How to Get Started Trading Cryptocurrencies

The cryptocurrency market works a lot like the forex market, and so understanding the foreign exchange market for a start can be a good primer for understanding the cryptocurrency market.

Forex trading involves exchanging one currency for another at a given price and then exchanging them back when the price changes. Ideally, you should make a profit in the process. Cryptocurrency trading is pretty much the same. The only major difference is that you aren’t buying and selling fiat currencies with crypto trading. Instead, you are buying and selling cryptocurrencies.

In trading, whether cryptocurrencies or forex or stocks or futures or pretty much any kind of market, there are two kinds of traders: long-term traders and short-term traders.

Long-term Traders

Long-term traders buy cryptocurrencies and hold them over a long period. That period could be anything from a couple of weeks to a couple of years. Because they study price action over an extended period, they are able to make informed trading decisions that enable them to avoid losing money from short-term dips in value. If you’re a crypto enthusiast or can’t handle the pressure of trading multiple times a day, then you might make a good long-term trader.

Short-term Traders

Short-term traders are looking to take advantage of short-term swings in price. They will typically buy and sell cryptocurrencies multiple times in a few minutes, hours or days. With the characteristic volatility of the crypto market in play, it is possible to make a lot of money this day. Be careful, however, because it also means there is a high probability of losing a lot of money in a day if you do not know what you’re doing. You shouldn’t do this if you are not confident of your trading skills, and if you’re not able to handle the great emotional pressure associated with short-term trading.

How to Get Started

The steps to trading cryptocurrencies are straightforward, especially considering the large number of options you have in this growing market.

Find a Trading Platform or Broker

There are numerous brokers that allow you to trade cryptocurrencies. You won’t trade them directly but as contract for differences (CFDs). They have an advantage over cryptocurrency trading exchanges in that they are much cheaper and offer you a wider range of trading instruments, including options. You also do not need to own any cryptocurrencies I order to be able to trade them when you’re dealing with a broker. There are also not as many restrictions on location in order for you to be able to trade with a broker as opposed to exchanges, which restrict the countries they deal with.

Alternatively, you can join a cryptocurrency trading exchange. There are quite a number here as well. However, you will have to own cryptocurrencies and deposit some of them on the exchange in order to be able to trade. Additionally, you need to be in a country that isn’t restricted from the platform. Make sure you research the security measures taken by the platform to protect your cryptocurrencies before you make a choice as this will be important. You don’t want to make money and then lose it all.

Determine If You Want to Use a Trading Robot

Trading robots like Bitcoin Code and others are programs that buy and sell cryptocurrencies on your behalf. They help to automate the trading process and allow you to do other things that are important to you while still staying active on the market. All you have to do is program the trading robot to trade according to a given set of rules determined by such things as market conditions, trade setups and time of day. Here, again, you have plenty of options. Some robots are even programmed for you with a winning strategy that has already been back-tested thoroughly. You will have to read online reviews to find out which one is best. Be careful about going out and getting one because there are scammers who use robots to rob unsuspecting victims. That is why it is important to read online reviews.

Start Trading

The best way to get started is to get started. It doesn’t get any simpler than that. You can only become a good crypto trader by trading constantly as that will provide you with the practice you need to get where you want. Trading is ultimately a psychological struggle against self, where you battle with your own emotions and psychological states in order to have a winning mentality. The best way to develop that winning mentality is to keep trading and learning as you go.