Crypto Trading: Your Comprehensive Hub

Dean Decho, 7 min read
Last Updated: 6 July, 2023

crypto trader

Introduction to Crypto Trading

Digital gold or an enigma?

If you’re already familiar with stock trading or ETF trading, you’ll find some aspects of cryptocurrency trading to be quite similar.

Although if you’re baffled by terms like ‘blockchain,’ ‘Bitcoin,’ and ‘crypto wallet,’ we’ve got you covered.

This guide simplifies the complex world of trading and reveals crypto trading strategies for best results.

Key Takeaways

  • Cryptocurrency Trading Basics: Cryptocurrency trading involves speculating on the price movements of digital assets. It’s done either via an exchange, where you buy and sell the actual cryptocurrencies, or via a CFD account.
  • Types of Cryptocurrencies: The most common cryptocurrencies include Bitcoin, Ethereum, and Litecoin. However, there are over 10,000 cryptocurrencies, each with unique features and potential for trading.
  • Getting Started: To start trading, you need a digital wallet to store your crypto and a reliable exchange platform where you can buy and sell them. Understand how trading pairs work, and you’re ready to begin.

Types of Cryptocurrencies

From Bitcoin, the pioneering giant, to Ethereum, the platform for decentralized apps, the crypto landscape is as diverse as it is expansive. There’s Litecoin, a peer-to-peer crypto referred to as ‘silver to Bitcoin’s gold.’ And we can’t overlook Ripple, a digital payment protocol that also has its own currency, XRP. Delve into these and more to find which cryptocurrency speaks to your trading ambitions.

Bitcoin. Ethereum. Litecoin. These are just a few names you may have heard on the digital wind, whispers of a new frontier of finance. Each of these is a cryptocurrency—a type of digital or virtual currency that uses cryptography for security.

Bitcoin

Our journey into the heart of the crypto-verse begins with Bitcoin (BTC), the original cryptocurrency, launched by the enigmatic Satoshi Nakamoto in 2009. Bitcoin is often referred to as ‘digital gold,’ prized for its decentralization, scarcity, and potential as a hedge against traditional financial market instability.

Dive deeper into Bitcoin trading.

Ethereum

Next, we encounter Ethereum (ETH), the silver to Bitcoin’s gold. Launched in 2015, Ethereum offers more than just a digital currency (Ether); it’s a platform for creating and running smart contracts and decentralized applications (dApps). This adaptability has driven Ethereum’s growth, making it an interesting prospect for many traders.

Litecoin

On our crypto safari, we’ll also meet Litecoin (LTC). Created by former Google engineer Charlie Lee in 2011, it’s often referred to as the ‘silver to Bitcoin’s gold.’ It’s cherished for its faster block generation times and thus quicker transactions.

Others

But these are just the tip of the crypto iceberg. There are over 20,000 other cryptocurrencies (often called altcoins), including Ripple (XRP), Cardano (ADA), and Polkadot (DOT). Each comes with its unique features and uses, meaning there’s a whole universe of trading opportunities out there.

Getting Started in Cryptocurrency Trading

Learning to trade cryptocurrencies might seem like learning a new language. But once you become fluent, you’ll be ready to converse with the market. Start by setting up a digital wallet—a place to store, send, and receive cryptocurrencies. Then, choose an exchange platform where you’ll buy and sell your digital assets. Pair up your chosen cryptocurrencies, and you’re ready for the trading floor. Always beware of crypto trading scams.

Creating a Cryptocurrency Wallet

First, you’ll need to set up a digital wallet—a place to store, send, and receive cryptocurrencies.

Wallets come in different forms. You’ve got online wallets (often provided by crypto exchanges), mobile wallets (handy for trading on the go), and even hardware wallets (physical devices that store your crypto offline, safe from hackers).

Picking the right wallet depends on your needs, so think about security, convenience, and functionality.

Choosing a Cryptocurrency Exchange

Once your wallet is ready, it’s time to choose a cryptocurrency exchange—think of it as the stock market for cryptocurrencies.

There are plenty to choose from, each with its unique features. Some, like Binance and eToro, offer a wide range of altcoins. Others, like Bitstamp, cater to the classics like Bitcoin and Ethereum. You’ll want to consider things like security, user experience, the cryptocurrencies offered, and the fees when choosing your exchange.

bybit logo
Exchange

ecoinomy rating:

9.0/10


Max Leverage 100:1
Headquarters Dubai
Deposit Fees Card 2%
Trading Fees 0,075%
Cryptocurrencies 370 BTC kryptowaluta logoETH logo della criptovalutaBCH logo della criptovalutaRipple криптовалута логоADA криптовалута логоLTC криптовалута логоTezos криптовалута лого
Payment Methods Crypto, Visa, MasterCard
Number of Users 3.000.000+

Security

Fees

Ease of Use

Customer Service


Start here

bitget logo
Exchange

ecoinomy rating:

8.9/10

Max Leverage 100:1
Deposit Fees Debit card 3-4%
Trading Fees 0.1%
Regulations
Cryptocurrencies 500+ BTC logo CriptovaluteETH Criptovalute logoIOTA logoBCH logoRipple logoDASH logoADA logoEOS logoLTC logoTezos logoNEO logoXLM logoZEC logoETC logoOmise-Go logo
Payment Methods Crypto, Visa, MasterCard, Bank Transfer, SEPA
Number of Users 2.000.000+

Security

Fees

Ease of Use

Customer Service


Go to Bitget

gate.io logo
Exchange

ecoinomy rating:

8.9/10

Max Leverage 10:1
Deposit Fees Debit card 2-3%
Trading Fees 0.145% - 0.2%
Regulations
Cryptocurrencies BTC logo CriptovaluteETH Criptovalute logoIOTA logoBCH logoRipple logoDASH logoADA logoEOS logoLTC logoTezos logoNEO logoXLM logoZEC logoETC logoOmise-Go logo +1400
Payment methods Crypto, debit and credit cards, bank transfer, Banxa, SEPA, Apple Pay, Google Pay
Number of users 10.000.000+

Security

Fees

Ease of Use

Customer Service


Go to gate

Understanding Cryptocurrency Trading Pairs

On a crypto exchange, you’ll trade cryptocurrencies in pairs—like trading USD for EUR on the foreign exchange market. A pair might look like this: BTC/ETH. This means you’re trading Bitcoin for Ethereum. Understanding how these pairs work is crucial for navigating the crypto market.

Making Your First Trade

Now you’re ready to make your first trade. The details will depend on your chosen exchange, but generally, you’ll need to select your trading pair, decide on the type of trade (like a market order or limit order), and then confirm the trade.

And just like that, you’ve joined the crypto trading revolution!

Cryptocurrency Trading Strategies

In the crypto kingdom, strategy is king. Here, we explore the ruling strategies from the straightforward ‘buy and hold’ to the more active ‘day trading‘. Then there’s ‘swing trading‘, ideal for those who can’t monitor their position all day but have time for analysis. For the swift and savvy, ‘scalping’ allows profits from small price changes.

Pick your crypto trading strategy based on your trading style and risk tolerance.

Trading Cryptocurrencies with CFDs on Licensed Platforms

Trading with cryptocurrencies and setting up a hardware wallet can be a daunting task, especially when considering the technical knowledge required to understand blockchain technology and digital wallets.

But what if there was a simpler, more secure way?

Let’s view another aspect of crypto trading – Contracts for Difference (CFDs) trading on licensed platforms like eToro, Libertex, and Skilling.

What is CFD Trading?

In CFD trading, instead of buying the actual cryptocurrency, you enter a contract with the broker to settle the difference between the entry and exit price of the crypto asset. This means you’re speculating on price movements without owning the asset.

Trading CFDs vs. Trading on an Exchange

When trading on an exchange, you buy the actual cryptocurrency, which then needs to be stored in a digital wallet. This requires a degree of technical understanding and poses security risks if not handled correctly.

In contrast, with CFD trading, there’s no need for a wallet since you’re not owning the cryptocurrencies. You’re merely capitalizing on their price changes.

Moreover, trading CFDs allows for ‘shorting,’ i.e., trading with a falling in price.

The Advantage of Licensed Platforms

Licensed platforms like eToro, Libertex, and Skilling adhere to regulatory standards, offering traders peace of mind. They are mandated to maintain transparent operations, provide adequate security measures, and segregate trader funds from their own, which enhances the safety of your investment.

These platforms also often offer intuitive interfaces and robust customer support, reducing the technical barriers to entry for new traders.

Trading cryptocurrencies through CFDs on licensed platforms can be a beneficial approach for those seeking a simpler, more secure trading experience. However, it’s essential to understand the risks associated with CFD trading, such as the use of leverage, which can amplify both profits and losses. Always trade responsibly, and consider your risk tolerance and investment goals.

Winner
eToro-Icon
Hybrid

ecoinomy rating:

9.5/10

Assets Traded Stocks, Indices, ETFs, Currencies, Commodities, Cryptoassets
Max Leverage Up to 30:1 (varies by asset)
Trading Fees Spread 1%
Regulations EU, USA, UK, Austalia, Middle East
Cryptocurrencies 79+ BTC-Coin-IconETH-Coin-IconMIOTA-IconBCH-IconRipple-IconDASH-IconADA-Coin-IconEOS-IconLTC-IconNEO-IconXLM-IconZEC-IconEthereum-Classic-IconBNB-Icon
Payment Methods PayPal, Visa, MasterCard, Skrill, Neteller, SEPA, WebMoney
Number of Users 30 Million+

Security

Fees

Ease of Use

Customer Service


Start here

Cryptoasset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.


skilling logo
CFD Broker

ecoinomy rating:

9.4/10


Trading Assets Forex, Shares, Indices, Commodities, Cryptocurrencies
Max Leverage Up to 50:1 (varies by asset)
Trading Fees 1%
Regulations EU
Cryptocurrencies 51+ BTC-Coin-IconETH-Coin-IconMIOTA-IconBCH-IconRipple-IconDASH-IconEOS-IconLTC-IconNEO-IconXLM-IconZEC-IconEthereum-Classic-IconTezosMoneroCosmosVechainUniswap
Payment Methods SEPA, VISA, MasterCard, Trustly, Skrill, Neteller, Klarna, Swish
Number of Users unknown

Security

Fees

Ease of use

Customer service


Start here

Understanding Crypto Markets

To swim the crypto sea, you need to understand the currents and tides—market trends and patterns. Crypto charts are your star maps, and market indicators like volume and market cap are your compass. Learn to read these, and soon you’ll be navigating the market like an experienced captain.

Risks and Challenges in Crypto Trading

Trading cryptocurrencies isn’t all about sailing smooth seas. It comes with its storms—market volatility, security risks, and regulatory uncertainties. We delve into each of these, helping you understand and mitigate them. Knowledge is your lifeboat in these potentially turbulent waters.

Advanced Cryptocurrency Trading Topics

Ready to take your trading up a notch? Enter the world of margin trading, futures, options, and yield farming in cryptocurrency trading. These concepts might sound daunting, but with a little effort, they can be mastered. Prepare for a deep dive into these advanced trading topics.

Resources and Tools for Trading Cryptocurrencies

Every craftsman needs the right tools. As a cryptocurrency trader, the same principle applies. From trading platforms to market analysis tools, we’ve got you covered. Make sure your toolbox is equipped with the essentials, such as a reliable crypto exchange, a trusted news source, and efficient charting tools as well as the best timing to trade crypto.

Conclusion

You’re now equipped to dive into the crypto ocean. Remember, the market is vast and can be complex, but with the right tools and guidance, you can navigate it successfully. Welcome to the world of cryptocurrency trading—your adventure begins now!

Frequently Asked Questions (FAQs)

What is cryptocurrency trading?

Cryptocurrency trading involves speculating on price movements via a CFD trading account, or buying and selling the underlying coins via an exchange. Traders buy cryptocurrencies hoping that the price will rise, allowing them to sell for a profit, or they sell cryptocurrencies anticipating a price drop, where they can buy back at a lower rate.

How does cryptocurrency trading work?

Cryptocurrency trading works by speculating on price movements in the market. This can be done either by buying and selling actual cryptocurrencies via an exchange or by using derivatives products to speculate on their price movements.

How do I get started in cryptocurrency trading?

To get started in cryptocurrency trading, you need to set up a digital wallet to store your cryptocurrencies. Then, you choose a cryptocurrency exchange where you will buy and sell your digital assets. After that, you can pair up your chosen cryptocurrencies and start trading.

What are the risks of cryptocurrency trading?

The main risks associated with cryptocurrency trading are market volatility, security threats, and regulatory changes. The prices of cryptocurrencies can be extremely volatile, which can result in significant financial losses. Cybersecurity is also a significant concern, as cryptocurrencies are often targeted by hackers. Finally, changes in regulations can impact the value and legality of certain cryptocurrencies.

What tools do I need for cryptocurrency trading?

Some essential tools for cryptocurrency trading include a reliable cryptocurrency exchange for buying and selling cryptocurrencies, a secure digital wallet for storing your cryptocurrencies, and a source of reliable news and market analysis. Some traders also use trading bots to automate their trading strategies.

Which cryptocurrency is best to trade?

The best cryptocurrency to trade depends on your personal objectives, risk tolerance, and understanding of different cryptocurrencies. Bitcoin and Ethereum are among the most traded cryptocurrencies due to their high market capitalization and liquidity. However, other altcoins also offer trading opportunities.

How do I choose a cryptocurrency wallet?

When choosing a cryptocurrency wallet, consider factors like security, user experience, and compatibility with different cryptocurrencies. Some wallets are hosted online, offering convenience, while others are stored on hardware or your computer for increased security.

Dean Decho

Dean is a passionate advocate for the financial freedom and independence offered by Bitcoin and the cryptocurrency space. Enthusiastic about the cutting-edge technology and the dynamic community behind it, Dean enjoys sharing valuable insights and empowering others to embrace the transformative potential of digital currencies.