Nowadays many individuals are interested in earning through crypto, but they find it hard to understand how crypto trading for beginners work. If you want to learn crypto trading then you must educate yourself about the basic terms involved in crypto trading such as blockchain, wallets, private keys and public keys. In this article we will provide you with all the basics of how crypto trading works and an easy guide for beginners.
What is crypto and Types of coins in cryptocurrency
Crypto currency is a digital currency which doesn’t have any physical identity, we can’t touch it or keep it in our wallet or bank account. It can only be accessed through internet and online wallets. Similarly, it can’t be traded hand to hand but in digital form.
Just like every country has its own currency, crypto has various coins that are used as currencies. The list of these coins include;
- Bitcoin (BTC)
- Ethereum (ETH)
- Binance Coin (BNB)
- Ripple (XRP)
- Cardano (ADA)
- Solana (SOL)
- Polkadot (DOT)
- Dogecoin (DOGE)
- Litecoin (LTC)
- Chainlink (LINK)
- Stellar (XLM)
- USD Coin (USDC)
- Bitcoin Cash (BCH)
- Uniswap (UNI)
- Wrapped Bitcoin (WBTC)
How does crypto trading work?
Crypto trading for beginners might be complex to understand. To start your earning cycle, first you need to purchase coins at the lowest rate through a legitimate crypto currency exchange, such as binance and Coinbase and then sell them when the prices go high. You can hold the coin for days or even months,it depends upon your investment. For example, the price of one bitcoin purchased in 2015 was RS1.5 lac and now in 2023 the price of one bitcoin is in crores. So, it’s all about the sale and purchase of your coins at the right time.
Cryptocurrency can be traded in pairs and when you want to make a sale or purchase, you’re offered the current price rate, but you can also set a limit to a fixed amount. This will help in achieving your desired goals and the order will only be placed if the market reaches your specified price.
You must keep track of the market conditions and stay updated with all the ongoing situation in the market in order to have a better understanding of how crypto market works, and what’s the best time to execute an order. Maximize your potential in the world of crypto trading for beginners by staying informed and proactive.
One thing you must be aware of as a beginner is that you should only invest the amount that you can afford to bear the loss of. As crypto market keeps fluctuating and it’s possible that crypto trading for beginners often causes loss in their first attempt. The wise decision would be to make small investments that are affordable.
Common Mistakes of Crypto Trading for Beginners to Avoid
Whenever you’re doing business or doing any kind of trade there are always some precautions and some measures you need to follow to avoid any problems or risks in the future. Gain confidence in your decisions by seeking expert advice into crypto trading for beginners. When you’re trading crypto currency, you need to take care of certain things in order to avoid any loss in the future.
- FOMO (Fear of Missing Out) and Impulsive Decisions:
Sometimes the pressure of avoiding loss can lead you to wrong decisions or your impulsive actions can also bring a negative outcome in terms of profit due to wrong decisions. It is important to always plan your trading strategy and you must take each step with all the necessary calculations. If you’re trading without any proper knowledge and understanding of how the trade market works there’s a high chance that you will have to bear heavy loss.
- Negligence of Security Measures
Many traders don’t understand the importance of how necessary it is to take security measures to protect their account and their wallet from any potential theft or security threat from hackers. To avoid breach of your security you must use two factor authentication and update your passwords regularly, you should also use hardware wallets for long term use and never share your passwords with anyone.
- Ignoring Fundamental Analysis
Traders usually focus on technical analysis, and they overlook the fundamental analysis which can also cause problems. Such as they can miss the crucial information about a cryptocurrency such as its validity and its potential. There’s a high possibility that the trader might fail to identify promising investment opportunities. Hence you must focus on both fundamental and technical analysis to make the most calculated move during the exchange of currencies.
If you’re a beginner and having a hard time understanding how crypto trading works, you might get your answers in this article as it tells you about the basics of learning crypto trading before actually investing in it.