Most newbies and intending investors hear of the exciting and attractive results that are posted by old and professional traders in the crypto market and think they can do the same.
However, sometimes they start doing it without understanding the basic concepts and analysis involved in the act of trading.
The increased awareness of blockchain technology projects and how they could become beneficial to the human race started gaining more traction and eventually came into the limelight in a louder form when Bitcoin made its all-time high in December 2017.
Several trading exchanges saw the need to set up their services in order for new entrants into the crypto market to have access to the cryptocurrencies and eventually trade such coins or tokens for profitability purposes.
Today, we’ll share some tips that might help you in getting to know this path.
What is crypto trading?
The act of trading cryptocurrencies requires a compulsory understanding of how it works before the users eventually take a step into this world.
In basic terms, crypto trading involves the act of speculating on cryptocurrency price movements either as a contract for difference (CFD) trading account – in other words, called margin trading, or buying and selling the underlying coins or tokens through an exchange.
How did you start trading?
In this article, we will give 3 simple tips to enable a newbie to engage in the trading of cryptocurrencies.
Although these are not laid down rules or explicit standards for beginners to start trading, we would like to encourage people to ensure they carry out due diligence and research before embarking on the journey of crypto trading.
In no order of preference, the three tips include but are not limited to the following:
- Choose an exchange for trading
This is one of the most important tips for a new trader who is interested in voyaging into the crypto market.
It involves the trader checking the compliance of the exchange with global best practices for trading as an exchange. It should not be a shady exchange without proper documentation, certifications, and rating by financial bodies.
The exchange should have large liquidity for its various market pairs in order to withstand massive trading activities and market volatility.
It is also important that the exchange should have good customer support services in order to handle customer complaints and respond appropriately.
The Klever Exchange is a very good example of such a service to its customers and also a recommended exchange for trading cryptocurrencies.
- Choosing what coins or tokens to trade
This is perhaps another important tip for every trader, no matter what level of experience you have.
It involves in-depth research on the part of the individual or trader at the very beginning of their quest to thread in the murky waters of trading cryptocurrencies.
The trader is expected to review and analyze the various coins and tokens by checking on the various metrics, which include checking the total coin supply, total market capitalization, the available liquidity, the number of coin holders, the use case of the coin or token in the project and how it impacts the human race.
However, in recent years there has been the proliferation of tokens or coins without use case or value propositions (Shitcoins) or Memecoins.
As tricky as it may seem, some traders profit from trading such tokens or coins within the exchanges.
It would be highly encouraged for new traders to not trade such tokens without a proper understanding of how they are produced and their exact use case.
These could become what is termed a pump and dump coin when the project developers get stuck in the process of validating such projects and they could eventually dump such tokens on unsuspecting new traders who perhaps would have seen the tokens during their period of pumping to the high side.
- Choosing a strategy
There are many strategies implemented by various traders all over the crypto market.
This is an important tip in the quest of becoming a crypto trader.
Traders can decide to be either of the following:
– Scalp traders: who would be involved in looking for small gains with a lower time frame ranging from 5 minutes to 1day.
– Swing Trader: The trader can also be a swing trader who is engaged in trading with a time frame from 2 days to 2 weeks with the purpose of maximizing his gains over a time period longer than the scalping trader.
– Long-term trader: There is also a long-term trader (holder) who is a different trading strategist that decides to buy such cryptocurrencies for the purpose of holding the tokens for a longer period of time usually from 6months to a few years.
The Klever team would always be at the forefront of educating our new and existing traders on the benefit of understanding the basics and strategies associated with crypto trading.
We are also proud to encourage our users to use the Klever exchange which is a highly secured exchange for trading cryptocurrencies in a Klever way.
It is indeed a Klever thing to do.