Cryptocurrency still belongs to the category of new and unexplored ways to make money. Therefore, the more investors learn about cryptocurrency, the more popular trading on cryptocurrency exchanges becomes. Most people have an idea of what a cryptocurrency is.
But how do you become a cryptocurrency trader? The difficulty lies in finding out when the value of the cryptocurrency falls and when it rises. You will need to learn the basics of crypto trading because you shouldn’t invest in something you don’t know.
You need the following to become a cryptocurrency trader:
- Select the exchange that you will use for trading.
- Select the cryptocurrency pairs you are going to trade.
- Analyze the selected cryptocurrencies, study the growth and fall charts of their value, and study the current market situation.
- Study the trading tools and strategies to improve your trading performance.
How to choose a cryptocurrency exchange?
Сrypto trading is carried out on specialized platforms of cryptocurrency exchanges by analogy with stock exchanges. When choosing a platform for making money, you should pay attention to the following criteria:
- The reliability of the cryptocurrency exchange.
- The simplicity of the interface.
- The need for verification.
- Features of deposit and withdrawal of funds.
- Supported cryptocurrency pairs.
The choice of a cryptocurrency exchange can even be called individual in a sense since it all depends on how convenient the interface is.
For example, the Binance cryptocurrency exchange is at the top of the Coinmarketcap ranking in daily trading volumes. Besides, the exchange does not require verification unless you plan to trade in large volumes. For beginners, the Binance exchange is a good solution, given that it is quite easy to register, and more than 200 currency pairs are offered for trading. Unfortunately, the exchange does not support fiat money, so you will have to fund it through other cryptocurrency accounts or exchangers. Someone can be scared off by such difficulties.
How to choose cryptocurrency pairs for trading?
There are more than 2,000 cryptocurrencies, so it is clear that all of them will not be used for trading. It is necessary to select the most promising pairs. And there are a number of secrets here.
- Beginners should choose pairs that include cryptocurrency and fiat currency or stablecoin. Accordingly, the rate of fiat currency or stablecoin is more or less stable, so it is easier to conduct analytics.
- Moreover, a currency pair must be actively traded in the market so that a trader can make an instant buy or sell deal without wasting time.
- The importance of having a lot of supply and demand is also due to its resistance to high rates. Large players do not have a serious impact on the value of cryptocurrencies that are actively traded on the market, which is not to say about those altcoins, for which there are an order of magnitude less offers.
Remember that crypto trading is always a risk, like any type of investment, so it is recommended to start with small amounts. It will not be possible to accurately predict when a particular cryptocurrency falls and when it grows. You need to study the market’s general dynamics to understand what events and news can lead to a fall or, conversely, an increase of cryptocurrencies.
Crypto trading as an investment in the short term is profitable from the point of view of possible profit in any scenario, be it a fall or an increase in value. However, there is a high probability of losing money in the early stages, so it is recommended to study with small amounts. It is also important to develop yourself professionally, namely, to read specialized literature, listen to expert opinions, study all kinds of strategies since you can become a successful trader only if you have a professional approach. Amateurs lose money very quickly and get frustrated.