5 Easy Steps to Start Crypto Trading

Published in

Game of Life

6 min readOct 3, 2019

Cryptocurrency is trending again. Spring-summer 2019 can be easily labeled “Bitcoin time”, which began its strong rise, while was preceded by the so-called crypto winter; having reached its peak of $19,909 in December 2017, Bitcoin quickly started to drop in value. The bottom of $3,228 was reached in November 2018, after which the situation quieted for eight months. But in May 2019, Bitcoin started to grow rapidly, surpassing the $10,000 mark and returning into the global media spotlight.

Many people, who did not get acquainted with the world of cryptocurrency back in 2017, started to take an interest in Bitcoin, blockchain and cryptocurrency market in general. Search engine charts support this statement.

1. Choose the currencies you trust. Understand how they work

Many investors recommend investing in businesses in which it clear how they operate. This, to a certain extent, gives understanding and confidence in the probable reasons for future growth. The same applies to cryptocurrency. Understanding the actual concept of a specific blockchain and its future prospects can help you to identify investment scams. Also, you will be able to predict more adequately what to expect from the project during the next few months.

Reading through the project’s whitepaper is a must if you want to invest confidently in cryptocurrency. Don’t forget to also examine the projects’ roadmap for consistency of the team’s statements and their implementation. The latest news can usually be found on the project’s Twitter or official blog.

2. Choose your investment strategy — long term or short term

In the currency market, you need to be able to give an account of your actions. Thoughtfulness and adherence to your strategy can give you an advantage over other market participants. The main thing here is to decide for yourself what behavioral approach you will adopt: rely on fast-growing currencies or go for the long term.

Each strategy has its pros and cons. Short-term trading distance generates small quick profits. Moreover, taking into account current realities, it is tough for a regular trader, especially a newcomer, to compete with trading bots, which mathematically simulate the near-term situation. For the time being, many people have managed to bypass them; however, the number of such experts is decreasing.

Always keep in mind that a long-term strategy usually does not produce a fast profit, but it can ultimately result in a much more worthy reward for the patient trader. The simplest example is the aforementioned situation with Bitcoin. Those who bought the coin in November 2018 for $3,000 and did not sell it before the beginning of summer were able to increase their income threefold. Though, in many respects, this strategy is as risky as short-term trading.

But there’s a compromise. Some traders suggest building different types of cryptocurrency portfolios. One for quick trades and fast-growing currencies, which also rapidly might drop in value. The second one for long-term investments, to which you can add coins that do not grow so dynamically, but due to strong trust in the project, they will be able to bring results in the long-term. Such portfolios can be left untouched for months, calmly following their development

3. Follow the signals and market news

Currency fluctuations always depend on market news. And this applies not only to cryptocurrencies. Facebook shares sag after almost every scandal related to personal user data. The same applies to the cryptocurrency market.

The majority of investors give in to the general panic and start to sell such assets, drastically lowering the exchange rate of the coin in question. On the contrary, many traders often use this situation to buy these assets at a temporarily low price. But it is better to take this step being confident in the prospects of future growth of the coin. Monitoring the crypto news can help you build this confidence.

*Many crypto-enthusiasts start their day with* *this site*

The leading websites that you can rely on in the cryptocurrency market are — Cointelegraph, CoinDesk, Crypto Bloomberg, CCN.

Also, do not forget about the projects’ blogs. They can sometimes contain important information that has slipped away from reporters’ attention but can give you insight into the future of the project.

4. Diversify your investments

The entire cryptocurrency market cannot grow at once. Some currencies will drop, while others, will increase in price during the same period. In such circumstances, many recommend balancing the cryptocurrency portfolio in advance. It means that when one currency drops in value, another coin will have to compensate this through its own growth.

In such moments, it is important to keep track of the total portfolio volume and to adjust the ratio of currencies to each other.

5. Never panic

The essence of trading is to try to predict the next market trend and earn on it. Every day you will need to analyze the situation and make assumptions about the development of events. These assumptions will not always come true.

*This is what happened to ETH in the last May. A sharp drop has turned into equally strong growth. Guess who won?*

Summary

Cryptocurrency investing may seem complicated and incomprehensible, especially if you are a rookie crypto-enthusiast. That is why it makes sense to practice first, before you try your hand on the real crypto exchange.

But how to do that? For example, by using Plutus Wallet — the cryptocurrency portfolio simulator. One of its main features is the ability to create and manage virtual portfolios without any deposit. Plutus Wallet works with live exchange rates directly from the HitBTC and Binance exchange. It allows you to test your investment strategy without any risk.

You can try Plutus Wallet for free by downloading the application from Google Play or AppStore or use the Desktop beta version instead.