It’s very hard not to have heard of cryptos.
Even harder to ignore if you are an investor.
Maybe you are not a crypto investor, but want to be.
If so, here is our fundamental analysis of everything you need to start trading them.
Before you begin – it is vital to understand that when you invest and trade cryptos you are entering a very volatile arena.
Crypto prices can swing dramatically and unexpectedly. It is a market that never sleeps.
So, firstly, you must have a solid understanding of how the crypto market operates.
This will help you optimise your profits – while minimising potential losses.
You need to know that and be prepared for the volatility… and enjoy it!
There is no point in starting otherwise.
Enter cautiously, find your feet, have a play, and start small.
1. Two Ways To Trade
One involves speculating on prices through Contract For Difference (CFD).
The other is by investing in crypto and trading it when it increases in value.
A CFD crypto trade consists of a buyer and a seller. In other words, there is a winner and a loser.
Crypto trade is executed when the price for that crypto is agreed upon by the buyer and seller.
That price then sets the valuation for that crypto.
The more buyers there are for particular crypto, the higher the price usually goes.
When there are more sellers than buyers, the price goes down.
Buying and Trading via an exchange
You might wonder if you can trust a third-party exchange (or platform), but you need not worry about that – the top exchanges have been up and running for many years, so they are legitimate.
When you invest/buy crypto on an exchange you are in effect buying and owning a fraction of that crypto.
You will need to open a crypto trading account and have a “wallet” to store your cryptos in.
The next step is to transfer money from your normal bank account to your crypto trading account.
This will convert the fiat currency to digital currency when you buy your first cryptos.
This all becomes clear when you learn about cryptocurrency.
2. You Must Have A Trading Plan… And a lot more besides!
If you thought trading and investing in cryptos was simply a case of turning up, clicking a button, buying your crypto, sell it for profit – you’d be right.
BUT – and this is a BIG but – that is merely how easy the process is.
The secret to being a successful crypto trader involves a lot more than that.
- A Plan
- Good mindset
The truth is, trading cryptos can be highly profitable… but equally, it can be just as easy to fail if you are new and don’t know what you are doing.
That is not a criticism. It’s reality.
That is why having a plan is crucial. Your plan should tell you:
- What you want to achieve with your crypto trading (generate quick income or invest for the future)
- How much you are putting aside to invest and trade (a budget)
- Set out a risk management plan (how much you are willing to risk with any trade)
- Know when to get in… and when to get out (strategies)
- What tools you are going to use (methodology)
- Always remember to keep your emotions out of it and trade with confidence (a good mindset)
3. Knowledge & Training
This is linked to having a plan because trading with cryptos is not like playing the lottery.
To enjoy trading cryptos and be successful in making money with them, it is far better to have some solid knowledge and suitable training.
You can achieve this in any online trading course.
There are so many things to learn and be aware of, such as:
- Reading the markets
- Technical analysis
- Market structure and cycles
- Watching the “whales”
- Support and resistance
- Uptrend and downtrend lines
- Moving averages
- Chart patterns
- Candlestick chart
- Fundamental analysis
- Blockchain & Community
- Crypto Ecosystem
- Technical specifications
This is everything you need, and more, to trade cryptos successfully.
If you have read this far, you will have everything you need to start trading cryptos.
Understanding the risk involved with crypto trading investments is a must.
Knowing about risk-reward is also important.
Because being properly prepared before entering the crypto market is essential if you want to succeed.
Prepare to succeed with a plan to achieve success.
To find out more, reach out to us here IM INSIDER.