How to Trade Cryptocurrency Online? A Beginner’s Guide

What is Cryptocurrency Trading?

A cryptocurrency trader uses a contract for difference (CFD) trading account or a crypto exchange account to buy and sell the underlying coins to wager on the price changes of crypto assets. The derivative known as CFD trading enables you to wager on changes in the price of Bitcoin (BTC) without owning the underlying assets.

Trading cryptocurrencies can be complicated, requiring knowledge, and involving several components, just like trading stocks and other financial markets. As the first crypto, Bitcoin entered the market in 2009 and has since dominated the crypto market, having highest market capitalization and adoption. However, a whole industry, comprising of different types of cryptocurrencies has developed over time, and these assets can now be traded for money.

How To Trade Cryptocurrency?

Step 1: Create a Trading Account For Cryptocurrencies

Before learning to trade cryptocurrencies, open an account with a brokerage. Some of the top crypto exchange platforms in the market include Binance, Coinbase, Kraken, OKX, Uphold, eToro, and WeBull. These platforms provide a straightforward user interface and a selection of alternative coins and act as gateways that let users to interact with the complex crypto world.

Like opening an account with a stock brokerage, creating an account with a crypto brokerage requires you to provide personal identification information.

Step 2: Add Money to Your Account

Following registration with a cryptocurrency brokerage or crypto exchange platform, you need to link your bank account. Ideally, cryptocurrency brokerages provided by financial institutions are either wire transfers or debit cards. Research and understand all the payment methods supported by the exchange platforms and choose the one convenient for you. A typical ACH deposit (linked bank account transfer) is the most affordable way to fund your account.

Step 3: Choose a Crypto Asset For Investment

Many crypto traders invest some of their capital in lesser-known altcoins. Small to mid-cap cryptos have a higher upside potential despite being riskier than large-market cap cryptos. Many small altcoins have increased by over 1,000% in recent months, making them attractive investments for risk-takers.

Step 4: Hop On A Trading Strategy To Make Profits

Cryptocurrency trading strategies are similar to that of stocks. Elliott Wave Theory is one of my personal favorites among trading strategies. Since Elliott Wave Theory is centered on the psychology of market sentiment, speculative assets like cryptocurrencies greatly benefit from its application.

Step 5: Take Automated Crypto Trading Into Account

Trading bots put into practice a strategy that will benefit you most, given your investment goals. The ability of automated trading to offer a conservative, neutral, or aggressive approach allows you to quickly make money, hold your coins, or diversify your portfolio.

Think about trading cryptocurrencies actively on some platforms and using automated trading on others.

Step 6: Store Your Cryptocurrency

To access it, you must store your money on the exchange if you actively trade cryptocurrencies. Investing in a cryptocurrency wallet is advised if you plan to hold it for a medium to long period.

There are hardware wallets and software wallets for storing crypto. Both are secure, but hardware wallets offer the highest level of security because they store your crypto on a genuine, offline device. Many investors use the excellent hardware wallet company, Ledger to store their crypto holdings. It offers wallets at reasonable prices and supports almost all widely used cryptocurrencies, which is all you need to protect your coins. There are numerous free software wallet options for iOS, Google Chrome, and Android.

Step 7: Sell Your Cryptocurrency To Make Profits

After buying a cryptocurrency, it is time to keep a track of its market performance and developments of its underlying project. When the price of the cryptocurrency increases under any circumstances, you can exit your trading position and make profits. Crypto bull market season also help you make profits from your crypto investments.