The best time to start cryptocurrency trading was 15 years ago; the second-best time is today. Not really. But you get the idea. It’s never too late to start cryptocurrency trading (CCT), especially in today’s hyper-volatile markets. If you’re a young investor looking to invest in cryptocurrency, you’ve come to the right place.
In this article, we’ve put together a basic guide on cryptocurrency trading in 2020.
What Is Cryptocurrency Trading?
To put it simply, cryptocurrency trading is the process of buying and selling a variety of cryptocurrency in CCT exchanges for profit. CCT is all about high-risk, high reward. It is an extremely volatile market, with sudden swings in prices common as day.
What are the Two Types of CCT?
There are two types of CCTs: Long-term trading and short-term trading.
Long term trading(LTT) involves buying and holding cryptocurrency assets over long periods of time, hoping to profit in the long run.
Short-term trading(STT) is the opposite of LTT. This type of CC trading takes advantage of short-term CC price swings. It is all about getting high profits now. Of course, due to the volatility of the market, losses are to be expected.
When choosing which cryptocurrency trading to get into, make sure to carefully weigh each option, as well as determining which type suits you the most.
How Do I Trade Cryptocurrencies?
Most traders use Cryptocurrency Exchange Platforms such as Binance or Kraken to trade. Don’t worry, most platforms have nearly identical market pages, and you don’t have to understand every piece of information on the page to trade.
Let’s take a look at the three most common orders types you can make of Binance:
● Market: You can choose to either a buy or sell cryptocurrencies at the current market price. This type of order is executed immediately.
● Stop-limit: Using this order, you can choose to automatically sell when market prices reach certain parameters. You can set when to sell (stop price) and how much to sell for (limit price).
● OCO: OCO stands for “one cancels the other”. This type of order is put into place when two stop-limit orders are combined. When the parameters for one stop-limit order is met, it will be executed while the other stop-limit order will be canceled.
What to Watch Out For When Trading Cryptocurrency
Trading cryptocurrency can be dangerous. Here are a few things you need to know about the dangers of cryptocurrency trading.
– Cryptocurrency trading is volatile. This is probably the number one reason most traders want to get in on the cryptocurrency market. It is a market where high returns in a short period of time can be possible. However, with this comes the possibility of high losses.
– Cryptocurrency trading markets are unregulated. Because of its anonymous nature, cryptocurrency regulation is an incredibly hard task. As such, the market can be manipulated by traders with enough leverage. Even exchanges are sometimes accused of manipulating the market against their customers.
Sign up for cryptocurrency trading platforms and start trading today.