Want to Become a Successful Crypto Trader? Here Are Some Expert Tips

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The world of trading has changed dramatically over the last decade, most noticeably due to the introduction and growing popularity of cryptocurrency trading, which has made the sector more inclusive. 

Online crypto exchanges and brokers provide the tools and security for traders to achieve high volumes of trades daily. For this reason, crypto trading is an attractive proposition and the ranks of crypto traders are growing.  

If you want to change your career and become a full-time crypto trader or just try it out with a small fund, there are some things you will first need to know about trading cryptocurrencies.

Traders should follow a process starting off with a research phase on the different currencies on the market and their recent trends.

Next, comes the planning phase where target currencies are chosen and strategies are set according to a budget, experience and amount of risk you’re willing to take.  

The final phase is the trading of cryptos itself, often traders will use online exchange platforms such as eToro or broker sites to track the performance of cryptocurrencies in real-time and make fast and secure transactions. 

Beginner crypto traders can find it easy to pick up the basics of trading using crypto trading software, however getting to the point of making worthwhile profits will take time, lots of practice and the adoption of many tips and tricks. With that in mind, here are some expert tips to help you improve your crypto trading skills. 

Research Cryptocurrency Trading

Before you start trading crypto, it is a good idea to get an understanding of exactly what cryptocurrency trading is and what the main currencies are. For any beginner trader research is a key starting point, which is exactly where crypto expert Kevin Groves, the founder of hedgewithcrypto began after been recommended crypto by a friend. He later went on to share his knowledge of cryptocurrencies and experiences trading to help other budding traders. 

When researching crypto trading, the first thing to look up is basic information about different cryptocurrencies. Details included in your research should cover the founder’s and investor’s backgrounds, the level of market capitalization, supply level and distribution.

Market capitalization refers to the market value of a cryptocurrency and determines how much investors will pay for crypto. A currency’s market cap is also affected by expectations of future performance. Most new cryptocurrencies have low market caps whilst long-established coins will have market caps in the billions. Cryptos with lower market caps are much more affordable to invest in and a good choice if you can wait for a currency’s value to increase over time or are happy with smaller margins. 

Before leaping into trading, it is also advisable to build a basic knowledge of cryptocurrency trading strategies and tactics. Although at some point you will want to practice what you have learned, and it is essential to get experience, it is best to start with a smaller budget and focus on safer trades. 

Write A Detailed Trading Plan 

Getting down a well thought out trading plan is a critical step in becoming a well-versed crypto trader. At this point you will have to decide what kind of trader you want to be, usually, people opt to be day traders. A popular strategy, day trading crypto can involve a large volume of trades with small profit margins which can then add up to a reasonable sum at the end of the day. 

Most importantly, you should include your trading strategies and tactics in your trading plan in addition to deciding which online exchange platform you will trade on. Even though day trading is probably the most popular trading strategy, there are two other strategies used by crypto traders, margin trading and position trading. 

Margin trading is when a trader borrows from a broker to buy crypto, which they hold for some time until the value of the currency rises. At this point, the currency is sold and the trader keeps the margin between the value of the loan and the market value of the currency. 

A longer-term strategy is position trading, this is when a trader buys a currency for a low price and then waits months or years for the cryptocurrency to mature in value before selling it. 

Whichever trading strategy you decide on, it is always smart to make a business plan based on research, your capabilities and insights into what is happening in the tech and crypto worlds. 

Use A Secure Crypto Wallet

A cryptocurrency wallet is a must before buying your first cryptocurrencies because it will protect your coins from hackers and scammers. Although digital wallets are very secure they can still be used to make fast transactions at any time from around the world. The main security features of digital coin wallets are encryption and private keys. Choosing a reputable and well-trusted wallet is vital to becoming a successful trader as you need somewhere to store your assets. 

Sign Up On The Right Crypto Exchange For You

One reason why crypto trading’s popularity is growing may be down to the ever-expanding number of cryptocurrency exchange platforms. When looking for an exchange, you should consider which currencies are available and the functionality of the tools. The most used exchanges provide a secure platform with low fees, fast trading and payouts, and responsive customer service. 

Track and Analyze Trades 

The effective tracking and analysis of your trades and market trends can lead to greater successes. After each trade, regardless of whether you made gains or losses, it is a good idea to record the trade information to assist with future analysis of your trading performance. The tools provided by most exchange platforms can be of great help when tracking trades and analyzing market trends. 

Analyzing the crypto market will provide you with solid insights so that you can make informed trading decisions. One market analysis method is to study past statistical trends, however, you must make conclusions quickly as the crypto markets can be quite volatile. 

The benefits and rewards of becoming a successful crypto trader can be huge, but first, an individual must put in some hours of homework and planning, then ensure they are using the tools available to them on an online exchange to make profitable trades. Fortunately, this process can be much easier if you follow a step-by-step guide and check out all the useful tips on how to become a successful crypto trader. 

 

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Adam Tanton

Adam is a partner in B2BNN with over 15 years experience in the enterprise technology field.