HOW TO TRADE CRYPTOCURRENCY ON THE EXCHANGE: STRATEGIES FOR BEGINNERS
Trading cryptocurrencies is a good opportunity to make money from changes in the exchange rate of the value of the asset. The volatility of virtual coins remains quite high, exchange rate fluctuations can be several percent per day, which means that you can make good profits thanks to this. You can trade cryptocurrencies on cryptocurrency exchanges, P2P exchanges and brokerage platforms. The principle of trading, the formation of buy or sell orders is basically the same on all exchanges.
WHAT ARE CRYPTOCURRENCY EXCHANGES
Cryptocurrency exchanges (cryptocurrency) are sites that provide cryptocurrency trading services. There are still no official and regulated cryptocurrency platforms, so cryptocurrency exchanges remain the only place to trade. Only on this site https://wellcrypto.io/ you can find out quickly and with minimal commissions make large transactions on cryptocurrencies (exchange/buy/sell). There is enough liquidity here even for those who have millions of dollars at their disposal.
HOW THE CRYPTOCURRENCY MARKET WORKS
How does trading in the cryptocurrency market differ from traditional currency and stock markets? Let's look at the main differences:
High volatility. Coin prices can change very dramatically in a short time. Factors affecting the value of digital currency can be very different and often unpredictable.
Low entry threshold. A novice cryptotrader can make his first transaction with a small amount of money in his account.
Cryptocurrency exchanges operate around the clock and without interruptions.
Buying and selling different coins or tokens is done on specialized cryptocurrency exchanges or exchanges. Cryptocurrency exchanges work on blockchain technology and are divided into two types:
Centralized (CEX). These exchanges are managed and controlled by organizations. Exchange transactions are charged a fee, which covers the cost of the service and the interaction between the seller and the buyer;
Decentralized (DEX). Coins are traded without the participation of intermediary organizations. No information about the user is stored on DeX.
CRYPTOCURRENCY TRADING: WHAT TO START?
It's impossible to start successful cryptocurrency trading from scratch. Deciding to invest free funds in cryptocurrency trading, you must first of all prepare a knowledge base. In order to trade successfully, a crypto trader needs to master basic skills:
Analyze the cryptocurrency and its trading volume;
use charts and coding;
Make buy and sell transactions;
track your trading history.
When evaluating a cryptocurrency's prospects, you should pay attention to the following aspects:
What idea the cryptocurrency was created for and how in-demand it may be;
The combination of these factors ensures an increase in the cryptocurrency's capitalization and, therefore, its value. Charts show the history of the growth of the token against another cryptocurrency or fiat money. Charts can be created using the interface of exchanges that specify different time periods and select different trading pairs. The overall liquidity of the cryptocurrency, how interesting it is to users, whether the demand for it is increasing or decreasing, is tracked by the trading history and volumes. Based on the knowledge gained, it is possible to draw a conclusion about the profitability of the cryptocurrency, predict its movement and make a profitable deal.
First, a new user needs to create an account, be verified (if necessary), fund the account and you can start trading.
As a rule, this stage is not complicated and does not take much time. For example, in https://wellcrypto.io/broker/ftx/, you can choose the registration method (email or cell phone) and fill in a simple form (email address or phone number, password for account creation).
On some exchanges it is possible to trade anonymously. However, most trading platforms require clients to be verified by providing personal information and documents. Some give traders the choice to be verified.or trade without it.
Depositing an exchange account is also done according to a standard algorithm: select a depositing card and transfer funds to the specified depositing address. Different exchangers offer different deposit methods. Some only work with digital currencies, others also support fiat currencies.
You buy and sell assets on the trade tab using the trading terminal. The algorithm is the same on each exchange:
select a trading pair;
fill in the buy or sell order form, selecting the order type: quantity, price, price limit;
Click the buy or sell button.
Withdrawal methods also vary from platform to platform, as well as commissions. On some exchanges, funds are withdrawn without commission, but even then you will have to pay a network fee.
TOP 8 CRYPTOCURRENCY TRADING STRATEGIES
Cryptocurrency trading on the exchange
The differences in trading systems are mainly in the settings of indicators.
Literally, this tactic translates as "buy and hold". That is, you buy a coin, wait for a significant increase in price and sell, fixing the profit. This strategy is suitable only for investors with a planning horizon of at least several years.
The "WPR + volatility" strategy
This is an indicator strategy for cryptocurrencies, taken from a foreign forum forexfactory. Auto recommends using it only for bitcoin, etherium and ripple (links these cryptocurrencies to the dollar).
Scalping on Cryptocurrencies - Trendline Scalping System
Scalping strategies for cryptocurrencies are characterized by the fact that work is carried out on small timeframes, and most often the processing of the transaction is not delayed for the next day. The considered trading system is a hybrid of graphical analysis and several standard indicators.
Scalping on Cryptocurrency
This cryptocurrency margin trading strategy is a type of trading at the end of a pullback. The main criterion is a breakdown of the trend line, oscillators play the role of filters to enter the market. Suitable for any cryptocurrency and timeframes.
Daily Chart 3-Candle Strategy
This strategy for cryptocurrency is based on the well-known inverted pattern. The optimal trading scenario is on the daily chart, the entry point is determined by the design of 3 candles.
Graphical analysis of crypto trading
Trend lines, support/resistance levels, Fibonacci levels and extensions, patterns - all of these tools work without being tied to a specific market. They are also used in cryptocurrency trading. Graphical analysis cannot be called a cryptocurrency trading strategy - it is rather a set of tools from which a trader builds his trading system.
"Beat the market" strategy
The strategy is a combination of standard cryptocurrency trading in a channel + work with levels. But in contrast to the graphical analysis, here all the constructions are created by a set of own indicators, levels of rotation from different timeframes. The width of the channel is tied to the volatility, there is no need to rebuild it, the chart spends most of the time in the channel.
Alligator cryptocurrency trading strategy
This trading system uses only one indicator (Bill Williams' alligator), but the analysis is conducted on 3 timeframes. Alexander Elder's principle is used - determine the global trend on the older timeframe, look for correction on the younger timeframe and find the entry point on the youngest timeframe.
ADVANTAGES AND DISADVANTAGES OF TRADING
A trader must constantly monitor the market, which takes a lot of time
Trading cryptocurrency on exchange is one of the most modern and promising ways of making money in the sphere of modern technologies. To become one of the traders, it is not necessary to have a huge initial capital and some knowledge, inaccessible to others. People who are just beginning their way in this sphere and have a modest capital of a few thousand can be participants in the market. The main thing is to approach this question as responsibly as possible: study all the most common methods and techniques of analysis, data on the characteristics of various exchanges, information on the cryptocurrencies you are interested in.