When Bitcoin touched $20,000 in late 2017, cryptocurrencies suddenly became all the rage. Everyone was talking about 1000 percent returns and currencies of the future. Traders were making big gains and ‘Initial Coin Offerings’ were the talk of the town.
There’s more to crypto trading than just sky-high returns. Digital assets are the investments of the future and traders must tread with caution. There’s considerable risk associated with crypto trading due to high volatility. The rules and regulations governing crypto are different as per jurisdictions and many countries are still in the process of adopting/legalizing cryptocurrencies.
So, before you jump in to trade in the BTC/USD pair, let’s get to know more about crypto in the first place.
What is Cryptocurrency Trading?
Cryptocurrency trading is just like any other stock, share or forex trading. However, the underlying asset is different – a virtual currency or asset. Unlike the conventional assets, crypto assets are not controlled by any centralized authority – and that’s why investors are loving it.
Even though crypto is a lawful delicate, interest is growing all across the globe. Bitcoin is the most popular cryptocurrency and Ethereum stands next. There are numerous registered crypto exchanges where users can register and simply start trading in crypto.
Also Read: Tips on Cryptocurrency Trading
Fundamental and technical analysis are the same as traditional stock trading. Charting, too, is similar to regular stock trading. However, unlike stocks, cryptocurrencies are more volatile and their inherent value is determined by their use-case scenario or ability to solve a problem.
How to Choose Which Cryptocurrency to Trade
- Know your risk profile – There are more than 2300 different cryptocurrencies right now in the world. Bitcoin, Ethereum, Tether, and Litecoin are some popular options. Higher volatility and liquidity allow traders to exploit profit opportunities. Traders are advised to diversify their investments to minimize risk and strengthen their portfolio.
- Undertake extensive research – Don’t rely on online reviews alone. Take in-depth research that involves fellow traders, market cap, historical performance, liquidity, volumes, and legal status of a coin. Know about the fundamentals, purpose, leadership, and the company behind the cryptocurrency.
- Explore ICO offerings – ‘Initial Coin Offerings’ must be approached with caution. Just like the stock market, focus must be on ‘return-on-investment’ to avoid pitfalls. Investors can enjoy hue returns provided they put money on the right project with a profitable ICO.
- Check out relatively unknown exchanges – Cryptocurrencies are traded on various exchanges and depending on their jurisdiction, the discounts can be huge. Lesser known crypto exchanges are known to offer better value, more pairs and services to customers.
- Be Aware and Vigilant – Crypto is a highly volatile realm with numerous risks. Try not to be swayed by emotions and steer clear of frauds. Always be vigilant about your portfolio. Don’t chase highly lucrative returns and instead focus on building a stable crypto portfolio with diverse assets.
Crypto Trading Tips by Josh Olszewicz
Josh Olszewicz is a Brave New Coin contributor and his YouTube Crypto Trading Tips series is an amazing channel for beginners and expert traders alike. His videos are descriptive, intuitive and self-explanatory.
Also Read: Why Do Bitcoins Have Value?
- Technical indicators and tools – Every trader must learn technical indicators and analysis for understanding charts on a daily basis. From Bollinger Bands to Moving Averages and RSI, his technical analysis helps traders undertake enlightened trades.
- Weekly roundup – Beginners can track his weekly analysis for an in-depth understanding of cryptocurrency movements. His insights on major crypto movements along with altcoin and DeFi helps understand and track where the crypto market is headed.
- Crypto correlation with traditional assets – There’s a growing bonding between cryptocurrencies and traditional assets like gold, stocks and fiat. Josh helps unravel the increasing correlation between various conventional financial assets with cryptocurrencies.
Cryptocurrency Trading Tools Guide
Tools are vital to every technical trader. There’s nothing like the good ole’ technical data with specific indicators for day trading and hourly scalping. Maintaining the right technical tools arsenal is crucial to every trader’s success.
- HollaEx allows traders to setup custom warning pop ups once price touches predetermined level or beyond the pre-set amount. Phemex is ideal for setting up orders called ‘One-Cancels-the-Other’ where traders can preserve their capital against a volatile market and book profits.
- Strategy alerts feature in Bybit allows traders to safeguard their wealth through custom strategies from the experts. Market events can be timed better with Bybit along with specific price alerts.
- Trading bots are popular as they help implement your trading strategies with great accuracy. Shrimpy not only helps with day trading but also manages your portfolio as per market movements.
- HaasOnline is another great trading bot with advanced AI features allowing traders to implement complex algorithmic trading. Pre-built bots can further customize your trading strategy in a live environment.
- Diligently study best crypto signals. The most vital advantage of a crypto signal is maximizing profits and managing various assets.
- TradingView is ideal for technical charting and analysis. It allows for deeper market insights along with in-depth technical study. Combine it with a good news aggregator to track the crypto market in real-time.
Cryptocurrency Trading Tips for Beginners
There’s more to cryptocurrencies than just outrageous returns. Beginners must understand the realities of the crypto industry instead of jumping right in expecting high returns. If you are about to start in the crypto trading realm, here are some ground realities you should know.
- Learn about cryptocurrencies – It is crucial that you know every what and how of cryptocurrencies. As futuristic as they may sound, crypto is another financial instrument albeit with a difference. Know the history, purpose, workings and reason behind coins. Only then can you approach crypto trading the right way.
- Don’t risk everything – Begin your trading with a small amount – as much as you are willing to lose. Stop expecting huge returns at the start and learn to trade in minute amounts. Crypto is highly volatile and chasing outrageous returns can quickly bankrupt you. Remember, never risk your personal finance.
- Diversify – Go beyond crypto and explore other investment opportunities. Check out ICOs, DeFi, alternate finance and more. Read more about stablecoins to know what’s right for you.
- Deploy smart software – Don’t just rely on your knowledge but also use smart software to aid you in trading. Set your own goals but to involve technical analysis from smart software to boost your chances.
Industry Remains Optimistic On Cryptocurrencies
Regulations are transient and the future of crypto in India is bright. Other countries faced similar hurdles in their initial days. Once regulatory provisions are in place, authorities are going to be more compliant. That’s why there’s a budding ecosystem of crypto tools, exchanges and products currently under development.
Also Read: Stop Being an Aggressive Trader
- As crypto was about to pick up pace in India, the Reserve Bank of India decided to play spoilsport. The 2018 ban on cryptocurrency trading was widely criticised both in and out of the country. The budding ecosystem took a big hit and even today the crypto industry’s enthusiasm is somewhat muted.
- The cryptocurrency industry in India is still at a nascent stage and that’s where the opportunity lies. Traders are looking for opportunities and exchanges are working overtime to build their client base. The growing ecosystem now supports a wide range of trading products and crypto portfolio management.
- Once you are ready to start trading, it’s time to take the first step – register with an exchange or broker. There’s no better teacher than live trading and testing your strategies.
The following takeaways are clear after you’ve gone through this cryptocurrency trading guide:
- High crypto returns are real but chasing high returns without the proper understanding of the market won’t go too far.
- Besides trading, there’s a huge realm of crypto investing which involves next-gen digital assets for long-term portfolio goals. The growing correlation with traditional stock markets is further increasing scope of crypto assets.
- Take the plunge into crypto once you understand the risks and weight in your portfolio well.
- Take the help of professional tools along with a selection of online learning material.
Craft your own crypto trading strategies with a focus on building a robust crypto trading and investment portfolio. Happy trading!