How to make profits by trading Cryptocurrencies?

How to Trade Cryptocurrencies: Key Points and Tips

The cryptocurrency market is pretty new and there are a lot of people who don’t know anything about it.

Except for traders. Most of them added cryptocurrencies to their portfolio right from the start.

Why? They noticed that there is another way to make money – trading Cryptocurrency.

So how many people actually trade in cryptocurrencies and receive heaps of money every day?

As you probably know, the first digital asset, Bitcoin, was created in 2009.

After that, various projects around the world offered more and more alternatives such as Ethereum, Litecoin, Ripple, and others.

According to Coinmarketcap, there are more than 2,000 cryptocurrencies.

Active traders are spoiled for choice.

However, less active or new altcoins may have limited trading opportunities.

They offer fewer buyers when the time to sell.

Traders want to be sure of their success, so very often they only focus on some of the leading cryptocurrencies.

But how do you define the value of the various projects?

Crypto coins are created using computerized algorithms, also known as mining.

A lot of computing power is required to produce new coins.

The higher the hash rate of any blockchain, the more transactions it can process.

This translates into higher demand and higher value.

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What does it mean to trade Cryptocurrencies?

In general, trading is an extremely complicated activity.

It’s not just about money and math, it’s also about stress, information processing, quick decisions, and cold-blooded action. Warren Buffet, George Soros, and Steven A.

Cohen make money these days because they understand how the market reacts to various facts.

That’s why you understand how to act.

Michael Novogratz is one of the most successful cryptocurrency traders.

He made his fortune with Bitcoin, Ethereum, and various ICOs. How? He understood trading in cryptocurrencies.

In 2013 he said: Invest some money in bitcoin. Check back in a few years and your investment will be well worth it.

He was definitely right because at the time Bitcoin was trading at around $ 200 a coin.

In 2017 the price reached a value of $ 20,000. Even now it’s well over $ 200.

The returns on the investments in cryptocurrencies that Novogratz made turned out to be incredibly high.

How does Cryptocurrency trading work on StormGain?

How does Cryptocurrency CFD trading work?

The main concept is almost identical to the stock or currency market.

They buy/sell an asset for someone else because they believe that the cryptocurrency you have bought will increase in value.

Trading cryptocurrencies is all about making money with the help of a CFD trading account or simply by buying and selling various coins on an exchange.

A CFD is a derivative that enables profits from changes in the rate of cryptocurrencies without the associated cryptocurrencies becoming property.

You can take a “long position” (to buy) if you think the price of a cryptocurrency will rise, and a “short position” (to sell) if you think it will fall.

You need to make a deposit to start trading.

Working with an exchange means that you must first buy a cryptocurrency on that platform.

You need to create an account, verify it and then open the position.

As usual, you need to keep your assets in the wallet of the exchange.

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Mechanism of Cryptocurrency Trading

If you want to make as much as you can, you need to know this.

Be ready for what comes next: we can deliver the theory and share the experiences of others, but you can only see the big picture if you practice on your own.

First, you should learn some basic principles:

• Trading in cryptocurrencies is similar to real stock exchange trading, but it is not part of a regular exchange;
• It’s a 24-hour market;
• The crypto market is particularly volatile.

Second, you need to understand the standard way of working with crypto exchanges:

1. Traders send their existing coins to an account with an exchange or use the platform to buy cryptocurrencies.
2. You observe the prices of other assets available on an exchange.
3. You choose the trade you want.
4. Then the trader place buy/sell orders.
5. The platform finds a seller/buyer who matches the orders.
6. An exchange completes the transaction.

An exchange platform charges a fee for every trade.

Usually, a trade costs around 0.1%, which is too much. Why? Because the daily volume is over 55 billion dollars.

A few “lucky” ones made a lot of money with it.

There is one final fundamental thing to understand: Traders are not just using their math skills.

Seasoned traders know that in such a huge market, it takes more to make money.

Hence, they use many different programs to help choose the right assets at the right time.

This can be software that helps analyze the market.

Financial engineering is the use of innovative technologies to analyze more statistics in less time.

It helps to invest in the best sectors or currencies.

You are either a seasoned stock market trader or you are new to the field and do not know how to start trading cryptocurrencies.

Stock market traders have only one privilege in connection.

They know their way around technical analysis so they don’t need to learn the basics about trading.

But even if you are fully motivated and want to see the algorithm to use on an exchange, you are not ready yet.

First, you need to learn some vocabulary. It will give you some understanding as you learn how to trade cryptocurrencies.

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How to buy and trade cryptocurrencies

You are almost ready to make money. But if you want to get something, you have to give something for it.

This rule applies to crypto trading. You need to send fiat money (or cryptocurrencies from your wallet) to the exchange.

1. Set up an account with an exchange.
2. Verify it.
3. If your budget is fiat money, you need to choose a payment method.
4. Verify your identity (if necessary). Usually exchanges require this due to the AML (anti-money laundering) policy. The other reason is security: exchanges fight with trading robots.
5. Deposit funds.

So how do you trade cryptocurrencies?

Now try to answer this: How do you trade cryptocurrencies? People will ask you about this every time they talk about trading.

So, short-term or long-term?

How to buy, sell and exchange Cryptocurrency on StormGain?

Merit and Demerit of Short Term Trading

The short term is about buying an asset only to sell it again after a short while.

Usually, beginners think it’s after a few minutes or hours.

In fact, this can be anything from a few seconds to a few months.

Perhaps you are buying a particular cryptocurrency because you believe that its cost will increase in the near future.

The main benefit is a good chance of making a large profit in a very (even extremely) short period of time. Why? Because the price of a cryptocurrency can triple overnight or within a few hours.

The fiat currency market cannot offer such opportunities as rates typically only change 1% per day.

You can always find a buyer or seller. Oftentimes, people switch to short-term trading on large projects like Monero, Ethereum or Dash.

These cryptocurrencies are in great demand so you don’t have to wait for every single trade.

Volatility is the biggest problem in the cryptocurrency world.

When you take short-term positions, you need to spend a lot of time researching the market before trading.

Because of such volatility, you could lose all of your money in just a second.

You need to have a good grip on your mental health.

Trading short-term positions mean that you cannot always fold as a winner.

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Merit and Demerit of Long Term Trading

Long-term trading revolves around holding “HODL” positions. You will not have heard the word if you are new to trading.

HODL is the abbreviation for ‘Hold on for dear life.

It is not in the dictionary but describes all long-term trading.

Even if there is tremendous volatility, the price should rise over the long term.
benefits

First, you don’t need to do a lot of technical analysis using complex charts.

The recipe is very simple: you just buy and wait.

You can check the rate once a day and sell the cryptocurrency at the most convenient time.

Second, this type of trading does not require a large budget.

You can buy small quantities and let the value increase over a number of years.

Many people bought Bitcoin for $ 0.35 and forgot about it. Within 5 years you made a profit that was 60,000 times your original investment.

How could you miss a good chance for a short-term trade? Sometimes prices rise very quickly and then fall again within a few days.

However, if you have enough time and knowledge, you can combine long and short-term trading.

In long-term trading, you don’t spend a lot of time researching the market.

Because of this, you might miss some news that could affect the price.

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Type of Cryptocurrency Exchanges

There are many platforms out there so you need to choose which one is best for you.

There are some differences between them so it might be useful to do some research. Here are some things to watch out for:

• Available currencies (make sure the cryptocurrency you want to trade is available);
• Leverage (high leverage is not recommended for newbies, but is good for bigger gains);
• Hedging (provides insurance and reduces the chance of loss; good for beginners);
• Minimum investment;
• Support (you will surely have some questions, so choose a platform with good staff).

You should also review feedback, any security issues, and the history of exchange.

Do not work platforms that cast doubts for different reasons.

There are many good exchanges such as Poloniex, Kraken, or Binance.

You can choose one of them and start trading.

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The best Crypto Digital Wallets for trading

When choosing a “digital wallet” you should analyze its history as well as any security issues.

It defines the future security of your investments.

We have analyzed the market and made a list of the best crypto wallets to trade.

The final decision will be based on security, the number of cryptocurrencies that can be held, and the fees.

• Coinbase;
• Exodus;
• Copay;
• Jaxx;
• FRG;
• Ledger Nano S, Trezor and Keepkey (for long-term trading).

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How to know when to trade cryptocurrencies?

How do you trade cryptocurrencies? That is, how do you do it? Trading cryptocurrencies is complex and risky.

The theory is not enough to be successful in this market.

Trading is based on the analysis. There are two types: technical and fundamental.

The first is about charts. You have to learn everything about trends, price developments and the various figures in charts.

The second is about the news.

Follow the information portals on the subject of cryptocurrencies to find out everything as quickly as possible.

1. Crypto trading signals

This is about technical analysis.

Crypto trading signals are trading ideas or suggestions for actions on the exchange.

They are generated by professional traders or by software. You can also find these signals yourself.

However, if you lack the knowledge, it is better to pay for a subscription.

You will lose less with expert advice.

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2. Market analysis

The crypto market moves based on supply and demand.

Nevertheless, due to the decentralization, it is free from politics and the world economy.

However, there are still many factors that influence this market and can change prices dramatically in an instant – these include:

• The capitalization (the value of all coins);
• Press releases (the media defines almost everything that happens in the financial world – so keep an eye on the news);
• Integration (how different payment systems and exchanges relate to each cryptocurrency);
• Important events within the project (update, changes in security, attacks by hackers and others).

Market analysis is also known as fundamental analysis. It is very important in trading. This determines your success.

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How to get started with StormGain?

StormGain is one of the crypto exchanges that you can start trading on very quickly. You can start in 4 steps:

1. Create an account via email, choose a password and verify it.
2. Make a deposit with fiat money or a cryptocurrency.
3. Analyze the market.
4. Open a position.

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5 golden rules for trading cryptocurrencies

We can’t tell you all about cryptocurrency trading.

Why? Because it’s about the experience. You need to practice to double or triple your capital.

That is the first and most important rule. Simulate it until you can.

Next, you should analyze as much as you can.

Whoever owns information owns the world.

You can’t be a good trader if you don’t know all about the market.

Do not act more than your capital allows.

You should never forget real life. If you don’t have enough money to pay for dinner and taxes, you won’t be clear about how to make the right trading decisions.

Know and understand the cryptocurrency that you are buying.

Even if your portfolio consists of 30 different coins, you should know everything about each one.

This is the only way to invest appropriately.

Finally, remember that there is no shame in losing sometimes.

You can’t always win. So if you lose, keep your cool.

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