Cryptocurrency Trading

Since technology has advanced tremendously, cryptocurrency has also gained immense popularity, especially with day trading.

Keep reading to learn more about day trading with cryptocurrencies while using effective strategies, top-notch software, and other specifications that can significantly help beginner traders conquer the markets.

Top Brokers for Cryptocurrency Trading

The top cryptocurrency trading brokers listed above provide you with ease in finding the most suitable broker for your requirements.

How to Trade Cryptocurrencies

Getting started with cryptocurrency trading is relatively straightforward. Follow these steps to begin your cryptocurrency trading journey:

1. The first step is to decide whether you want to invest in and buy some cryptocurrency or speculate on the currency’s price variations and observe it.
2. If you purchase cryptocurrency, the initial step is to acquire a proper exchange application, such as Hodly.
3. If you do not want to buy cryptocurrency directly, the initial step would be finding a broker. You can choose a good broker that offers demo services from the list highlighted on the broker page.
4. Secondly, you have to have money in your account to purchase cryptocurrency.
5. It is followed by buying the cryptocurrency finally and begin trading with it.

A demo broker account aims to familiarize you with purchasing and selling cryptocurrencies so you can get a better idea of their movements. Still, you would need to buy cryptocurrency to practice, as it is impossible to do so on a demo exchange.

To speculate on the price of cryptocurrencies, brokers that offer Forex and CFDs are the ideal ones to get acquainted with, especially if you are a beginner. It gives you a better chance at exploring than what you can do by purchasing real currencies through an exchange.

Best Cryptocurrency Trading Platform

The platform that you plan to conduct cryptocurrency trading matters immensely. If you are new to this, there are multiple factors to consider before choosing the right tools and materials to begin trading. The exchange will merely serve as a digital wallet, but the factors mentioned below must also be considered.

As various brokers out there are knee-deep in the cryptocurrency markets, they all work very differently. Some offer particular tools and products, while others only specialize in trading. For example, IQ Option provides CFDs and Forex for cryptocurrency trading and crypto money multipliers.

With the help of such tools and offers, traders can reduce risks and double their rewards quite easily. Hence, these need to be considered while opening a cryptocurrency account to begin your day trading.

Apps and Software

With a high-tech app, it is more comfortable and more convenient to keep day traders updated on all the market events occurring every few seconds. If any critical news is missed, it can adversely affect losses and profits.

Most brokers now ensure to keep traders updated with the market’s happenings through cryptocurrency mobile apps, which are highly user-friendly and can be operated on the go.

Different cryptocurrency trading platforms have various trading styles, so choosing the platform that suits your trading needs and practices is necessary.

For example, Global Digital Asset Exchange (GDAX) is offered as a highly convenient and innovative platform by the Coinbase exchange. To understand the tools and offers provided by an exchange, making a demo account to test it out is a wise choice.

Security

Since you invest your digital cryptocurrency in the actual trading market, ensuring that the crypto money exchange you are using is safe and secure is imperative.

Because if your account gets hacked, you will never be able to regain your lost cryptocurrency. It is why a security check is essential, and traders should conduct thorough research and review online to understand the strength of the security system offered by the potential exchange.

Fees

Structures of fees and rates of commission vary from exchange to exchange. Minor rate differences can also amount to severe profits from the many trades conducted by a day trader. While keeping in comparison, the following three fees should be considered:

1. Exchange Fees – The charges for using the cryptocurrency software are known as the exchange fees, and different fees depend on the coins and cryptocurrencies used to conduct trades.
2. Trade Fees – While using the exchange of your choice, the trade fees will be the amount charged while making currency trades. It includes two subtypes – a marker fee for building a selling offer and the taker fee, which is charged for accepting someone’s offer.
3. Deposit and Withdrawal Fees – You will be charged a small fee while withdrawing or depositing your cryptocurrency account. Usually, making deposits is cheaper. It also depends on the mode of deposit/withdrawal you intend to use. While some exchanges do not accept credit cards, others may charge a 3.99% fee on using credit and debit cards, or a bank account would charge around a 1.5% fee on your transactions.

Final Words on Brokers

Do not decide in haste from the multiple options of exchanges to select from. By thoroughly reading reviews, understanding the depths of the exchanges, listing their pros and cons, and taking virtual demos to roam around the exchange platforms, you should only decide on the most suitable exchange for yourself.

A few popular options include Coinbase, Bittrex, CEX.IO, Coinmama, Bitstamp, Kraken, etc.

Cryptocurrency Trading for Beginners

Getting acquainted with a few vital aspects regarding the brokers and exchange platforms is essential to jump into cryptocurrency trading. The following three pointers will help you better understand the depth of cryptocurrency trading:

1. Find out What’s Growing – With so many cryptocurrencies, you must acquire more information regarding the top trending ones and those rising to the top with time. The leaders are Bitcoin, Ethereum, and Litecoin, with others making new waves like Zcash, Dash, Monero, Ripple, etc. More in-depth research is necessary before making the final decision.
2. Embrace Volatility – Since the cryptocurrency world faces tremendous spikes quite often, it should be understood that sudden market variations greatly influence profit and loss. For example, only within three months of 2017, Bitcoin’s price dropped from $3000 to $2000 before finally jumping to $5000. With higher volatility, there are increased risks, but with higher stakes, there are more chances of profit too. To succeed, traders should look closely at the exchange volatility they plan to use.
3. Understand Blockchain – This is a crucial step not missed if you plan to partake in cryptocurrency trading. By getting to know your basics, you can quickly become capable of predicting the market and its price fluctuations. Suppose you can recognize and understand the patterns of blockchain and how all interactions are secured and saved publicly via cryptography to eliminate intermediaries like banks. In that case, you will be able to conduct active cryptocurrency trading.

Crypto Wallets

Cryptocurrency needs to be stored in wallets if you plan to own any. Like there are various cryptocurrencies and exchanges, your cryptocurrency wallets are of several types, each with pros and cons. One of the most recommended services includes Hodly, which has reliable reviews.

Strategy

To start trading, you must understand how blockchain works and how the trading markets move. It is followed by deciding on the broker you plan to pair up with and finally putting funds into your account.

Once all these tasks are performed, choosing and implementing an effective and sturdy strategy to guarantee profits is crucial. A great example of an unusual approach is Swing Trading:

Swing Trading

Swing trading revolves around keeping a strict and vigilant lookout for trend corrections. The idea is to get hold of the ‘swing’ out of the correction, followed by reentry into the pattern. Corrections do not move the way rapidly trending prices move. When price bars or candles overlap, it is known as a correction.

For example, you have 250-minute candles on your cryptocurrency chart, and 25 candles are regularly found in a range of 100 points. Now, you should know when to take an interest. The ideal step would be to find overlaps and look out for daily movements of even 20 points. With the help of this, you are better aware that the price changes will continue in this trend.

To make a profitable sale, when after an extended range of similarly ranged candles, one candle for the first time moves below the range, this is the best time. If you notice even a tiny high swing recently, it is a signal that you should stop the trade. The strategy is quite efficient and relatively easy to execute.

Tips

To improve profits and reduce the number of losses, it is crucial to have the right tools like a good broker, strategy, software, and capital. However, the following tips can help make your cryptocurrency journey even more fruitful despite possessing all the right tools:

Utilize News

Prices of cryptocurrencies tend to fluctuate a lot, mainly if the crypto money is traded for the short-term, and the hacking of exchanges or shifty government regulations are frequently occurring.

However, once a multinational company takes any cryptocurrency on board, the crypto money prices rise rapidly. Therefore, it is necessary to stay well updated with all the news relevant to cryptocurrency trading and its markets, so quick actions can be made if the need arises for them.

Technical Analysis

As historical patterns tend to resurface within the market’s movements, it is a brilliant idea to thoroughly analyze historical price charts and get well-versed with all relevant trends.

If you can predict future movements in cryptocurrency prices with the help of these ancient patterns, your profit potential will be much greater. Click here for additional details regarding the recognition and usage of such trends.

Study Metrics

To maximize your profits, you need to make better and more accurate predictions, achievable by studying metrics. It is a precious tip that does wonders in improving your profits.

For example, look at the number of wallets and the current trading volume compared to the actual number of wallets. Here, you can assign current values to a few particular cryptocurrencies, guiding you in decision-making on the daily market prices.

Trade on Margin

When particular price shifts are expected, traders borrow money while trading on margin. This can improve your profits, especially if your prediction comes true. Considering the various margin requirements and rates offered by exchanges, it is vital to conduct your research beforehand.

However, trading on margin increases potential profits and losses, so remember that it could go both ways. Two popular margin platforms include Huobi and Bitfinex.

Rules and Taxes

Since we are still discovering and exploring the digital market, its concepts are not fully understood by everyone as yet. Therefore, governments and countries are trying to impose taxes and set new rules and regulations based on using cryptocurrencies to get their shares.

It is advisable to acquaint yourself with your country and government’s laws and tax legislation before jumping on the cryptocurrency trading bandwagon.

Rules – For the longest time, the government endured immense confusion in deciding whether cryptocurrencies should be placed under the umbrella or properties or currencies. In 2014, the USA thrust cryptocurrencies into the features category and imposed trading rules on cryptocurrencies.

The traders were called investors and needed to follow all government rules. To read up on the details, check out the IRS notice 2014-21

Taxes – As governments have infiltrated the technological world of cryptocurrencies, it is apparent that they will try to earn taxes from it. While regular income tax in the USA is around 25%, all properties must pay a capital gains tax of 15%.

This applies to cryptocurrencies and can vary depending on the country and its government’s rules and regulations. Before starting cryptocurrency trading, you should find out in detail about your government’s tax policies for crypto money.

Bots

Bots or cryptocurrency trading robots are evolutionary advancements every trader should consider using. With your selected strategies, you can program your bots accordingly, and these bots will then function to automatically conduct trades for you whenever the markets meet your pre-set criteria. The usage of bots has two significant advantages.

With bots doing all your cryptocurrency trading, you will have plenty of extra time on your hands instead of spending it on trying to understand market trends. The speed of your trades will also be a lot faster with bots than it would have been if you tried doing it all on your own manually.

The other significant benefit of using bots for cryptocurrency trading is that, at one time, you can conduct multiple trades using a diverse set of currencies simultaneously with the help of the bot’s automated software. With these aspects being covered automatically, the profits will also be tremendously huge.

Risks

Even though there are numerous advantages of using bots for cryptocurrency trading, it also comes with drawbacks, such as losing your earnings due to unexpected market shifts and events or sudden crashes in the computer software. For this reason, you will also have to keep an eye on your bot’s functionality.

Bots are also quite costly to start with. Some software operators offer trial bots, such as BTC Robot, and this trial lasts for around 60 days. When the trial period expires, they will charge you for your bot services every month, which would become a loss from the profits you made from cryptocurrency trading.

On top of that, to set up your bot and program it according to your trading styles and profile, you would require a professional, which again will cost you more money.

Not only that, but with further unexpected technological advancements, it is highly likely that your bot may become outdated, and you might have to pay extra to get bots updated to meet the ever-changing trading market standards.

As both risks and benefits are attached to using bots for cryptocurrency trading, you should consider the advantages and disadvantages and determine whether a bot will improve your final profits. Investing in an automated bot may be splendid if you already have a robust trading setup with proven and effective strategies.

Education

To commence cryptocurrency trading, it is vital first to get acquainted with the trading world and its branches. The ideal way to obtain this is by creating a demo account first and using it to explore cryptocurrency trading platforms.

You can conduct test trials of the brokerages and platforms that might seem appealing and promising. Once you are delighted, then you may move forward to making purchases.

Another critical benefit of a demo account is enabling you to work on your craft. In the case of accidental mistakes, you will not be at a loss as it is only the simulated money you are playing with. Also, you will have an open chance to learn how to correct those mistakes, implement effective strategies, and execute highly profitable trades proficiently.

Once your grip and grasp have strengthened and you feel ready to use your real money to start trading, you can take a step further and purchase all the necessary tools for cryptocurrency trading.

Various online intraday courses help you learn about cryptocurrency trading more in-depth. Along with using multiple ebooks, books, and online courses, you can gather all the relevant information and strategies to help you get started and make massive profits.

If you dive into the cryptocurrency trading market fully prepared, your experience will be much more worthwhile as you already have the upper hand.

Key Points

This has been a thorough guide for performing successful cryptocurrency trading. There are too many uncertain in the market. Besides the use of cryptocurrencies, which you have the right to be fully aware of beforehand.

Also, if you are well-updated and prepared in advance, it can help you select the top-most reliable brokers and platforms for your trading venture. These selections should be based on the abovementioned factors, such as safety and security, easy accessibility and use, fee structure, etc.

Now you are also well informed on how the top-tier victorious traders use intelligent strategies to build their profits and the latest technology, like automated bots, to speed up your trading process and help take the load off of you.

It is wiser to be educated about it before getting in on the cryptocurrency trading session to maximize your profits and not get trapped in government rules and taxes. This way, you could reduce your losses, enhance your earnings, and better manage your overall cryptocurrency trading.

FAQ:

How does cryptocurrency trading work?

Using a CFD trading account, it is now possible to speculate on the various price movements in the market while, with the help of exchange, trading coins can be bought or sold. All of this is known as Cryptocurrency Trading. Learn more about cryptocurrency trading here, including how it functions and how markets work and move.

Is crypto trading profitable?

Cryptocurrency is quite profitable but comes with plenty of risks involved. Traders tend to make big wins with cryptocurrency trading while risking a lot on each trade. The pressure required is immense, but the payouts are worth the risks.

How safe is Cryptocurrency trading?

There is a multitude of risks involved with any trading. However, traders can profit significantly if they start with a predetermined action plan and conduct ample research before trading. It is risky, and there is no doubt about that, but that is how trading works globally.

How do you buy and trade cryptocurrency?

An exchange account is required to purchase or sell cryptocurrency, and a digital wallet to store your cryptocurrency in. However, if you aim to only trade the cryptocurrency itself, instead of getting involved with an exchange, your only requirement is a brokerage account.

Can you become a millionaire with cryptocurrency?

Becoming a millionaire depends on the type of cryptocurrency you use, your tactics, the market movements, and your luck. Choosing a cryptocurrency with immense market value and potential; therefore, research is vital here.

You can become a millionaire by going all-in or big, but again, this depends on your cryptocurrency type, call of action plans, and how the markets roll. With a good trading plan, you can turn a little money into a lot and eventually become a millionaire.