A Beginner’s Guide to Cryptocurrency Trading

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(Newswire.net — August 9, 2023) — When I started trading, I did not know where to start. Most crypto spaces are full of fakes and people who want to scam others.

Basic trading involves speculating on price movements via a CFD ( Contract of a difference) trading account or buying and selling the underlying coins via a SPOT trading exchange.

This is precisely why trading can seem daunting for those just beginning, so here is a beginner’s guide to help you start your cryptocurrency trading journey so you don’t lose at the start.

#Understanding the Basics

What is a Cryptocurrency?

Cryptocurrencies are digital or virtual currencies that use cryptography for security. The most well-known is Bitcoin, but thousands of other ‘altcoins’ are available. They operate on blockchain technology, a decentralized system that manages and records transactions across many computers.

#What is Cryptocurrency Trading?

Cryptocurrency trading involves predicting price movements via CFD accounts or buying and selling cryptocurrencies via an exchange. (SPOT) To start well, don’t use CFDs. The main reason is that you don’t own your crypto but are just speculating on the price of the underlying Cryptocurrency. The second reason is price lagging on the platform, making it more challenging to make any profits. CFDs have more to do with a casino than with trading.

#Getting Started

The first step in your cryptocurrency trading journey is to decide how you’d like to trade Cryptocurrency. There are two main methods: buying and selling via an exchange or speculating on price movements via a CFD. (not recommend)

Buying and Selling on an Exchange: (SPOT) You’re buying the Cryptocurrency. You’ll need to create an exchange account, put up the total value of the asset to open a position, and store the cryptocurrencies in your wallet like a Ledger NanoX until you’re ready to sell.

CFD Trading: Contracts for difference, or CFDs, are derivative products that enable you to trade on the cryptocurrency price movements without owning the actual cryptocurrencies. They’re leveraged products, meaning you can put down a small initial deposit and still gain the exposure of a much more prominent position.

#Deciding What to Trade

Thousands of individual cryptocurrencies are available for trading, each with its unique market. These markets are mostly grouped into ‘coins’ or ‘tokens.’

Coins: These are cryptocurrencies that have their blockchain. The most well-known is Bitcoin (BTC), but other currencies include Ethereum (ETH), Ripple (XRP), and Litecoin (LTC).

Tokens: Tokens operate on top of another blockchain, providing functionality such as smart contracts. Well-known tokens include Tether (USDT), Chainlink (LINK), and USD Coin (USDC).

#Developing a Trading Plan

Before you start trading, it’s essential to have a clear plan in place. Your trading plan should include financial goals, risk tolerance, methodology, and evaluation criteria. These a the minimum five items your plan needs to include:

  1. Goal Definition.
  2. Trading Style Selection and Risk.
  3. Strategy Development.
  4. Realistic Expectation Setting
  5. Money management system

Diversification is crucial, and going only in on one or two coins should be avoided.

Setting stop-loss orders at 5% below the entry point on unstable days and adjusting them is essential. Selling 30-50% of the investment and setting a stop-loss after reaching the first target is also recommended.

#Risk and Money Management

In any trading, it’s essential to manage your risk. Setting stop-loss and take-profit levels is vital in trading, diversifying your investments, and only risking a small percentage of your capital on any trade. Effective money management is crucial for safeguarding wealth and maximizing trading results. A disciplined approach to managing your funds makes achieving success in the crypto markets possible.

#Setting up an Account

Setting up an account varies by platform, but you’ll need to provide some personal information for identity verification due to Know Your Customer (KYC) regulations.

#Technical Analysis

Trading involves analyzing historical price movements and using indicators to predict future price movements. Traders often use candlestick charts and trend lines to analyze the market. The best option to use that is also free is Tradingview.

#Fundamental Analysis

Crypto trading involves analyzing the health of a project, including its competition, the team behind it, and any recent news or developments. Of course, Fundamental Analysis can offer a solution, but only if the information you found is unique and gives you an edge in the market.

Fundamental analysis is primarily used to assess the value of long-term investments across cryptocurrency projects and markets. In contrast, technical analysis is more commonly used for evaluating short-term trading choices, like actively trading cryptocurrencies.

#The use of trading Support or Signals.

An essential tool for traders to make decisions in the cryptocurrency market is a Signals provider.

These companies or people can help you with the first trade setups and ideas. A good signal group has a track record. I have tried many and used SmartOptions to find the best crypto signals on Telegram. These signals are primarily based on technical analysis, sometimes because of upcoming news/special information the channel is in the know.

#Keeping up with News

News and developments in the world of cryptocurrencies can significantly impact price.

Please ensure you stay updated with the essential news or check Coindesk.

That said, following the news is extra to trading and knowing the market, but the worst trading advice comes from most news websites, so consume wisely.


Cryptocurrency trading can be a rewarding venture, but it comes with its own set of risks. It’s essential to do thorough research and develop a detailed trading plan. Start with small investments, monitor the market regularly, and don’t be afraid to learn from your mistakes.

Happy trading!