Cryptocurrency trading allows people to make huge incomes from small initial investments. It is possible because of the market’s instability – crypto rates change rapidly and randomly.
It may be a bit of good luck when someone capitalizes on crypto due to the sharp market growth, but with the same success, the market can move in another direction, causing huge losses.
It is crucial to learn crypto trade instead of relying on luck.
How does cryptocurrency work? Let’s see it in this article.
The Essence of Trading
When you purchase and sell crypto, catching the wave of the market trends changes, you take profit from price differences.
Again, that has nothing to do with luck. Trading is all about long and tedious work. It requires a combination of education and practice.
Theoretical knowledge will help you understand how this or what strategy works, and training will allow you to handle trading techniques.
Strategies vary by timing. Some trading styles require quick decision-making and frequent opening and closing positions (like scalping and intraday trading).
Other strategies give a trader a long time to think and, thus, are less stressful (buy and hold and swing strategies).
Before starting trading, here are things to know:
- Do your own research. Read about technician and fundamental analysis and try to make them on your own. It will give you a clear picture of the current market situation and every specific crypto project.
- Study trading strategies and pick the one suitable for you today. Over time, try more advanced strategies. Do not rush to use the most difficult trading style.
- Learn how to apply trading bots.
- Diversify your portfolio – buy popular coins and little-known but promising assets (based on the results of your research).
- Learn about a specific project as much as possible – its roadmap, white paper, social networks, etc.
- Do not let emotions like fear, greed, and doubts change your plans. If it is difficult, pick those assets that show stable and flat growth and hold them long-term.
- Assess risks. Do not invest more than you can afford to lose. Otherwise, your trading will be stressful, and (read the previous paragraph) emotions will guide you.
- Use a reliable crypto platform for trading.
A worthy crypto exchange that will help you to get started with trading is WhiteBIT. It is safe and protected. It has an easy-to-handle interface and quality customer support operating 24/7.
You can also try demo trading on WhiteBIT to understand how it works and try all the tools without fear of losing real money.