Only a few months ago, in April 2021, the total combined value of the crypto markets touched a massive $2 trillion, with over 5,000 different cryptocurrencies being available, and these numbers are only increasing each new day. This comes as no surprise given the hype it has received in recent years. As an outsider, you may be scratching your head, wondering what all the fuss is about and how this has become a global phenomenon. So, what exactly is this crypto thing about which everyone seems to have an opinion these days? And what should beginners know when starting crypto trading?
Cryptocurrencies: The Basics
A cryptocurrency is a virtual or digital currency that can be used to purchase goods and services, making it a secure payment method. There are no actual coins or bills involved, and all transactions are completed online. It used an online ledger with solid cryptography to ensure the security of online transactions. It allows you to purchase goods and services or trade them for a profit. Cryptocurrencies operate on blockchain technology, which is a decentralized technology that handles and records transactions across numerous computers. As a result, it is a shared public ledger that records all of the transactions that have ever occurred in a network.
Despite cryptocurrencies being extremely volatile in nature, they are seen as a viable trading option, largely due to the high returns that it offers, in addition to other factors such as low-effort investment and detachment from traditional financial systems.
Crypto enthusiasts also believe that crypto will be the currency of the future. They believe that the irreversible blockchain technology can be trusted with its decentralized processing which keeps their identity anonymous and their payment more secure than the traditional ones.
The revolution is underway. Cryptocurrencies are being purchased by institutional investors. Large corporations have begun to accept them as a form of payment in exchange for their goods. Cryptocurrencies are changing the world.
The majority of investors understand that a well-diversified portfolio is a healthy portfolio. You know how they say not to put all your eggs in one basket. It reduces risks and protects investors from large market swings. Due to the regulations on minting, cryptocurrencies are also being used as an excellent hedge against inflation. Another factor that has contributed to its popularity among investors is its liquidity. It is now easier than ever to exchange your cryptocurrency for fiat currency. Acknowledging the facts may be one of the best investment alternatives.
As a newcomer, you should be aware that various types of trading platforms allow people to trade cryptocurrency; therefore, you should select the one that provides better services, has lower charges or fees, and accepts cryptocurrency. To begin trading cryptocurrency, select a cryptocurrency wallet and a derivatives exchange to trade on, and you are ready to go. Then it's just a matter of getting verified with the exchange and funding your account. And you are now an expert in cryptocurrency trading.
The following are 5 essential hacks for beginners to cryptocurrency trading
#1 Understanding margin and leverage
We're all aware of the price fluctuations that crypto exhibits. Because crypto markets are so volatile, traders can profit in both bull and bear markets. But how do we use this to our advantage? Margin trading is the solution. To put it simply, margin trading allows traders to "borrow" capital to gain increased purchasing power and open positions far more prominent than their "real" account balance. Margin trading is also known as leverage trading since "leverage" refers to how a trader can multiply their position. Margin trading enables experienced traders to open positions that have the potential to be far more profitable than they would otherwise be able to access.
#2 Picking a suitable exchange
There are numerous crypto exchange options available. Take your time deciding which one is the best fit for you.
- Fiat to crypto exchanges: These exchanges allow you to acquire cryptocurrencies with regular payment methods like credit cards, debit cards, and bank accounts.
- Crypto to Crypto exchange: Exchanges that allow you to buy one cryptocurrency with another are known as crypto-to-crypto exchanges. This implies you'll have to acquire a cryptocurrency on a fiat-to-crypto exchange and then send it to the crypto-to-crypto exchange's wallet before swapping for the coin you originally wanted to buy.
- Peer-to-peer exchange: A peer-to-peer exchange matches buyers and sellers but does not take the other side of the transaction.
- Spot exchanges: Spot exchanges allow for the direct exchange of cryptocurrencies through buying and selling in a crypto spot market, where you have direct ownership of the cryptocurrency.
- Derivatives exchange: This involves contracts with a trading agreement. When you buy a crypto futures contract, you agree to purchase or sell a particular cryptocurrency at a future date rather than owning the underlying coin.
#3 Exploring derivatives
With such a large number of crypto exchanges to choose from, it's more complicated than ever to select the appropriate one for you. So, when you select one, be sure it is reliable.
- Security: When it comes to a cryptocurrency exchange, security is extremely crucial because the security of your assets and personal information cannot be compromised in any way.
- Trade volume: The volume of trading is significant to the trader since it influences transaction costs. As a result, users are affected by this concept, which determines their entry and exit points.
- Fees: For someone who trades derivatives regularly, fees are significant. The cost of a transaction varies according to the derivatives exchange.
- Liquidity: In a liquid market, a seller will find a buyer fast without cutting the asset's price to make it more enticing. A buyer, on the other hand, will not have to pay a more excellent price to get the asset they want. As a result, it's critical to keep an eye out for this factor.
These are the most important factors to consider while choosing a crypto derivatives exchange. User interface and experience, platform reputation, exchange methods, order book, algorithmic trading tools, and technical analysis tools are some of the other factors to consider.
#4 Technical analysis
If you have trading experience, you might want to grasp the fundamentals of technical analysis (TA). TA includes searching past volume and price trends and current volume and pricing to predict what will happen in the future. To put it in another way, plotting everything on a chart can help you see potential price trends quickly and easily. The Ichimoku Cloud, Bollinger Bands, Fibonacci Retracement, Moving Average, and Relative Strength Index are some famous crypto technical indicators.
#5 Picking the right wallet
Crypto wallets are software programs that allow you to keep track of your cryptocurrency balance and perform transactions all in one spot. It keeps track of both your private and public keys. The private key is a randomly generated string of numbers and letters used to send bitcoins to another person. The public key, on the other hand, is derived from the private key via a hash and is used by others to send cryptocurrency to your wallet. The following are some examples of crypto wallets:
- Desktop wallets: you can easily download and install this wallet and access it from your desktop.
- Online wallets: because they are hosted in the cloud, you can access them from virtually anywhere in the world.
- Mobile wallets: Mobile wallets are similar to desktop wallets, but they run on smartphones.
- Hardware wallets: These wallets keep your keys on hardware devices.
We hope you are a little more confident now that you are well aware of all the crucial hacks and strategies that you should exhibit as a newcomer to this. You can begin whenever you want. Take your time, analyze your options, then make the best decision. You can set-up on C-crypto Trade's trading platform to try it all out.
How do you get started on crypto trading with C-Trade?
You can open a new account and begin trading in just a few minutes. Follow the steps outlined below to receive the best sign-up bonus on the market and the quickest registration in 10 seconds.
- Visit: https://www.c-trade.com/app/
- Click the Register button to sign up for an account. Remember to put on your Referral ID if you have one. After you've registered, go back to the link above and click the Login button.
- Confirm your email address to activate your registered account.
- After logging in, you'll be taken to the trading dashboard, where you'll see a BTCUSD Chart (you can change the trading pair in the top bar by clicking on the arrow next to BTCUSD) and the order book with open standing orders.You can also see the current funding rate, trading details, and recent trades by scrolling down a little. In the bottom left corner, you can see your positions, orders, and so on.
- To begin trading, you must first fund your account. You can do so in a few simple steps by clicking on 'Wallet' on the top right corner, where you can make deposits and withdrawals.
- Finally, if you want to view your order history, click the 'Orders' button on the top right corner, and you will be taken to your order/trade history.
That's all! You are now ready to use the platform.
The cryptocurrency market is volatile and unpredictable. As with any investment, you should be aware of the potential pitfalls and decide whether you are comfortable with the risks associated with these instruments.
Individuals should pay attention to the amount of money they invest in the cryptocurrency market. After learning all of the principles and fundamentals of trading, traders should execute trades correctly to increase their chances of making large profits.
Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. C-Trade, its affiliates, agents, directors, officers, or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same