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Cryptocurrency trading is trending, and why not! Crypto has disrupted the financial sector, and the volatility of the Bitcoin price and that of other cryptocurrencies provides a good avenue for investment. Joining in on the trend can let you capitalize on the various opportunities and potentially make a profit.
However, trading is often a confusing world for beginners. If you’d like to get started, we’ll give you an overview of the process below.
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Learn as Much as You Can
To get started on your crypto trading journey, the initial and crucial step is learning everything you can about the field. Take the time to understand the fundamentals of cryptocurrencies and the underlying blockchain technology. Familiarize yourself with the diverse range of digital currencies, the factors that influence their prices, and the key players in the crypto ecosystem.
Additionally, learn about the various trading strategies and the risks associated with this dynamic market. Armed with this comprehensive understanding, you’ll be empowered to make well-informed decisions.
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Choose a Crypto Exchange
Now that you have conversant with the pillars of crypto trading, it’s time to move on to the next crucial step – selecting a crypto exchange. The exchange serves as the platform through which you can seamlessly convert your cryptocurrencies into other digital coins or traditional fiat currency.
Since you are just starting out, consider opting for renowned exchanges that have garnered popularity and trust within the crypto community. Some well-established options you can go for are Binance, CoinBase, Kraken, and KuCoin. To select one that fits your needs, compare them using the exchange fees charged, the security offered, supported coins, payment methods, and ease of use.
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Fund your Account
Of course you will need funds to place a trade. And now that you have a crypto exchange, you can get into it. Depending on your crypto exchange, you can deposit funds using a direct bank transfer. There’s also an option of using your credit/debit card and PayPal. If you’ve already ventured into crypto and have some coins in your wallet, you can also transfer them to the exchange. Note that different payment methods have different charges.
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Pick a Crypto to Invest In
You probably already have a coin in mind that you want to invest in. There are many of them, but as a beginner, it’s advisable that you invest in major coins, as they have stood the test of time. However, you’ll also need to diversify a bit, so consider having two to four coins. Ensure you do proper research and analysis for each before selection.
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Choose a Trading Strategy
Trading is all about strategies, and you’ll need one or a few to guide you. Having it will help you decide when to invest, how, and for how long. It will also help you manage your risks. To get started, decide whether your trades will be short-term (day trading, swing trading) or long-term (position trading, investing). You can then research the different strategies and trading styles that apply to your type of trading. But whichever strategy you use, remember to implement risk management techniques such as stop-loss orders.
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Place a Trade
You are now are the exciting stage of placing your first trade. To get started, you can select a trading pair, which is basically the two cryptos you’d like to trade. From there, apply the strategies you came up with during your research. You can also consider using automated trading.
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Monitor & Learn
Immediately after placing your trade, you will need to start monitoring it. You can do this by keeping an eye on the market conditions and any relevant news that may affect the prices in your trade. From there, you can regularly review your past trades to look for patterns and analyze the effectiveness of your trading strategies. Remember that becoming an expert trader will take you months or years, but continually improving your behaviors, styles, and strategies will get you there.
