How To Start Trading Cryptocurrency?

The idea of investing in cryptocurrency started as a mere curiosity. However, considering how unique the opportunity seemed, almost everyone, especially the younger generation jumped onto the bandwagon. And, well… you’ve guessed it right. I was a part of the band too. 

For me, it all began with a YouTube video, which introduced me to Bitcoin and made me dream about how this was going to be the future of finance. I was intrigued. So, the only thing that seemed natural to me at the moment was – why don’t I invest in the market and find out what happens? 

The problem was, while everyone was asking me to invest ASAP, no one answered me when I asked – how to start trading cryptocurrency. Thankfully, I did some research and found the answer myself and now, I’ll spill my secrets here. But before that, let’s discuss something else. 

Should You Invest In Cryptocurrency Or Not? 

Of course, you should.  

That’s why you’re here, isn’t it?  

On a serious note, I can understand why you’re being cautious. Cryptocurrencies, much like the stock market, are extremely volatile and require the trader to do a lot of planning in order to make profits. But let’s think about the positive side too, shall we? 

As crypto is highly unpredictable, the risk of you losing your money is almost the same as the chance of doubling up your funds. I mean, look at Bitcoin, for example –  

Source: Statista 

On May 26, 2022, BTC’s price was dangling around only $29,000. Many people suffered massive losses due to the price drop they suffered during the COVID-19 times and ended up selling whatever coins they had in their wallets. But the people, who didn’t kill the cat of disappointment, can sell each of their Bitcoin for almost $97,000 now.  

Also, some cryptocurrencies, like Ethereum XRP, and NEO, also allow you to earn passive income through staking (by using your assets to verify transactions on blockchain). And if you are really concerned about losing money, why don’t you try diversifying it?  

But How To Start Trading Cryptocurrency As A Beginner? 

So, where do you begin? Should you create an account on a trading platform first? Or will it be better if you buy a wallet and put your money into it before that? 

None.  

As you’re just starting out, it’s important to understand two things:  

• What kind of trader are you?  

• Which cryptocurrency looks to be more promising in the long run? 

Being a beginner, you simply cannot go for day trading, right? It’s too fast-paced, and you’ll need to learn about more than 100 different (and trendy) cryptocurrencies before making an investment. 

So, first, invest in a stable currency to get a feel for the market and how it works. Bitcoin would have been a great choice a few years ago, but you probably don’t want to invest $100,000 suddenly. Hence, as an alternative, you can always go for XRP.  

Here’s what its one-year price trend looks like – 

Source: Google 

Unlike BTC or Ethereum, it’s quite low-priced right now. And it’s also potentially future-proof, considering –  

• XRP can be used for cross-border payments (average transfer time of 3-5 seconds).

• It’s highly secure due to being created by quantum-resistant algorithms.

• Ripple (XRP) also has made partnerships with fintech companies and central banks.

Ethereum could also be a great option for people who are learning crypto trading basics. But its pricing has been experiencing ups and downs for almost a year, so it’s better to wait for now.  

Secondly, even if you are investing in XRP, put only a specific amount of money you can afford to lose. For example, you can buy 10 coins for now (costs around $26) and create new crypto market strategies (and try them) while waiting.  

When Do You Choose The Crypto Trading Platform? 

Once you know what kind of currency you want to trade have a strategy at the ready. 

The thing is, every cryptocurrency trading platform has a unique trait (or two), different kinds of pricing, special security shenanigans, and whatnot. So, when choosing the best crypto trading platform, you can simply pick out three of the most popular options and compare them. 

Let me share information about a few crypto trading platforms to make it easy for you –  

• Binance: Has some advanced features that will probably be none of your use. However the security level of this platform is really high, and the fees are relatively low as well. 

• Coinbase: One of the most user-friendly options on the list. However, it has had its fair share of security concerns and issues in the past. 

• Kraken: An amazing platform for security and regulatory compliance. Nevertheless, its pricing structure can be a little high for some people. 

What Are The Best Crypto Trading Strategies For Beginners? 

There’s nothing called ‘the best strategy.’ Your way of trading would be different from mine, so the strategy you choose would obviously be unique in its own accord. I can share some basic, beginner-friendly strategies you can start with, but as you gradually become a better trader, you have to create something of your own. And DON’T share that with anyone. 

Okay, so, let’s talk about the crypto investment strategies now.  

If you’re all about ‘in it to win it,’ spot trading could be a great option for you. For this, you have to pre-plan and target a specific currency for a day and keep on buying and selling it for a small profit. It’s a great option if you can sit in front of your mobile or computer all day long.  

However, if you’re more of a ‘let’s take it slow’ kinda guy, swing trading could be a great option for you. In this case, you can buy a trendy cryptocurrency and hold it for a few days to follow its price movements closely. Sell it whenever you’ve made enough profit. 

Here’s how swing trading works – 

Source: Investopedia

Finally, as a beginner, it’s probably better to make a long-term investment and hold onto it for as long as you can. This is called HODLing. However, you should only use this strategy when investing in a more stable currency, such as Bitcoin, Ethereum, or any other stablecoin. 

Now, let me share some other top tips for new crypto traders too. 

If you’re feeling too confident, technical analysis (reading charts) should offer a good learning experience to you. Fundamental analysis, on the other hand, can teach you how to assess real-world factors that might be affecting the price movements of a cryptocurrency.  

The Bottom Line 

Before I conclude, there’s something I’d like to remind you. Many people think learning how to start trading cryptocurrency is all about creating a strategy and letting it dictate when and how you should buy and sell your assets.  

No, it doesn’t work like that. 

Risk management in crypto is a huge part of the trading process, and it will ensure that you’ll be able to have a profitable experience or not. Also, understanding crypto market volatility for new traders will be immensely important if you are in it for the long run. So, make sure you’re not blindly following the beginner cryptocurrency tips I have mentioned here. Use your knowledge as well and come up with an unbeatable strategy.  

Good luck!