Do you want to learn how to trade cryptocurrencies like a pro? Well, most people do, and for a good reason.
Digital assets are now a hot topic in the news and the financial world. The crypto and blockchain revolution is transforming almost all the industrial sectors. Cryptocurrencies investments are minting new millionaires every day.
Like the notorious advertising, spot said many years ago, "you can quote it, disagree with it, glorify or vilify it, but the one thing you can't do is ignore it because it changes things."
Digital assets are the future, but you must understand how to make money trading cryptocurrency to succeed.
This cryptocurrency trading guide will teach you the best way to trade cryptocurrency and the best platforms to use. Keep reading!
Trading cryptocurrencies is the act of opening a financial position to make profits between the opening and closing prices.
You can use technical analysis or news to analyze and identify the ideal time to trade crypto. Whether you want to speculate the price of cryptocurrencies or purchase Spot crypto assets, you should pay attention to the value, volatility, liquidity, and risk associated.
There are numerous strategies to trade cryptocurrencies. But what's the best plan for everybody? As you know, there is no grail or secret sauce when investing. It requires hard work and hours of practice.
That said, there are three components for every trading operation: Liquidity, volatility, and volume. Finding the right strategy involves combining these critical factors.
Meanwhile, let's talk about three popular techniques in cryptocurrencies.
■ Day trading cryptocurrency
A day trader is a person who opens positions and closes them within the same day. So, day trading crypto doesn't involve overnight cryptocurrency trades. You can use different timeframes, but the principal characteristic is that trades run for a few hours.
You watch for volatility and short-term movements such as breakouts, scalping, or reversals when day trading. It offers a relatively high return ratio, but it involves riskier bets.
■ Crypto swing trading
Swing trading is a technique that involves short to middle-term investments. It is designed to make profits from extended movements or trends. Remember, the trend is your friend.
In cryptocurrencies, swing trading involves positions that last between two days and two weeks. However, you can hold the positions for months. As a swing trader, you always watch out for pullbacks, resistance, and support levels.
■ Long-term HODL in cryptocurrencies
As the crypto market is relatively young, most movements are violent. The brokers, traders, and the whole industry, in general, are still developing. For that reason, many experts don't trade cryptos as a long-term investment.
However, if you believe in blockchain and cryptocurrencies, you can find good trading opportunities whether BTC/USD is trading at 1,000 or 10,000 per unit. So, go ahead and invest in cryptos.
Long-term strategies in cryptocurrencies involve trends that develop in bigger timeframes, such as daily, weekly, and monthly charts. Swing trading is also part of the long-term trading strategy. For example, take a trend and wait for it to develop until exhaustion.
Trade reversals when the trend ends. Technical indicators such as volume, moving averages, and divergences can help determine when one trend is ending and another is forming.
Understanding how to make money while trading in cryptocurrencies is not complex, but making a buck in the real market is a different story altogether. But with sufficient know-how and practice, you can join the league of profitable traders. Here are essential things you should know when buying or selling cryptocurrencies.
Going long in a position is buying an instrument when you think the price will go up, hoping to sell at a more significant profit. In this case, you make money from the difference between the opening and closing prices: Buy cheap and sell expensive.
Going short is the complete opposite of going long. A short position is when you sell an asset hoping you will buy it cheaper. You believe the price will go down. So, as a trader, you will make money with the difference between buying and selling cryptocurrency.
A classic sample of making money with cryptocurrencies is what happened in 2017 and 2018. Let's assume you were an early Bitcoin adopter, and you bought BTCs in January 2017 because you felt cryptos were the future.
Then, the crypto king became popular, proliferating to a four-digit rally. It grew from $1,000 per BTC to close at $19,000 in December, making an incredible 1,870% profit.
After all the fuss, Bitcoin started losing value, and you decided to open a short position in January 2018. The coin plunged from $16,000 to $3,700 in February 2019, making a decent 76% profit in just a year.
It is imperative that traders follow all developments in the crypto market. Therefore, you must choose a platform that shows price fluctuations and enables you to track the impact of news events on cryptocurrencies.
So, what is the best cryptocurrency trading platform?
Well, it all depends on your needs and skills as a trader. However, a good platform should have low fees and no premiums on withdrawal or deposits. Additionally, it should be easy to use and provide demo accounts to all new and existing clients. What's more, users should enjoy a network with low latency and fast execution.
You will agree that safeguarding your money is perhaps the most important thing. A suitable broker should be well regulated in at least one of the advanced financial economies, including the US, Europe, Australia, Switzerland, and Japan.
This is where Mitrade comes in handy. It is a leading trading platform, especially in trading cryptocurrencies on margin.
Mitrade is an ASIC-regulated Forex broker. It provides the hottest global trading instruments. You can trade over 300 markets with 0 commission and low spreads.
Mitrade provides reasonable leverage based on different trading instruments (crypto 1:2, Gold 1:20, major forex 1:30). It also protects you against negative balances, allowing you to control the trading risk. You, therefore, maintain peace of mind as you trade.
Why Choose Mitrade?
✅ Competitive Fee, 24-hour Trading
Zero commissions, low overnight fees, and competitive and transparent spreads. All costs will show on your deals order.
✅ Low Deposit with Leverage
The minimum size per trade is as low as 0.01 lots. Leverage up to 30:1.
✅ Trade Anytime Anywhere
You will enjoy seamless trading via a web platform and iOS and Android mobile apps.
✅ Good liquidity, efficient and convenient
Trade 24 hours/day with more flexibility and efficiency.
Well, Mitrade is a well-established and regulated broker and trading platform. You can start your account with just a few bucks at zero commissions and competitive spreads.
Finally, you don't have to worry about cryptocurrency ownership or wallet security. This is because you don't hold any assets in your account. Instead, you trade and make money from the price difference between the opening and closing price.
That said, you don't want to be an average trader who loses all his money after three months. You want to be a successful investor who can identify opportunities and place trades in a platform that enhances your trading skills.
Try and test the platform and then go live. Go for it!
To start trading Bitcoin with margin, follow these steps:
Step1: Create an account online (choose demo or live account)
Step2：Search the markets you want to trade, such as Bitcoin (BTCUSD)
Step3：Open a long or short position (seize the market opportunity when the prices rise or drop)
Step4：Set up your order, take profit, stop-loss, etc.
Step5：Confirm the trade
- place a BTCUSD order on mitrade -
Here are top markets you can trade on Mitrade:
Popular cryptos: Bitcoin, Ethereum, Ripple, Doge, Cardona, SOL, etc.
Popular Forex: EUR/USD, GBP/USD, USD/CAD, AUD/USD, USD/JPY, and others.
Popular Indices: EU50/ FR40/ NAS100/ AUS200/ US30/ UK100/ HK50 and others.
Popular Commodities： XAUUSD, XAGUSD, WTI, Brent, GAS, and others.
Popular Shares: AAPL, GOOG, AMZN, TSLA, FB, NFLX, NIO, ASX.AU, and more.
*76% of retail CFD accounts lose money.
Before delving into the basics of a cryptocurrency chart, here is something noteworthy.
The best way to learn and understand charts is by practicing. Leading trading platforms offer demo accounts to all its potential and existing users to test their strategies and familiarize themselves with the software.
Now let's explore crucial forex components, including candlesticks, open, short, and price fluctuations.
Candles: Each bar you see in the chart represents a timeframe unit. If you are trading a 1-hour chart, each candle represents one hour. The same applies if you watch a 15-minute frame; every candle shows the performance in 15 minutes.
Red candles are considered drops in prices, while green candles represent an increase in value.
- EURUSD price chart from Mitrade -
Technical indicators: tools that help analyze the market and improve your trading performance. You can add the statistical studies to your chart from the library in your platform.
Long position: To open a long position, click the buy box and choose all the necessary details.
Short positions: To go short, click on the sell box and verify the information. You can see in the picture that you go short when you believe the price will decrease.
A candlestick chart is a chart built with candles. It is a visual tool that follows price fluctuations and is among the most popular chart types in the cryptocurrency market.
A red candle shows the price is going down, while a green candle appears when the price goes up. The tails represent extreme prices during that period.
The body shows the difference between the opening and closing prices. Please see our Candlestick article if you want to know more about this kind of chart.
Volatility in the crypto market is the drums in a song, the heart in a body, and the gas of your car. It powers the market and provides you with unlimited possibilities to go long or short.
This means, despite the wild movements, volatility is good. However, it comes with a high possibility of getting burned and requires a great deal of discipline.
Cryptocurrency never sleeps
The cryptocurrency market is open 24 hours, seven days a week. Also, you don't need to wait for confirmations; crypto transactions are settled in real-time. Additionally, the market is very liquid.
As mentioned, the crypto market has high liquidity and is always open. It offers excellent opportunities to open a trade. More importantly, many cryptocurrencies in the market are tradable with other cryptos and fiat currencies. This means there is a massive amount of cash and many players involved.
New tokens are released every day
New tokens and digital coins are released regularly, meaning new opportunities emerge daily.
Remember, Bitcoin - the pioneer crypto has been around for 12 years. The crypto market is at the infancy stage, and more will come.
Several factors affect the prices of cryptocurrencies. However, market sentiment is the leading cause of digital asset fluctuations.
All new crypto-related news and attempts to regulate existing and new digital assets can cause cryptocurrencies price fluctuations. For instance, every time developed economies make laws about Bitcoin and altcoins, buying or selling pressure increases on the coins.
Forks and creating new tokens from an existing one is always critical for crypto traders. Usually, the cryptocurrency involved in the fork comes under pressure days before and after the event.
There is a technology behind every cryptocurrency and its network. Technology upgrades or changes, and new implementations in the industry, push the price up.
In the investment market, sentiment is everything; it is the base of every economy and the gas that fuels purchases and sales. Cryptocurrencies are not different. A good example is the 2017 rally, when everybody believed it was the beginning of the crypto era. Similarly, a big sale followed in 2018 when people thought it was too soon for a digital token economy.
● Do you pay taxes on cryptocurrency trading?
Yes, you do pay taxes on cryptocurrency trading. However, the taxable regulations are different in each country. We strongly recommend you check the tax rules in your state regarding crypto investments and holdings.
● Which cryptocurrency is best for trading?
Crypto coins that recorded the fastest growth in 2021 include Solana (SOL), Cardano (ADA), Chainlink (LINK), Terra (LUNA), Polkadot (DOT), Dogecoin (DOGE), Shiba Inu (SHIB), and Polygon (MATIC). Bitcoin (BTC) and Ethereum (ETH) are the most traded cryptocurrencies.
● When should you trade cryptocurrency?
You must first learn technical analysis, how to read price charts, and current market trends to know when to buy or trade cryptocurrencies. Additionally, you need to learn some essential indicators such as the Support and Resistance, Moving average (MA), and Bollinger bands.
* The content presented above, whether from a third party or not, is considered as general advice only. This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. *CFD trading carries a high level of risk and is not suitable for all investors. Please read the PDS before choosing to start trading.
Risk Warning: Trading may result in the loss of your entire capital. Trading OTC derivatives may not be suitable for everyone. Please consider our legal disclosure documents before using our services and ensure that you understand the risks involved. You do not own or have any interest in the underlying assets.