Cryptocurrency Trading

Like any other form of financial trading requires appropriate expertise, knowledge and capital. If you are planning to trade on the market for cryptocurrency, it is important to ensure that you possess relevant skills to analyze the market. It is important to note that cryptocurrency is more unstable than traditional instruments and, consequently, riskier than what most people are used to. The volatility could provide greater opportunities to earn profits, but keep in mind that it could also cause greater loss than the amount you’re willing to take on.

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Use pro platforms

first tip is to download a professional crypto trading platform now coinbase just isn’t going to cut it if you want to really step up your game platforms that i use and would recommend are binance ftx and buybit buybit has both spot and futures trading markets they also have a deposit bonus . ftx have both futures and spot markets they have good support not amazing support but good support for cryptos you can get five percent off your trading fees then binance offers some sign up and deposit bonuses as well you know binance the biggest exchange all three of these have extremely low fees and good crypto support.

Understand stablecoins

Very important thing to understand if you’re a beginner is what a stable coin is, why it’s so important in the crypto ecosystem. it’s actually more important really than bitcoin because without a stable coin we can’t really do anything else.

If you want to buy a crypto like bitcoin or Ethereum, you have to obviously spend money to do that and the way you do that in crypto is using a stable coin, a stable coin is essentially a crypto version of a dollar, you take a dollar and you move it into a crypto version of that some popular.

Stable coins are usdt and usdc, they’re just different and you can see tether is number three and usd coin is number five, when you want to go ahead and buy bitcoin obviously on some platforms you can go ahead and deposit us dollars or pounds and you can do that directly, but if you’re trading smaller crypto currencies, you want to you know start trading really professionally in a lot of different ways then a stablecoin is going to be something that you want to get and you can see the price right here is pretty much a dollar for most of these so when you want to trade against something you’ll be looking at a us dollar tether or usdc pair.

Use limit orders

the next tip is to use limit orders, this is something you don’t get on, you know consumer friendly coinbase app and it can save you a bunch of money, so really important to use again if you need to know how to use binance ftx buybit or other platforms .

The advanced trading screen this is actually the classic screen as you can see i’m going to go through to advanced it’s all the same information it’s just a different layout i prefer this layout now what you can see on the right hand side when you want to buy bitcoin is that you have the option to put in a limit order a limit order is when you tell the system the exact price that you want to trade at and if the price doesn’t match your trade then it won’t go through so this is different to a market order because let’s say the price right now is 44114 but i want to trade at let’s say 44112 so obviously my bid you can see right here is underneath the current price now what why this is important is because the price moves around all the time and obviously one two six as you can see is a lot more than one one two so i’m going to bet that the price will jump around and meet my limit order at some point now what happens when you press buy btc right here you have to put an amount that you want to buy press buy btc is that your order will come down on the left hand side and it will be waiting to execute so you don’t actually trade straight away but as you can see right now the price has fallen to 110. so i would have bought at you know 44112 instead of 44 126 or whatever it was so i definitely got a better deal by putting in a limit order right here and you saw that basically live so limit orders can definitely help you out you can spend less money and get a better trade when you put in limit orders rather than just trading at market which is what you do when you use the coinbase consumer app.

Crypto spot vs futures trading

the next thing to decide though is whether you want to trade in the spot market or the futures market there are pros and cons to both and there are different risks of doing both as well i’m going to quickly show you the spot market right here this is the spot market now a spot market means uh basically you use money to buy something so very simply you take dollars right and then you put that into a stable coin like usdt and then you go ahead and buy a cryptocurrency like bitcoin you buy and own that cryptocurrency you can withdraw it into a separate wallet and that is yours now what’s different is the futures market futures are very different in that you don’t actually trade the underlying asset so with futures you take a hundred dollars and then what you do you can turn that into usdt and then what you do is basically fund your account with this collateral that you have now what you can do is basically bet on the price of bitcoin going up or down this is very different and then what happens is that your p l your profit and loss basically goes into into your account whatever that may be now there’s some differences here with the spot market you obviously buy and then hold the crypto and then hopefully sell the crypto at a later date for a profit that’s great with futures because the future that you’re buying is basically synthetic it’s like a synthetic and you all you do is just bet on the price movement so you can actually bet on the price going up but you can also bet on the price going down and you don’t need any crypto in your account futures also allow you to leverage so let’s say you put 100 into into your account you can use 5x leverage right here and then you can trade trades that are worth around 500. now obviously a smaller percentage move of 500 is going to make your profit and loss much bigger than if you were trading only with your cash futures are way more risky because you use leverage you’re taking way more risk because a smaller percentage move in the price is actually a much bigger move in comparison to your initial capital futures have the advantage though of being able to go short which is betting on the price going down futures are definitely for more advanced users if you are a beginner i would stick to the spot market because you can only lose what you invested with futures you can you know lose a lot very quickly you can also gain a lot very quickly so the pros and cons of both but obviously more advanced traders do tend to go towards futures for short-term trading because of those advantages but for most people trading in the spot market is just going to be a lot easier especially for beginners

How to use a TP and SL

next up if you’re day trading or trading over the short term have a specific strategy of where you want to get in at and where you want to get our tap you can have a strategy called a tpsl or a take profit and stop loss that’s very simply just going to be a price level where you’re happy and that you know what your risk is so let’s tr let’s say you’re trading bitcoin at 40 000 and this is where you buy well you can say based on my analysis i want to take profits up here and if the trade moves against me and i’m incorrect i want to cut my losses down here so this could be 42k and this could be 39k all right so you need that specifically when you’re training short term as a strategy the way that you can do this i’m using buybit right here is that you can actually put this in when you’re trading futures you can see by long with tpsl or sales short with tpsl so i’m going to click buy long right here you can see i can put the order price in so i’m going to click this that’s my order price that’s my limit price that’s the price i want to get in at and that is 44142 i’m then going to put my take profit at let’s say 47 and my stop loss and let’s say 42 whatever it may be there are different strategies right here but you can see that if the price falls below its current price all the way to 42 i will sell at a loss that is to stop any further losses occurring if the trade moves against me obviously you can take your profit at 47 and actually these levels are usually dictated by the strategies that you um obviously look out on the chart and the price levels that you’re comfortable with but when you’re day trading or trading futures tps sale is definitely recommended if you’re trading short term definitely having some parameters in here is uh for

Choose your coin

the best next tip is to understand what type of trader you are and choose your crypto coin accordingly if you just want to day trade and you know trade the wider market then most people will just concentrate on bitcoin or ethereum bitcoin is a much larger asset than everything else and so it really trades on macro economic factors now most people day trade with bitcoin because the market is much more liquid and most of the information about bitcoin in fact all of it is pretty much publicly known and that means that bitcoin is a good barometer of how the market is feeding if we go all the way down to number 100 down here a lot of information about these coins is extremely difficult to understand or get hold of there’s not a lot of news sources for them a lot of the information is maybe you know something that the protocol team may know but the public doesn’t know and so that that becomes extremely more difficult to trade because you’re just unaware of a lot of things about these smaller tokens now obviously if you’re looking to maybe you know get into some smaller coins and really become an expert in some certain coins then you may have an advantage over the rest of the market but smaller coins of course just have fewer people trading them and so they might not reflect some of the news that comes out about them because they might not have narratives that go along and get out into the public field where a lot of people are trading them so what i would say is if you’re looking to day trade most people concentrate on the biggest assets because they’re liquid and they can move around with a lot of liquidity so just choose which type of trader that you want to be if a day trader most people choose bitcoin and ethereum or you can come down to some smaller coins and potentially pick pick them up over the longer term because you think of you know some of the things that are going on with them are actually going to make the market re-rate them and change the price over time

Trade news and events

next is to focus on some specific narratives for each coin and understand the market twitter is a great place for this follow people in the know follow people that are active in the industry because getting information from them can help you with your trade so i’m going to explain what i mean by this right now so obviously as of making this article a big narrative going on is that one of these projects namely terra is basically going out and buying a few billion dollars worth of bitcoin this is really important because they basically signposted this to the market on twitter and you know in other news sources saying hey we’ve got a few billion dollars worth of bitcoin to go ahead and buy over the next few weeks now what happens when there’s a big buyer in the market for something well usually the price is going to go up right and what we can see this is the bitcoin chart is that over the last few days guess what the price of bitcoin has come from a kind of support level here and day by day it’s just ticked up a little bit so you have to keep up with news and events in the industry not just looking at support and resistance levels looking at their chart and saying well i think it might go up here or i think it might go down here you’re pretty much guessing at that point but if you understand that there are narratives that go around then you can obviously use those to trade and get a better probability of the outcome that you want so that would be bitcoin the next one is ethereum ethereum as of making this article is going through what they call the merge it’s a big update to its project one of the biggest in its history so there’s going to be a lot of hype a lot of news stories a lot of people trading it and buying in and that means there’s liquidity and price movements so if you understand some of these projects you can go down to cardano solana you know polka dot are there is there anything happening in that ecosystem are they launching new products are they launching new advancements to their chain that is obviously going to come out in in the news and be a narrative that people can trade off if you know what’s happening and in your mind you can set specific dates where it’s going to happen you can then use those as trading events this is the ethereum i’m going to go to ethereum chart right here so just switch over to eth and the merge is really happening over a period of the next few months as of making this article now you can see ethereum charts bitcoin quite well right so they’re right they’re correlated but over the next few months you’re going to see a ton more hype come into ethereum as it moves through and updates and advances its blockchain and this means there could be a lot of trading opportunity moving into that event now you can swing trade this and say i’m just going to kind of buy this for the next three four months and ride a move up potentially so there are different events that happen in the industry but if you’re just going off charts you’ve got no chance whatsoever you need to at least know one or two projects intimately and they’re the ones that you can trade and gain some advantage on

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