It supports almost all of the biggest cryptocurrencies and provides low-cost wallets that are all you need to keep your money safe.