Before you start trading cryptocurrencies, you need to have a trading strategy. A trading strategy is a plan that guides your decisions on when to buy or sell a coin based on certain criteria. There are many types of trading strategies, such as fundamental analysis, technical analysis, trend following, swing trading, scalping, etc.
As a beginner, you should start with simple and effective trading strategies that suit your risk appetite, time horizon, and goals. You should also learn how to use common trading concepts, such as order books, trading pairs, order types, stop-losses, and take-profits. You can find many resources online that teach you the basics of cryptocurrency trading, such as Binance Academy, Coursera, and CryptoCurrency.org.
How to choose crypto to trade
There are thousands of cryptocurrencies in the market, each with different features, functions, and values. Some of the most popular and widely traded cryptocurrencies are Bitcoin (BTC), Ethereum (ETH), Binance Coin (BNB), Cardano (ADA), and Dogecoin (DOGE).
To choose which crypto to trade, you need to do your own research and analysis. You should consider the following factors:
– Market capitalization: This is the total value of all the coins in circulation. It indicates the size and popularity of a coin. Generally, the higher the market cap, the more stable and liquid the coin is.
– Price: This is the current value of one coin in a certain currency. It indicates the demand and supply of a coin. Generally, the higher the price, the more expensive and scarce the coin is.
– Volume: This is the amount of coins that are traded in a certain period of time. It indicates the activity and interest of a coin. Generally, the higher the volume, the more active and volatile the coin is.
– Trend: This is the direction and momentum of a coin’s price movement. It indicates the sentiment and outlook of a coin. Generally, you want to trade with the trend, not against it.
– Fundamentals: These are the underlying factors that affect a coin’s value, such as its technology, team, vision, use case, adoption, innovation, etc. Generally, you want to trade coins that have strong and positive fundamentals.
– News: These are the external events that influence a coin’s value, such as announcements, partnerships, regulations, hacks, etc. Generally, you want to trade coins that have favorable and relevant news.
How to start trading
After you have chosen a crypto to trade, you need to place an order on the exchange. An order is an instruction to buy or sell a certain amount of a coin at a certain price. There are different types of orders, such as market orders, limit orders, stop orders, etc.
To place an order, you need to select a trading pair, which is a combination of two coins that you want to exchange. For example, if you want to buy BTC with USD, you need to select the BTC/USD trading pair. Then, you need to enter the amount of coins you want to buy or sell and the price you want to execute your order at. Finally, you need to confirm your order and wait for it to be filled.
How to securely store your crypto
After you have made some profits from trading cryptocurrencies, you need to store them securely. There are two main types of wallets where you can store your crypto: hot wallets and cold wallets.
– Hot wallets: These are wallets that are connected to the internet, such as exchange wallets or mobile wallets. They are convenient and easy to use but less secure than cold wallets.
– Cold wallets: These are wallets that are not connected to the internet, such as hardware wallets or paper wallets. They are more secure and reliable than hot wallets but less convenient and accessible.
The best practice is to use a combination of both types of wallets depending on your needs. You should keep some crypto in your hot wallet for frequent trading and spending and keep most of your crypto in your cold wallet for long-term holding and saving.
Congratulations! You have learned how to invest and trade in cryptocurrencies as a beginner. Remember that cryptocurrency trading is risky and unpredictable so always do your own research before making any decisions. Happy trading!
Dil Bole Oberoi
