As of Q1 2023, there are over 400 million cryptocurrency users worldwide!
If you’ve been trying to make it as a cryptocurrency investor, there’s never been a better time than the present. As Bitcoin and other cryptocurrencies rise in price, you want to jump in as fast as possible.
But how do you get started? How do you make sure you succeed with crypto trading?
This guide will show you how to start trading cryptocurrency and how to succeed with your investments.
Here’s what you must know:
Understand What Cryptocurrencies Are for
When it comes to different cryptocurrencies, you have to understand their purpose. You must first distinguish between Bitcoin and altcoins. The latter refers to all cryptocurrencies apart from Bitcoin.
Among the different types of cryptocurrency, Bitcoin is the only one that isn’t controlled by a company. This means that the programming and source code for Bitcoin can’t be changed.
This means that Bitcoin offers more stability than altcoins. For example, there can only ever be 21 million Bitcoins. The code can’t be changed to increase this amount. This means that Bitcoin retains its value.
Bitcoin is also seen as a replacement for fiat currencies. In some countries, such as Venezuela, Bitcoin has become the currency for everyday transactions.
Altcoins can serve a variety of purposes. Some are used as money such as Bitcoin Cash. Others, such as Ether are used to buy, sell, and trade NFTs. Make sure you do your research before you decide which cryptocurrencies you wish to invest in.
Learn About Protecting Your Cryptocurrencies
Your next step is to learn how to protect your cryptocurrencies from theft and how to recover them.
You may want to study the tutorials from The Crypto Merchant on how to protect your cryptocurrencies in hardware wallets. But we’ll go over some of the basics that you should know.
While there are many ways to store your cryptocurrencies, a hardware wallet is your best bet. This is a small device that you can buy and carry along on your travels.
Make sure you never lose your hardware wallet. Doing so can cause you to lose your cryptocurrencies. Using only your hardware wallet, you can make trades with cryptocurrencies.
Now let’s look into how to start trading cryptocurrency!
Choose Your Strategies
The first step once you’ve accumulated cryptocurrencies is to decide on your trading strategy.
The easiest strategy for beginners is to sell once the price skyrockets. But with the volatility of the cryptocurrency market, this is easier said than done!
You need to research the trends in the market. For example, let’s say you wish to trade in Bitcoin. You might have heard a prediction about the price skyrocketing soon.
Make sure you check the source of the prediction before you hurry to trade your Bitcoin. For example, Balaji Sreenivasan made a prediction that Bitcoin would reach $1 million per token soon.
While we have no idea whether it’ll get this high, he is an expert in this industry. His statements are to be observed rather than immediately dismissed.
Another strategy is to buy altcoins and then trade them for more powerful altcoins or Bitcoin. With this strategy, you’ll focus on buying the cheapest altcoins. You’ll then wait for other altcoins and Bitcoin to drop in price.
At that moment, you’ll make the trade. With this strategy, you have to keep a watchful eye on the prices at all times. You need to make a trade fast before the prices rise once again!
Make sure you take your time to research the different strategies that are possible. As a beginner, you want to focus on one strategy. Master one strategy and earn a great profit from it first. Afterward, you can experiment with other strategies.
Ensuring Financial Stability
As you’ve seen so far, there are many benefits of cryptocurrency but many downsides as well.
You must ensure that you have financial stability before you begin cryptocurrency trading. It’s always wise to consult your financial advisor before you begin trading.
You want to set aside cash each month to buy cryptocurrency. Since the market is volatile, you must only invest what you’re willing to lose. You must hope for the best but expect the worst.
If you’ve been making significant losses, you should take a break from buying cryptocurrency. Focus on remaining financially stable at first. You want to slowly build your skills until you master cryptocurrency trading.
Now let’s end with a few remaining practices if you want to master cryptocurrency trading.
You want to set aside time to trade at least once per week. Make sure you dedicate your time to trade and that you don’t have distractions. If you live with others, ask them not to disturb you while you’re trading.
You have to ensure you have the fastest internet connection possible. For example, 50 megabytes per second is sufficient for most of us.
However, a trade can occur or get delayed over a split second. If you can upgrade to 1 gigabyte per second, do so!
Dedicate a few hours each week to study cryptocurrencies. You have to keep up with the latest market trends. You also need to understand the local laws regarding cryptocurrency.
This can help you make better decisions with trading. For example, let’s say Bitcoin is taxed in your state. This might cause the price to fall.
Likewise, Ethereum’s partnership with the World Economic Forum might increase or decrease its adoption.
Follow these best practices and you’ll have no problem succeeding with cryptocurrency trading.
That’s How to Start Trading Cryptocurrency
Now you know how to start trading cryptocurrency and make a lucrative income from it.
Your first step should be to research Bitcoin and altcoins. Understand their purpose and their adoption level. This will help you decide which cryptocurrencies to invest in.
The next step is to invest in a hardware wallet. Research online tutorials on how to protect your cryptocurrencies.
Research different strategies until you decide which one works best for you. Use our best practices to succeed with cryptocurrency trading in the long run.
You can find more articles about cryptocurrencies on our website!