The volatility of cryptocurrencies has drawn the attention of millions of people all over the globe. If you are able to make the right decisions, crypto trading can help you generate significantly higher returns as opposed to traditional investments. Therefore, it is not surprising that cryptocurrencies have become one of the hottest assets in the financial markets nowadays and the market has seen a massive influx in traders. But, how do you get started? If you are also thinking of jumping on the crypto bandwagon, you need to learn how to trade cryptocurrencies.
Most people don’t know what to do or how to begin trading cryptocurrencies. The good news is that the process is quite similar to how you start trading other traditional assets, such as forex. The steps you need to take are outlined as follows:
Step 1: Make a crypto brokerage account
Unless you have already bought some cryptocurrency, the first thing you need to do to start trading is to make a crypto brokerage account. A quick search will show you that there are a number of crypto brokerages that exist these days and you need to go through the options to choose one. Look for a brokerage that can offer you a variety of cryptocurrencies as well as a simple user interface that you can use easily, even if you have no prior experience.
There are some good options that can provide you with everything you need in one place and also have an easy account opening process. You will be required to fill out a form on the website, similar to a stock or forex broker and also provide some verification details in accordance with AML and KYC procedures.
Step 2: Fund your brokerage account
Now that you have opened up your crypto brokerage account, you cannot start crypto trading without adding funds. Most of the cryptocurrency brokers out there offer you bank funding options via wire transfers as well as debit and credit cards. Reliable and professional brokers will offer support for cards like Visa, MasterCard and Maestro, so you can make your deposits easily.
Step 3: Choose a crypto to invest in
Most of the active cryptocurrency traders in the market decide to invest in Bitcoin or Ethereum. As these cryptocurrencies tend to move more predictably as opposed to other smaller altcoins, it can be easier to trade them with the help of technical indicators. However, you should also allocate some of your capital to smaller altcoins because this can help you minimize the risks associated with crypto trading. Smaller or mid-market capitalization cryptocurrencies might be riskier, the fact is that they can offer you a higher upside potential. There are a number of small altcoins that have increased by almost 1,000% in a few months, which makes them an attractive investment.
Step 4: Select a strategy
You will come to know that there are numerous trading indicators that exist and you can take them into consideration when trading cryptocurrencies. You can also enroll in a crypto trading course in order to become better acquainted with the indicators that exist. As a matter of fact, there are some good brokers, such as Monafoli, which provide their clients with access to extensive educational resources on their platforms that can come in handy for devising a strong crypto trading strategy that can generate strong returns.
Step 5: Explore automated trading
When you are looking for a crypto trading strategy, you will come across the option of automated trading. You can find a number of trading bots that can enact a strategy on your behalf and there are different types of robots that can offer you a neutral, aggressive, or even a conservative method. This will help you in making money quickly, diversify your portfolio and also hold your coins.
You can also consider using automated trading on some platforms and actively trading cryptocurrencies on others, allowing you to make the most of the opportunities in the crypto space.