Simple And Secure Cryptocurrency Trading Methods For Beginners

A long time ago, in a galaxy far, far away, in 2017, the whole world started talking about cryptocurrency. By this time, some have already become rich on their investments; Others are beginning to understand the meaning of the blockchain. The high volatility of cryptocurrencies is always risk exposure, but as the wise saying goes, “nothing to risk, nothing to win.” In this article, StealthEX will guide you through the basics of cryptocurrency trading methods and cryptocurrency price analysis.

It is this volatility that has made cryptocurrency trading popular, as price fluctuations in the right hands often turn into profits. However, in order not to spend all the savings in the cryptocurrency market on the first day, theoretical and practical knowledge is required.

There is one main recipe for successful trading in any asset: buy low and sell high. Cryptocurrency is no exception. Unlike investing in cryptocurrencies, where long-term profits are expected when trading, you need to anticipate price changes in a shorter time frame.

What is cryptocurrency trading?

Cryptocurrency trading is the buying and selling of cryptocurrencies on cryptocurrency exchanges. This is a business that allows you to track price movements in the cryptocurrency market for profit. To start trading cryptocurrencies, you will need a crypto wallet and a crypto exchange.

How to predict the cryptocurrency rate

There are several ways to predict cryptocurrency prices, but the main ones are:

Fundamental analysis

Fundamental analysis is a valuation tool used by stock analysts to determine if an asset is overpriced or underpriced by the market. It takes into account the economic, market, industry and industry conditions in which the company operates and its financial performance. We have published a separate article on the opposition between fundamental and technical analysis. What is fundamental analysis?

• To determine the intrinsic value of a cryptocurrency, all factors that affect the value of this currency are taken into account. Therefore, it is necessary to carefully study the crypto project, its mission, fundamentals, technical aspects, team and roadmap.
• General analysis of the cryptocurrency market. It should be noted that the rates of "big" currencies, such as Bitcoin and Ethereum, are tied to the general market conditions.
• News on state regulation of cryptocurrencies. Prohibited actions greatly affect the value of cryptocurrencies.

Technical analysis

This method involves identifying price patterns and trends by building mathematical models. The goal is to determine the most likely price development scenario. Technical analysis is based on three assumptions. They:

• The market makes discounts. This hypothesis states that everything that can affect the price of a cryptocurrency in the market is reflected in its price. The price shows you everything you need to know about a cryptocurrency asset. Determining the movement of the price of a cryptocurrency asset does not require taking into account the fundamental factors that affect it, for example, you notice that the value of a crypto asset is declining. You can use charting information such as candlestick patterns, price cut volume, and other technical information to help you understand whether or not to invest in such a currency at any given time.
• The price moves in one direction. Price action always shows trends, even with random market movements, regardless of the timeframe used. Green and red candlesticks show trend patterns and price direction. Future price action is likely to follow a consistent trend. You can see an example of a cryptocurrency trend below. In this particular example, you see a trend line (blue) acting as support in an uptrend:

• History repeats itself. The repetitive nature of cryptocurrency markets means that analyzing past patterns can help you predict future market movements. Market participants typically react to market events over time. Although some graphic styles were created a long time ago, they are still considered important because they can appear again.

Fundamental Analysis vs. Technical Analysis

Many traders rely on technical analysis when making trading decisions. In fact, some people only believe in technical analysis. However, a combination of technical and fundamental analysis is a more rational approach to trading.

We can say that both methods, basic and technical, are important and necessary. If you are buying a new digital currency, pay attention to the basics. If a currency has been trading for a long time, be sure to take a closer look at technical analysis. It is also necessary to take into account the impact of unusual events on the market. The recent coronavirus pandemic may be one such disease.

Cryptocurrency Trading Methods

• Day Trading : Take advantage of many short-term trades throughout the day. In this method, the trader opens and closes all orders within one daily session to avoid the risk of fluctuations between sessions. Some of the best cryptocurrency exchanges for day trading are Coinbase and Kraken.

• Scalping - hundreds of trades during the day with a minimum price drop to reduce risk. In this case, the trader places much smaller orders rather than large lots. The profit per trade is small, but the overall results can be significant.

• Swing trading : benefit from long-term price volatility. Here, an investor buys a cryptocurrency and waits for its value to rise and then makes a profit.

Big Mistakes in Cryptocurrency Trading

Engaging in cryptocurrency is very risky, especially if you are new to the world of trading. In many ways, this is uncharted territory. It also doesn't help that the cryptocurrency industry is heavily unregulated; Many scammers try to scam people who are just starting out. Due to a lack of knowledge, some inexperienced traders make avoidable mistakes that cost them money. Here are some of the biggest mistakes a newbie can make.

Risk more than you can afford.

Be careful not to invest all your savings in cryptocurrencies and do not take out loans that you will have to repay sooner or later. Such discussions lead to hasty decisions and inevitable losses. So only invest what you can afford to lose.

Don't diversify your portfolio.

Many new investors make the mistake of putting all their eggs in one basket. They can invest all their money in one cryptocurrency or trade multiple coins. This is very risky because you can lose all your money if something happens to these assets. To mitigate these risks, you need to diversify your portfolio by investing in different asset classes. Thus, if an asset loses value, you have other assets to cover the losses. It's also a good idea to invest in a mix of existing and new investment options. This not only diversifies risks, but also allows you to invest in promising projects in advance that can bring great returns in the long term.

Lack of planning and strategy.

You need to learn your strategy and follow it even if other traders start selling falling coins. Ask any successful trader at the beginning of his career and he will tell you that he "drained" his savings over and over again before he learned how to trade properly.

Invest without research

One of the most important things you can do before investing in an asset is to learn about it. This is especially true for something as complex and volatile as cryptocurrency. If you don't understand what you are investing in, you can make bad decisions and lose money. Take the time to learn about the project, the team behind it, the market opportunities it is pursuing, and the competition it faces. This is the right way to make an informed decision about whether to invest in an asset.

Succumbing to emotions (greed, fear)

This phenomenon does have a name. Fear of missing out is a powerful psychological force that pushes people to make rash decisions. In the context of cryptocurrency trading, FOMO forces investors to buy assets in the hope of not losing more profits when prices rise.

While it is true that the prices of some cryptocurrencies change so quickly that even experienced investors find it difficult to control their emotions, remember that most trading mistakes are usually caused by panic, fear, greed, etc.

As Adam Draper, founder of Boost VC and venture capitalist, says, “Fear is a hell of a drug.” It is better to wait until the end of the price correction and enter the cryptocurrency market with the hope that the trend will continue. Try to look at your investment strategy in the long term and focus on building a portfolio of high quality assets rather than chasing short term returns. You should also be aware of the risks associated with investing in new crypto projects.

Forget learning from mistakes

Everyone is wrong. However, it is good to remember this wonderful quote:

"Only those who do nothing are wrong! Don't be afraid to make mistakes - be careful not to repeat mistakes!"

Theodore Roosevelt

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If you are wondering how to buy cryptocurrencies to trade, you can always use StealthEX for a simple and jail-free crypto exchange. You can buy cryptocurrency in person and without a subscription to the service. Our portfolio of cryptocurrencies includes more than 700 different coins, and you can transfer them from one wallet to another instantly and without problems.

Go to StealthEX and follow these simple steps:

1. Select the pair and the amount you want to exchange, for example, BTC to ETH.
2. Click on the "Start Trading" button.
3. Enter the recipient address for your cryptographic transfer.
4. Transaction processing.
5. Get your cryptocurrency.

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Be sure to do your research before buying any cryptocurrency. The views and opinions expressed in this article are solely those of the author.

Tags: bitcoin ethereum cryptocurrency market how to buy cryptocurrency investment in cryptocurrency
Easy and safe crypto trading methods for beginners first appeared on StealthEX.