Date of publication: 
Time to read: 
Views: 
The cryptocurrency market has already become an integral part of the global financial system, and its popularity continues to grow. More and more people want to master trading digital assets in order to earn income from their movements on the market. However, for a successful start, it is important to understand how the cryptocurrency market works, what strategies and tools to use, and how to avoid frequent mistakes.
In this article, we will review the main aspects of crypto trading and provide step-by-step instructions for beginners.
Crypto trading: what it is
Cryptotrading is the process of buying and selling cryptocurrencies on special platforms called exchanges. The key goal of trading is to make a profit due to the difference between the buying and selling prices. Since the cryptocurrency market, unlike the stock market, is characterized by high volatility, i.e. sharp price fluctuations, experienced traders can make money on rate changes even within one day. However, crypto trading is associated with risks, as the market can move not only upward, but also downward. Beginners should keep in mind that successful trading requires knowledge and discipline, as well as readiness for possible losses.
Investing and crypto trading: what is the difference
Before you start trading, it's important to understand how crypto trading differs from cryptocurrency investing. While both involve buying digital assets, their goals and approaches are different:
Investing is a long-term investment in cryptocurrencies with the goal of earning a profit in the future when the asset's price rises significantly to its intended levels. Investors usually buy and hold cryptocurrencies without seeking frequent transactions and are willing to wait months or even years for returns.
Cryptotrading is the active trading of cryptocurrencies with the goal of making profits in a short period of time. Traders open and close positions in minutes, hours, or days to capitalize on rate changes. Trading requires market analysis, quick reactions and the ability to make decisions in the moment.
Beginners are often advised to start with investments to minimize their risks. Those who are ready to be more active will need to learn crypto trading strategies.
Strategies and tools for cryptocurrency trading
Before you start trading, it is important to choose the right strategy, as it is the strategy that will determine your success. Here are a few strategies that are popular among traders:
1. Day trading - involves opening and closing trades within one day. Traders analyze short-term price changes, trying to profit from daily fluctuations. Day trading requires a lot of time and constant monitoring of the market.
2. Scalping is a strategy where traders make many trades in a short period of time, capitalizing on small price changes. This strategy requires quick reactions and accurate analysis, it allows you to get income due to the volume of transactions.
3. Swing trading - involves holding assets for a few days or weeks in order to capitalize on medium-term fluctuations. Swing trading requires less time to monitor the market than day trading and is suitable for those who are not ready to trade daily.
4- Arbitrage - using the difference in prices of the same cryptocurrency on different exchanges. For example, if the price of bitcoin is higher on one exchange than another, a trader can buy the asset on one platform and sell it on another. Arbitrage requires an increased level of attention and speed of decision-making, as the price difference is usually small and short-lived.
To analyze the market and predict changes in prices, traders use such tools as indicators and analytical platforms, charts of trading instruments, as well as an indispensable tool for every beginner and professional - Veles backtests. Popular indicators include Moving Average, Relative Strength Index (RSI), MACD and others, more details about other indicators can be found on our Veles Wiki platform.
Preparing for cryptocurrency trading
Before you start trading, there are a few preparatory steps that are the foundation in this difficult endeavor.
Choosing an exchange to trade on
The first step is to choose an exchange on which you will trade. Among traders, the most common are - Binance, Bybit, OKX. An exchange is a platform where users can buy and sell cryptocurrencies. Here are a few factors to consider when choosing an exchange:
- Reliability and security
Choose a platform with a good reputation and history that provides reliable protection of users' personal data and funds.
- Support for fiat currencies
If you plan to deposit and withdraw money in traditional currencies (such as rubles), make sure the exchange supports these features and you will have the option to use a P2P platform.
- Commissions
Find out about the maker (seller) and taker (buyer) commissions on transactions, as commissions can vary widely between platforms. Familiarize yourself with the nuances of depositing and withdrawing funds.
- Convenience of the interface
If you are a beginner, it is better to choose an exchange with an intuitive interface and a demo account to facilitate the trading process.
Exchange registration and account funding
After selecting an exchange, you will be required to register, undergo identity verification (KYC) and fund your account. KYC verification allows exchanges to comply with regulatory requirements and prevents fraud, without this procedure, asset trading and P2P platform on most centralized crypto exchanges will not be available. Depositing an account can be done using the P2P platform within the exchange, by exchanging fiat funds for cryptocurrency.
Choosing a cryptocurrency pair for trading
Choosing a cryptocurrency pair is all about deciding which assets you will buy and sell. For example, BTC/USDT, a pair of bitcoin and Tether, is a popular pair to trade because it offers high liquidity. For beginners, it is recommended that you start with the major cryptocurrencies (e.g. bitcoin and etherium) as they are less volatile and offer high liquidity.
Choosing or developing a strategy for trading
After preparation, you should choose a strategy to trade. Initially, it is important to avoid complex strategies and use simple approaches such as day trading or swing trading. Remember that any strategy should be tested before using it in real trading, and Veles backtests - a tool for testing trading strategies - are a great way to do this.
Common mistakes when trading cryptocurrency
When starting trading, beginners may encounter a number of common mistakes. Here are some of them:
1. Lack of strategy - trading without a plan often leads to losses. Make sure you have a well thought out strategy and stick to it.
2. Psychological pressure - beginners often succumb to emotions, buy at the peak and sell when prices fall. It is important to keep your cool and act according to your strategy.
3 Lack of practical and theoretical knowledge - successful trading requires understanding of the market and analysis tools. Be sure to learn the basics before you start full-fledged trading.
4. Ignoring risks - the cryptocurrency market is unstable and every trade can be both profitable and unprofitable. Do not risk large amounts and set loss limits (stop-loss).
5. Over-trading - striving to be in a trade all the time can lead to unprofitable trading. Sometimes the best option is to simply wait for systemic reasons to enter.
Conclusion
Cryptocurrency trading offers great opportunities to make money, but to succeed, you need to understand the basics, develop a strategy and avoid common mistakes. If you are just starting your way in crypto trading, try to take your time and pay attention to learning and testing your chosen strategy. Over time, as you gain experience, you will be able to trade more confidently and possibly make a stable profit.
Frequently asked questions
1. Why is it important to choose the right strategy for crypto trading?
Choosing the right strategy is the key to success in crypto trading, as it determines when and how to make trades. Each strategy has different requirements in terms of time commitment, skills and patience. Beginning traders are recommended to choose simple ready-made strategies and test them on a demo account to minimize potential risks.
2. What is the difference between crypto trading and investing in cryptocurrency?
Crypto trading is focused on short-term profits and requires constant market analysis, quick reaction and making decisions in the moment. Cryptocurrency investing, on the contrary, is focused on long-term holding of assets with the expectation of significant growth of their value in the future.
3. What is a cryptocurrency exchange and how to choose the right one for trading?
A cryptocurrency exchange is an online platform where users can buy, sell and exchange digital currencies. When choosing a suitable exchange, you should consider several key factors: the reputation and security level of the platform, the ability to work with fiat money to simplify deposit and withdrawal, transaction fees, user interface convenience, and the availability of a demo account for those who are just starting out.
4. What is a trading strategy?
A trading strategy is a predetermined set of rules and methods that a trader follows when making transactions on the market.
5. What trading pairs should I trade if I am a beginner?
For beginners, it is best to trade highly liquid and low volatility coins, such as BTC, ETH, SOL, ADA, XRP, DOGE.
