Cryptocurrency trading for beginners can be a little bit daunting. Charts, order books, indicators, divergence, stop losses. For a newbie to trading, it can be a little overwhelming. However, trading cryptocurrency can be far more profitable than just hodling some coins and hoping for the best.
For established traders, it doesn’t matter if the market is rising or falling. There is potential for gains regardless. That’s why we’ve put together this handy guide for beginners to get you on your way.
What do I need To Start Trading Cryptocurrency?
There is no one size fits all strategy for Cryptocurrency trading. There’s no magic formula and there’s no perfect bot that can do it for you. Crypto trading is a process. As you develop your skill set, experience and knowledge you will find what works for you.
Experienced traders who have great success will have spent years honing their skills and refining their strategies. So don’t worry if it doesn’t all click into place immediately.
There are some basics and easy to understand ways for beginners to begin their trading experience. These are very easy to grasp and will allow you to earn while you learn.
Cryptocurrency Trading Education.
So you’ve brought some Bitcoin and you’re raring to go but you’ve got no idea where to start. You’re going to need to learn the basics. Education is key to being able to trade Cryptocurrency. You’re going to need to know the basics of understanding charts, be able to read an order book and buy and sell coins.
There are lots of places that you can learn. However, I’ve found some of them to needlessly be expensive and complicated. Many will overload people with complicated strategies that just end up causing confusion. You don’t want to run before you can walk.
One great resource I used when first starting out is Baby Pips. It is a site that was made for forex traders but many of the same principles for understanding candlestick charts and indicators apply to the Cryptocurrency market. It’s a free site so it won’t cost you anything.
For those of you wanting a more Crypto orientated education platform Low Cap Crypto CEO Ash Davidson has launched his very own courses tailor made to suit all needs.
Whether you just want the basic stuff or a more in-depth learning experience he’s put together packages and services to suit all levels. From easy to follow courses to live support sessions and so much more there’s something for everyone.
You can check it out for yourself here.
There are so many exchanges these days. Choosing the one that suits you best is very important for a newbie trader. Choosing an exchange that’s simple and easy to use will make life far less complicated.
Binance is by far the most user-friendly exchange around. Depositing is simple and easy. It gives you the information traders need in a very straightforward way. It also has more advanced charts as your experience grows.
As well as that, Binance has integrated trading view charts. This means you can set your charts up easily with the indicators you want.
Buying and selling coins is made simple and the order book is clear and easy to follow.
Other good exchanges like KuCoin and Bitmex are also very popular with people new to crypto trading.
Risk management In Cryptocurrency Trading.
A very important part of trading is how to effectively manage your risk. You don’t want to end up too exposed in one area only to see your gains wiped out in a correction. We’ve all made the mistake before and it’s a brutal lesson to learn.
Setting yourself rules will help. One effective way to manage your risk that’s popular among traders is the 10% rule. This is very simple and easy and limits your risk substantially.
The 10% rule means that you should only risk 10% of your trading funds on any one trade or coin. This leaves 90% of your trading pot free for other trades and opportunities. Stick to this rule and don’t go chasing after losses.
Over time you may increase or decrease the % you risk to suit you specifically but 10% isn’t a bad place to start
The golden rule Of Cryptocurrency Trading.
When it comes to risk management there is one rule above all others that you should always remember.
Do not risk more than you can afford to lose!
Since I started on my journey into Cryptocurrency trading I’ve seen people take out loans, lose their houses and their families. While Cryptocurrency is a great opportunity to make money it’s also a very risky business.
You can lose it all.
That’s why it’s important not to invest any money that if you lost would put you into any kind of financial difficulty. You might get lucky and win big taking risks like that but for the most part, taking those kinds of risks often ends badly. The Cryptocurrency markets are still in their infancy. Anything can happen. Don’t get caught out by greed.
What to trade?
I’m not going to tell you what to trade. The best way to identify coins you want to trade is through research. You ideally want to look for coins that serve a real purpose or have a real use case. That lessens the likelihood of investing in a scam coin or a coin that’s going nowhere.
Also, it’s handy to follow the news for the coins you choose to invest in. Check out their social media such as Twitter and Facebook. It’s also handy to join your coins official Discord channel too. That way you can keep up to speed with developments and put questions you have directly to the dev team.
Following these simple steps couldn’t be easier. Before you know it you be trading crypto like a pro!
Don’t forget, if you want more information about trading crypto check out our trading basics section here.