How to Start Crypto Trading for Beginners - Choosing Crypto (2024)

Are you interested in how to start crypto trading for beginners but feeling a bit overwhelmed?

Don’t worry, I’ve got your back!

In this comprehensive guide, I’ll take you on an exciting journey into the world of crypto trading, even if you’re just starting out.

Whether you’re looking to earn some extra cash, explore new investment opportunities, or simply feed your curiosity about crypto trading, this blog post is tailored just for you!

Imagine this: You’re at home, sipping your favorite beverage, and making money with just a few clicks. Sounds tempting, right?

That’s the allure of crypto trading, where the possibilities are endless, and you can potentially build your wealth.

But let’s be real – cryptocurrencies can seem confusing at first glance.

But fear not because I’m here to demystify crypto trading straightforwardly.

You’ll discover the secrets of crypto trading, and I’ll explain complex ideas using simple comparisons and offer practical tips to help you succeed.

But here’s the deal – crypto trading isn’t a magical get-rich-quick scheme. It requires dedication, patience, and a thirst for knowledge.

Don’t worry, though, because I’ll be right by your side, guiding you through every step of the process.

What is Crypto Trading

Crypto trading is like buying and selling cryptocurrencies, hoping to make some money from it. It’s a bit like playing the stock market but with virtual coins instead.

Here’s how it works:

People who do crypto trading try to guess which way the prices of these cryptocurrencies will go. You know, sometimes they go up and sometimes down.

Traders want to buy the coins when they’re cheap and sell them when they’re more expensive to make a profit.

They do all this on special websites calledcrypto exchanges, which are like online marketplaces for cryptocurrencies.

Now, traders have a bunch of tricks up their sleeves to figure out where the prices are headed.

Some folks look at thefundamental analysis, which focuses on evaluating the underlying factors that can impact the value of crypto. Others are more intotechnical analysis, which involves studying price charts, patterns, and indicators to identify trends and trading opportunities.

And when it comes to making trades, there are a few different ways to do it.

Some people go for “spot trading,” where you buy or sell coins right away at the current price. Others like “margin trading,” where you can borrow some extra money to make your trades bigger (but be careful, this can also mean bigger losses).

Finally, there’s “futures trading,” where you agree to buy or sell coins at a set price on a future date.

So, in a nutshell, crypto trading is all about trying to make some money by guessing where the prices of cryptocurrencies will go, and you can do it on websites made just for that.

Just remember, it’s not a guaranteed way to get rich, and it’s important to do your homework before jumping in.

Crypto Investing vs. Crypto Trading

Let’s talk about two ways to handle cryptocurrencies: investing and trading.

They’re like cousins, but they have different goals and timeframes.

Investingis like planting a money tree and waiting for it to grow. You buy some coins and hang on to them for a while, like months or even years. You don’t get bothered by the daily ups and downs in the market. The big picture here is to see your initial investment grow as the coin’s price goes up. So, more coins can equal more money when you eventually sell them.

Trading, on the other hand, is more like a quick game. You’re in it for the short term, maybe from a few seconds to a few weeks. Here, the goal is to make quick profits by buying low and selling high. You need to keep a close eye on the market because it changes fast. If you can time it right and the trends go your way, you can make a good profit. But you’ll be trading coins frequently.

Now, what’s the better choice?

Well, both investing and trading aim to make you money, but they have different timeframes.

Investing takes a longer view, while trading is faster. It’s like planting a tree versus playing a game of chess.

Your choice depends on how patient you are and how much time you can spend watching the market.

Investorsare like long-term thinkers, hoping their investments will grow over time.

Tradersare more like short-term strategists, looking to cash in on quick moves.

It’s all about what suits your style and goals.

So, whether you’re into planting trees or playing chess, the ultimate goal is the same: making money.

Just remember, with investing, it’s a marathon, and with trading, it’s a sprint!”

Getting Started with Crypto Trading as a Beginner

Now that you’ve got the basic idea of crypto trading, it’s time to dive in and start your journey into trading.

I’m here to guide you every step of the way to make sure you feel comfortable throughout.

1. Choosing the Right Exchange

Crypto exchanges are online places where you can buy, sell, and trade different cryptocurrencies, but not all exchanges are the same, so it’s crucial to pick the right one.

Things to think about include how easy it is to use, security features, what cryptocurrencies are available, and the fees they charge.

As a beginner, you’ll want an exchange that’s simple to navigate and gives you clear instructions for trading.

Read Also: How to Choose the Right Crypto Exchange

2.Creating Your Crypto Exchange Account

To get started, you’ll need an account on a crypto exchange.

Here’s a simple breakdown of how to do it:

• Choose a trustworthy exchange: Go for well-known options likeBinance,Bybit, orGate.io, which are beginner-friendly.
• Sign up: Make an account by providing your email address, a strong password, and any other info they ask for.
• Verify your identity: Be ready to complete a “Know Your Customer” (KYC) process, which usually means sharing a picture of your ID and maybe a selfie.

3. Keeping Your Account Safe

With your exchange account all set up, the next important step is to keep it safe and sound.

Crypto exchanges can be tempting targets for hackers, so protecting your account is a must:

• Use Two-Factor Authentication (2FA): This adds an extra layer of security, usually with a one-time code sent to your phone or email.
• Use a strong, unique password: Stay away from easy-to-guess passwords, and think about using a password manager to keep them secure.

Read Also: How to Protect Your Cryptocurrencies From Being Stolen

4. Adding Money to Your Account

Now that your account is ready, it’s time to put some money in it.

Here’s how:

• Head to the ‘Deposit’ or ‘Funds’ section of your chosen exchange.
• Choose your preferred way to deposit money, usually through a bank transfer or credit card.
• Follow the instructions to move your money into your exchange account.

Congrats!

You’re now all set to start swapping your hard-earned money for cryptocurrencies.

Just remember, as a beginner, it’s essential to take your time and start with a small amount of money that won’t hurt your wallet too much if it doesn’t go well.

Why? Well, think of it like this: When you’re new to the game, you’re basically in a learning mode. And as you learn, you might make some mistakes or face losses – it happens to the best of us.

So, consider that small amount of money you’re putting in as your learning fee. You know, like how you pay a little something to take a class or learn a new skill.

It’s the cost of getting familiar with the ropes, and as you gain experience, you can start to invest more confidently.

Read Also: How to Buy Cryptocurrencies for The First Time

Understanding Market Basics

If you’re just starting out in the world of crypto trading, let’s break down some important things you need to know in simple language.

These fundamentals will help you make smarter decisions and feel more at ease as you explore the trading scene.

1. Cryptocurrency Pairs

In cryptocurrency trading, you’ll often come across something called “trading pairs.”

Think of these as duos of cryptocurrencies, like Bitcoin (BTC) and Ethereum (ETH).

When you trade, you’re either swapping one cryptocurrency for another.

For example, if you see BTC/USDT, you can either trade your BTC for USDT or the other way around.

Read More: What are Trading Pairs in Cryptocurrency

2. Market Orders vs. Limit Orders

It’s important to understand the difference between “market orders” and “limit orders.”

These are like your tools for trading:

• Market Order: This is the easy one. It means you want to buy or sell a cryptocurrency at its current price. These orders happen super quickly but keep in mind that the price might change a bit while the trade goes through.
• Limit Order: With a limit order, you get to pick the exact price you want to buy or sell a cryptocurrency. But here’s the catch: your order will only go through if the market reaches that specific price. It gives you more control, but it might not be instant.

3. Price Charts

Price charts are like maps in the world of crypto trading. They show you how the price of a cryptocurrency has moved over time.

The most common type of chart is the “candlestick chart.”

These are basically colorful bars that reveal the opening, closing, highest, and lowest prices over a set period (like an hour or a day).

Green or white candles mean prices went up, and red or black ones mean they went down.

Learning these basics is like understanding the rules of a new game.

The more you get the hang of it, the better you can plan your moves and explore the cryptocurrency trading world.

Read Also: How to Read a Crypto Candlestick Chart Like a Pro

Developing a Crypto Trading Strategy

Now that you’ve got the basics of how the cryptocurrency market works, it’s time to start thinking about your own plan.

This plan will be tailored to your own goals and how comfortable you are with taking risks.

A smart strategy can help you make wise choices and avoid common mistakes when trading cryptocurrencies.

Let’s break it down step by step:

1. Deciding to HODL or Trade

Before we get into the nitty-gritty of your strategy, you need to decide if you want to be a HODLer or a trader.

Here’s what that means:

• HODLing: It’s just a silly way of saying “hold.” HODLers buy cryptocurrencies and hold onto them for a long time, hoping their value will go up over the years. It’s not very stressful, but it does require patience.
• Trading: If you’re a trader, you’re trying to make money from short-term changes in prices. You buy low and sell high, which might mean making lots of trades. This approach can be riskier, but it could also bring in quicker rewards.

2. Managing Your Risks

No matter which path you choose, you’ve got to be smart about handling risks.

Here are some important things to think about:

• Diversification: Don’t put all your money into just one type of cryptocurrency. Spread your investments across different ones to reduce your risk.
• Stop-Loss Orders: This is like setting a safety net. You tell the system to sell your cryptocurrency if its price starts to drop too much. This helps you avoid big losses.
• Risk Percentage: Decide how much of your total money you’re willing to risk on a single trade. A good rule of thumb is not to risk more than 2% of all your money on one trade.

Related:

• The Importance of Risk Management in Crypto Trading
• Understanding Stop Loss and Take Profit Orders in Crypto

3. Research and Analysis

Before you make any moves, do some research:

• Fundamental Analysis: This is like learning the background of a cryptocurrency. You study things like the technology behind it, the team involved, and what it’s used for. You also look at what could affect its value.
• Technical Analysis: This is about studying price charts and patterns. You try to spot trends, support (where prices tend not to go below), and resistance (where prices tend not to go above) levels. All of this helps you make informed decisions.

Related:

• The Role of Fundamental Analysis in Crypto Trading
• The Importance of Technical Analysis in Crypto Trading

4. Making a Trading Plan

Think of a trading plan as your GPS in the crypto world.

It should include:

• Entry and Exit Strategies: You need to decide what conditions will make you start or stop a trade. For example, you might decide to sell when you’ve made a certain amount of profit or if the price drops to a certain level.
• Risk-Reward Ratio: This is about figuring out how much you expect to make compared to how much you could lose.
• Emotional Discipline: Sticking to your plan is important. Don’t let fear or greed push you into making quick decisions that might not be smart.

As a beginner, it’s a good idea to start with a simple plan and adjust it as you learn more.

Remember, the crypto market can be very unpredictable, so never invest more than you can afford to lose.

Making Your First Crypto Trade

Congratulations on reaching this exciting milestone! You’re about to take your first step into the world of cryptocurrency trading, and we’re here to guide you through it.

Let’s get started:

1. Placing Your First Trade

So, it’s time to make your first crypto trade.

Here’s a simple, step-by-step guide:

– Login: Start by logging into your chosen crypto exchange using the credentials you set up when you created your account.

– Find the Trading Platform: Look for the ‘Trading’ or ‘Exchange’ section on the exchange’s website or app.

– Pick Your Trading Pair: Choose the two cryptocurrencies you want to trade. For beginners, it’s a good idea to start with popular pairs like Bitcoin (BTC) against US dollars (USD) or Ethereum (ETH) against US dollars (USD).

– Choose Your Order Type: You have two options here: a market order or a limit order. If you want to trade right away, go for a market order. If you prefer more control over the price, go with a limit order.

– Set the Amount: Enter how much of the crypto you want to buy or sell. Make sure this fits with your risk management plan.

– Review Your Order: Double-check everything, like the amount and order type, to make sure it’s all correct.

– Place Your Order: Once you’re happy with everything, click ‘Buy’ or ‘Sell’ to place your order. If it’s a market order, it’ll be done almost instantly at the current market price. If it’s a limit order, it will be executed when the market reaches the price you specified.

2. Monitoring Your Trade

Now that your order is in, you’ll want to keep an eye on how it’s doing.

Here’s how:

– Use the Exchange’s Portfolio or Balance Section: This is where you can see how your holdings are doing.

– Watch the Price Chart: Keep an eye on the cryptocurrency’s price to see if your trade is going up or down.

– Set Alerts: Some exchanges have a feature that lets you know when the price reaches a certain level.

Read Also: How to Get Crypto Price Alerts

3. Common Mistakes to Avoid

As a beginner, you’ll want to avoid some common blunders:

– Emotional Trading: Don’t let fear or greed push you into making hasty decisions. Stick to your plan.

– Overtrading: Don’t jump into too many trades at once. Start with a few and build your experience gradually.

– Not Managing Risks:Things like setting “stop-loss” orders (to limit your losses) and controlling the size of your trades are crucial. Protect your money at all costs.

-Chasing Hype and FOMO: FOMO, or the fear of missing out, can make you buy when prices are sky-high. Try to stay calm and enter trades at sensible prices.

– Trading Without a Plan:Trading without a clear strategy is like gambling. Always have a plan before you make a trade.

– Not Learning from Mistakes:Mistakes are part of the game. Learn from them and get better.

Remember, your first trade is a learning experience. If it doesn’t go exactly as planned, don’t be discouraged.

Learning from both successes and mistakes is all part of the journey.

As you gain more experience, you can refine your strategy and try different trading pairs.

For now, take it step by step, stay patient, and keep yourself informed about the market.

Conclusion

You’ve got a solid foundation now, and you’re all set to dive into the exciting world of trading crypto.

Even though it might seem a bit daunting at first, don’t worry. With the right knowledge, mindset, and dedication, you can definitely find success in crypto trading.

As we wrap up this guide, let’s go over the important points that will help you become a successful crypto trader.

First things first, pick a crypto exchange that’s trustworthy and easy to use.

Think of exchanges likeBinance,Bybit, orGate.io. Choosing the right one can make a big difference in terms of keeping your investments safe, making trading easy, and saving on fees.

And when it comes to trading, always have a strategy in mind.

Here’s a crucial tip: patience and discipline are your best buddies in crypto trading. It’s better to make carefully considered decisions instead of jumping into things without thinking them through just because you’re feeling emotional.

Additional Resources

To help you get better with Bitcoin and cryptocurrencies we have prepared additional resources below which we believe you will find helpful.

But before you check them out, kindly visit ourInstagramandTwitter(X)pages, to join us for more content.

Additional Resources:

• 5 Top Indicators for Successful Crypto Trading
• How to Avoid Losses in Crypto Trading
• The Importance of Backtesting in Crypto Trading
• Best Tools Successful Traders Use When Trading Crypto
• 5 Common Crypto Scams and How to Avoid Them
• The Psychology of Crypto Trading
• Understanding Support and Resistance in Crypto Trading

IMPORTANT;you must never send money to anyone you meet online asking to help you invest in cryptocurrency. They are scammers. Crypto is easy, and you can do it all by yourself.

DISCLAIMER:

The information presented here should not be used as the sole basis of any investment decisions, nor should it be construed as financial, tax, legal, or accounting advice. I will also advise that you invest in cryptocurrency only what you are comfortable living without, at least temporarily.

[READ: Safest Stablecoins to Use in Crypto Trading]