Learn everything you need to know before you start trading Bitcoin, Ethereum or any other cryptocurrency.
The value of cryptocurrencies have been increasing over the last five years. Today, it’s a dynamic environment with increasing opportunities to trade and make a steady income.
Trading crypto is a good choice for a beginner as you don’t need create wallets and private keys. You can jump right on in and begin to learn how the market works especially in terms of the fluctuating value of the different coins.
Trading crypto in the UK
A range of established forex exchanges and new platforms are embracing cryptocurrency trading. The trick is to find the one with the features that work for you.
Here are two great options to get started:
eToro would describe themselves as an accessible trading platform that incorporates a social element into investing. I’d describe them as Facebook for trading. They first went live in 2006, and are now the world’s largest investment network with a community of 4.5 million users and over 400 million trades so far.
The platform and the wider phenomenon of social investing have been widely covered by mainstream media, including a recent BBC documentary called Traders: Millions by the Minute.
The most unique feature of eToro is probably ‘CopyTrader‘. This allows you to sort through other users and plainly see their trading history, including how much they have made or lost over any given period. If you find someone you like the look of, you can allocate some funds to automatically copy their trades.
Etoro is just one of many different cryptocurrencies exchanges that you can use to trade crypto. For a full and comprehensive review, head on over to cryptocoindude.com and check out the 10 best cryptocurrency exchanges for trading cryptocurrencies
This page will give you a route map to choose the exchange that meets your exact needs.
How cryptocurrency trading works
With the growth of the internet, market trading is no longer just for the elite. Anyone can trade and potentially make a great income from it. You just need to know where to begin.
What is forex market trading?
Forex, also known as foreign exchange, FX or currency trading, is a decentralized global market where all the world’s currencies trade. The forex market is the largest, most liquid market in the world with an average daily trading volume exceeding $5 trillion.
Just like stocks, you can trade currency based on what you think its value is (or where it’s headed). But the big difference with forex is that you can trade up or down just as easily. If you think a currency will increase in value, you can buy it. If you think it will decrease, you can sell it. With a market this large, finding a buyer when you’re selling and a seller when you’re buying is much easier than in in other markets.
Trading cryptocurrencies works in the same way, but instead of selling and buying fiat currencies, such as pounds, Yen or US dollars, traders buy and sell cryptocurrencies, such as Bitcoin, Ethereum or Litecoin.
For example, you might bet on the changing price difference between the US dollar and Bitcoin. Or you might bet on the changing values between two different cryptocurrencies, such as by trading a BTC:XRP pair.
If you think bitcoin will increase in value you might “go long” on it. This means betting that it will increase in value relative to the US dollar.
If you think bitcoin will decrease in value you might “short” it instead. This means betting that it will decrease in value relative to the US dollar.
What are the benefits of crypto trading
The US stock market is open from 9:30AM – 4:00 PM EST Monday-Friday. Cryptocurrencies, however, trade 24/7.
This means that cryptocurrencies are easier to day trade for those with daytime jobs. You can trade cryptocurrencies at night after you get off work, in the morning before work, or on the weekends.
Day trading stocks more due to time restrictions
The majority of stocks have much less volatility than cryptocurrencies on a daily/weekly basis. For day traders and short-term swing traders, this crypto market works very well.
Cryptocurrencies like Ethereum move 5%-10%. If you know the right setups to look for, you can find some big moves in a very short period of time to capture in the cryptocurrency markets., especially if you leverage (see section on leverage further down the article).
You don’t need a 4 monitor setup to trade cryptocurrencies as there there is no “market open”. There is no need to be watching 10 cryptocurrencies at once for a move.
Most of cryptocurrency trading can be done on a mobile device. Some exchanges like Binance have a great mobile application and great executions, to support mobile trading.
Should I leverage?
To start trading, you deposit funds into your account. When you have successful trades your account increase. Unsuccessfully trade and the funds in your account decrease.
With leverage, you can magnify your profits and losses.
For example, say you placed a US$10,000 trade on Bitcoin increasing in price, without leverage. If its price increased by 10%, compared to the US dollar, during the trade period your profits would be US$100, minus any trading fees.
But if you traded with 10:1 leverage, your profits would be 10 times that, minus the trading fees.
With cryptos being so volatile this can lead to substantial gains, but also loosing your starting capital should the trade not work out. Stop loses can help minimise the downside. Ultimately leverage is not one for weak hands so tread carefully.
Telegram signals trading channels
If you’re a user of Telegram, you’ll eventually come across
Telegram signals trading groups. These groups do the heavy lifting for you and look for charts, patterns and opportunities to make profit by signalling buy opportunities. Some are free and some are paid. They are worth a look especially if you can find a good one as they can great insights. Like anything in life, some groups are better than others. Check out this great review post if you’re interested in this area: cryptocoindude.com Telegram crypto signals channels.
Want a simpler way to get started crypto trading?
If you looking for simpler way to get involved in trading, why not try eToro’s copy trading which is a great option.
eToro has pioneered the concept of Copy Trading, which enables you to automatically copy traders of your choosing, replicating what they do in your own accounts. Simply put, it’s trading in financial markets by having other people from around the world doing the trading on your behalf.
On the eToro trading platform’s feed, you can view the basic components that constitute social trading, including: Seeing what other traders are doing in real-time, following the top performers and copying the traders you like.
When logging into eToro, you can immediately notice that this trading platform does not look like any other in online trading today. Complicated charts are presented in a user-friendly way, and parts of the platform look more like a social network than a trading platform.
Only on eToro can you follow other traders and see their recent activity on your watch list – a live trading feed of the people and assets you choose to follow.
Another helpful feature is copy trading (Based on eToro’s patented CopyTrader™ technology). This tool allows you to automatically copy successful traders and open the same positions as they do. In effect, you are building your own people-based portfolio.
This feature is a great solution for those who wish to take part in the online trading industry, but simply don’t have the time to invest or the devotion to start learning financials. You can just copy your favourite traders and benefit from their knowledge and experience.
Want to give this a shot, check it out here and trade like Steve:
Hopefully this post has given you an insight in beginning your journey to becoming a crypto trader. If you liked this post, please share it below!