Category: Crypto Trading

Introduction

So, what is the best trading platform for crypto? Well, this is quite an open-ended question. There are several hundred crypto exchanges on the market currently. New ones continue to pop up as more coins are released, the number of which is above 20 000.

So, it’s clear to see the range is enormous. Fortunately, we are here to narrow your search by focusing on five options for the best trading platform for crypto and what makes them exceptional.

What is a crypto trading platform?

A crypto trading platform (or a crypto exchange) is a business that offers a facility for trading digital currencies. Like an options or stock exchange, a crypto exchange connects buyers and sellers on a central platform.

Think of it like a ‘matchmaking service.’ Exchanges use an order book, a matching engine displaying a list of orders at different prices for each coin.

When you want to buy at a certain price, the platform will match your request with a sell order (and vice versa).

Once it has fulfilled this transaction, it will levy a small commission for making this trade.

Most crypto exchanges use a commission structure called the maker-taker system. A ‘maker’ fee refers to an order that adds to the order book, while a ‘taker’ fee refers to an order that removes liquidity from the order book.

This is charged as a percentage of your trading volume over a month; the higher this is, the lower the commissions. The industry average is 0.25% for maker fees and 0.20% for taker fees.

Of course, these are not only the costs to note when seeking the best platform for trading crypto. You should consider potential:

• Network or gas fees (when receiving or sending coins through a particular blockchain)
• Deposit and withdrawal fees (for non-crypto payment methods like cards and bank wire)
• Staking fees (when you invest your coins in a staking program)

Most exchanges also provide an in-built wallet, where clients can hold their coins safely and use them for spot trading later.

Now, not all trading platforms are exchanges. We also have brokers that, like forex brokers, charge a spread instead of a maker/taker fee. The key difference between a broker and an exchange is the absence of an order book.

The broker sets the prices and orders are executed between them and the trader (rather than between buyers and sellers). Also, brokers cannot offer 24/7 trading like exchanges.

So, what are the key features to observe when looking for the best crypto platform for trading?

• Top security: regulation, data encryption, identity verification, two-factor authentication, cold storage
• Wide selection of coins: the best trading platform for crypto should also include newer tokens regularly.
• Different trading types (spot trading, margin trading, futures trading, etc.)
• Broad range of payment methods (crypto and fiat-based channels)
• Reasonable fees (be mindful of any hidden charges)
• Inclusion of a wallet

Best platform crypto trading: top 5 options 

So, we’ve covered the basics. Now, let’s answer the question of ‘what is the best platform for trading crypto’ with 5 choices you can consider.

5. PrimeBit

Features:

• Anonymous trading (no KYC needed)
• 8 crypto markets available
• No minimum deposit
• No deposit fees
• 0.02% maker fees / 0.05% taker fees
• Perpetual futures with 1:200 max. leverage
• Crypto-based deposits/withdrawals only
• Built-in wallet
• Email and live chat support

PrimeBit is a relatively new digital currency trading service from Saint Vincent and the Grenadines launched in 2019. It offers trading in crypto, stocks, metals, commodities and indices.

PrimeBit is the best trading platform for crypto when it comes to high leverage. You can gear your account up to 200x on their perpetual futures. What’s also unique with this platform is no identity verification or KYC (Know-Your-Customer) is needed.

So, you can get started with a name and email address. Therefore, in the true spirit of crypto, you remain anonymous.

Pros:

• Offers some of the highest leverage in the industry
• No minimum deposit amount
• No KYC required
• Provides a demo account
• In-built wallet

Cons:

• Limited crypto pair selection
• Restricted payment methods
• Some risks with offshore no-KYC trading platforms

4. KuCoin

Features:

• +1400 crypto markets
• 10 payment methods available
• Maker and taker fees of 0%-0.10%
• Spot, margin, futures trading
• Crypto lending
• Staking
• Trading bot
• Mining pool
• KCS utility token for trading discounts and other incentives
• In-built wallet (which can also hold NFTs)
• 24/7 customer service (including live chat)

KuCoin, which dubs itself as ‘The People’s Exchange.’ is a large crypto exchange founded in 2017 in Singapore. The service is an all-in-one trading, derivatives and earning platform. It contains a host of exciting features like spot/margin trading, staking, lending, NFTs, mining pools, etc.

KuCoin allows for non-KYC trading, but withdrawal limits exist apply. The exchange has its own utility token, KCS, that offers trading discounts, dividends, offers and more. 

Pros:

• One of the largest crypto exchanges by trading volume
• Impressive choice of coins available
• Provides many interesting crypto-related services
• Has utility token offering numerous incentives
• Many trading types available
• 24/7 customer service

Cons:

• Better suited for advanced investors
• Higher fees for fiat-crypto trades

3. Coinbase

Features:

• +500 crypto pairs
• Crypto and fiat-based payment methods (cards, Paypal, ACH, bank wire)
• Maker fees of 0-0.50%; taker fees of 0.04-0.50%
• Staking available
• Spot and futures trading available
• Coinbase Visa® Card with spending rewards
• Borrowing using Bitcoin collateral
• In-built wallet (which can also store NFTs)
• Email and phone customer support

Few can argue about Coinbase being the best crypto trading platform for US citizens (and even globally). The exchange is one of the oldest in existence, having started in 2012. However, while a massive entity, Coinbase is not as feature-rich as brands like KuCoin and Binance.

But, it offers enough services when it comes to trading coins and NFTs, spot and futures trading, and earning interest through staking.

Pros:

• Publicly-traded company that’s over 10 years old
• Regulated in the US
• One of the largest crypto exchanges in trading volume
• Broad choice of crypto pairs provided
• Offers an in-built wallet
• Staking and lending offered to earn rewards
• Phone support available

Cons:

• Known for high fees
• No margin trading provided

2. OKX

Features:

• +700 crypto markets available
• 0.08% maker and 0.10% taker fees
• No minimum deposit
• Crypto and fiat payment methods
• Provides spot, margin (10x max leverage), perpetual swaps, futures (both 125x max leverage), and options trading
• Trading robot offered
• Mining pool
• OKB utility token
• Staking and lending available
• Built-in wallet for coins and NFTs

OKX is an innovative Seychelles-based crypto exchange founded in 2017. Like Coinbase, many consider it the best trading platform for crypto. But unlike Coinbase, OKX is an all-encompassing facility with several crypto services.

This includes spot, margin, options, futures, DeFi, mining and lending services, among other features. In addition, OKX has its own utility token, OKB, offering trading fee discounts, savings returns and other exclusive perks.

Pros:

• Massive exchange by daily trading volume
• Various customer support options
• OKB utility token
• Offers many trading types
• No starting balance
• Low trading fees

Cons:

• Complex fee structure

1. Binance

Features:

• +1600 crypto markets
• Provides basic, classic, advanced, margin, OTC, and P2P trading
• Maker and taker fees of 0%-0.10%
• Crypto lending and staking
• Liquidity farming
• BNB utility token offers fee discounts and incentives
• Mining pool
• Built-in wallet for coins and NFTs

It was a close tie between Binance and OKX, but we consider the former the best crypto trading platform. Binance is the creation of famous Chinese entrepreneur CZ, who founded the company in 2017 in China.

By the start of 2018, Binance was the largest exchange globally and has consistently retained that status. Binance is also one of the few crypto trading platforms operating in the US. 

Overall, Binance is a super-complete crypto trading service for all your needs, whether you’re a beginner or an expert.

Pros:

• Has consistently ranked as the world’s largest exchange by volume
• Several trading types offered
• In-built wallet
• BNB utility token
• More expansive market selection compared to the other platforms
• Reasonable trading fees

Cons:

• More suitable for advanced investors

Conclusion

One massive advantage over markets like stocks (where the trading hours are limited) is that you can trade crypto 24/7. However, digital currencies offer many benefits, like freedom from the traditional finance system and decentralisation.

Still, as with any instrument, there are many risks with crypto. So, you must be as knowledgeable as possible to survive and thrive. Fortunately, you can learn more about cryptocurrencies with this guide for beginners here. 

Introduction

Day trading is an avenue many professionals use to supplement their profits. However, much like any other type of trading, it comes with various risks. Day trading crypto comes with heightened risks due to how volatile the asset is daily. This is something we will be discussing in greater detail today. 

You may hear about short-term trading strategies, such as scalping, or long-term strategies, such as swing trading. Day trading is slightly different as it is a broader term. You can apply these strategies across a range of markets so that you can swing trade forex, and you can also scalp trade forex.

Cryptocurrency is different as it faces a different oversight than more established markets. Although the SEC in America seeks to provide more clarity for many cryptocurrencies, it doesn’t have the same rules and regulations as stocks or forex trading. For many, this is the leading factor that causes the volatility. 

The SEC has gone after some legitimately suspicious operators in the space, such as Do Kwon. However, they have also aimed at prominent innovators, such as Ripple Labs, who created XRP. We will explore these components today to determine whether day trading crypto is profitable or simply too risky.

Does Buying And Selling Crypto Count As Day Trading?

This may sound obvious, but if you complete your purchase and sale within the same day, this is the textbook definition of day trading. When day trading crypto, this may be slightly more open to interpretation as it is a 24-hour market. So long as you execute your position within the same day, irrespective of your strategy, this would be considered day trading. 

If you have decided to start day trading crypto, the next natural question from this point is, “what is the best crypto for day trading?” – a question many new traders ask themselves. Although there are more prominent cryptocurrencies such as Bitcoin and Ethereum, some traders believe the smaller cap cryptocurrencies offer a better opportunity to day trade. 

However, the most imperative thing to do when day trading crypto is to understand your asset and risk managing any trade you enter.

Do Research & Manage Risk

It doesn’t matter whether you are an institutional investor who deals with billions of dollars, such as an investment bank, or a retail investor trading with a few hundred dollars of your savings, such as a retail trader. Ultimately, if you do not research the asset you are investing in, you are gambling. Likewise, you are not performing adequate due diligence and preparation if you do not manage risk appropriately. 

Crypto day trading isn’t a guaranteed way to print money. No method of trading is, unfortunately. We would all love a crystal ball to perform our trades, but that’s not how life works. The only way to profit in this industry is to commit vast amounts of research and manage your risk effectively when in a live position. 

Even then, your capital is always at risk. Just because you understand the market doesn’t mean you will make money. This is something many professional investors understand. Crypto day trading strategies differ, but one thing they should all have in common is that the trader behind them ensures they manage risk. 

Effective Risk Management

There are several variables to weigh up to manage your risk effectively. It doesn’t just involve finding the best crypto exchange for day trading. This will not impact you negatively, but it is just one of many things you should do. There are two critical components to a solid risk management strategy:

• Dollar cost averaging
• Stop loss and take profit limits

Dollar cost averaging is when you continue to purchase your asset even if it depreciates. For example, let’s say you buy Ethereum at $1,000, and it then drops to $500, so you buy another one. Your average entry price is $750 – so if the price breaks above $1,000 again, you profit. This example may be better suited to long-term strategies, but it works for day trading, too, if the asset is volatile. It doesn’t get much more volatile than cryptocurrency.

Stop Loss & Take Profit Limits

Stop loss and take profit limits are measuring tools you set yourself to prevent loss or take profit. Negative emotions are critical in how much money you can lose whilst trading. If you set up a take profit and stop loss, you don’t need to be glued to the charts 24/7. If you’re looking for the best crypto platform for day trading, look for a service that offers the facility to set up stop loss and take profit limits. There are several reputable exchanges online that all offer this facility.

While day trading crypto happens over a certain period, you’ll be surprised how quickly an asset can hit these limits, given the volatility of digital assets. In addition, if your trade is going well, some people can allow positive emotions to hinder their strategy. For example, if Bitcoin flies up 10% in 24 hours, more often than not, it will be due a sharp retracement. 

People will hold, hoping for a higher price. Some will jump in at the peak in fear of missing out and getting hit by the retracement. Therefore, market knowledge is critical. 

Research Your Asset

If you are trading cryptocurrency, you must understand cryptocurrency and the individual asset you are trading. There are dozens of cryptocurrencies with a variety of utilities. However, some don’t offer any utility, which means they are a much riskier investment. 

Once you have researched digital assets properly, you will understand this is commonplace. Many cryptocurrencies get into the top 20 by market cap with little or zero utility. As a beginner, research is pivotal. 

Once you have this information, you can build an effective strategy. There isn’t one crypto day trading strategy that will help you more compared to another. Having a good knowledge of the way cryptocurrency works is an essential foundation.

As well as performing the necessary research, you must also understand the market. Broader market indicators include economic news that causes the price of cryptocurrencies to fluctuate. In essence, central policies shouldn’t impact cryptocurrencies as much as they do, but they do, and you need to be aware of this.

However, many prominent institutions and billions of dollars are now involved in the industry. As a result, central factors are starting to have a more significant impact. This includes a rise in interest rates, issues with inflation or general negative economic sentiment. One example of this is the cost of living crisis which contributes to cryptocurrency prices in a big way.

How To Pick Crypto For Day Trading

Regarding day trading crypto, you want to pick a strategy that works instead of a specific currency. For example, many people have made a lot of money trading Bitcoin. However, now that it is a multi-billion-dollar asset, the possibility of return is lower than some cryptocurrencies with smaller market caps.

Ultimately, the volatility is where the potential for profit increases. However, what goes up must come down and it works the same way. You can find plenty of stories online about investors and traders who have made a lot of money day trading crypto and then lost it all in a small timeframe. This can be through lousy strategy or just from not knowing what they’re doing in the first place.

Is Day Trading Crypto Worth It?

There are a variety of strategies that will facilitate making money in trading. Day trading crypto is worth it if you know what you’re doing; that’s the bottom line. Unfortunately, many people do not follow or understand the logic behind strategies or market movements and leave themselves open to significant financial loss. 

The best crypto day trading platform usually has high volume and low fees. However, different exchanges will have slightly additional fees. So it depends on the type of day trading crypto strategy you are using or the instrument you’re looking to implement. This includes tools or trading methods such as futures or options, so it is vital to perform this prior research. 

You need to know your capital is at risk, and even with vast knowledge, you are not guaranteed to make money. However, while there aren’t any day trading rules for crypto, so long as you apply the variables we have touched on today, you could begin to devise a strategy. 

Conclusion

While risk management strategies are always recommended, are there any day trading rules for crypto? The answer is not really. People who make money day trading crypto use different tools, strategies and amounts of capital. 

If you are in a fortunate enough position to make money from day trading crypto, then day trading crypto taxes are something you should look into. Other markets, such as forex, have rules for paying taxes. Finding out what regulations apply to your region before you begin day trading crypto is crucial.

Introduction

Trading cryptocurrency is one of the hottest topics in modern investment. However, the general mainstream consensus remains polarised regarding digital assets. More traditional investors are upset by the emergence of an asset with no centralized overseeing body. 

However, it only helps fuel the speculation, hysteria and mystery that clouds this emerging asset. Unfortunately, the global economy didn’t have its best year in 2022. Stocks suffered, the cost of living crisis squeezed many of our pockets, and the cryptocurrency market took a seismic hit. 

Investing in crypto for beginners and finding out how to take advantage of this volatile asset is usually the number one goal. We aren’t going to sit here and say you are only in the cryptocurrency space to make money. Given that it is so new and the vast possibilities, there’s so much to learn, and with that knowledge will come opportunity. If you take the time to understand the market you are investing in, you can make better-informed decisions.

Today we will be breaking down ways to trade crypto, how to begin investing in cryptocurrency and specific essential trading tools, such as how you get cryptocurrency from one exchange to another. This is specifically relevant when discussing methods such as arbitrage trading, which is something else we will discuss in more detail for you today.

What Is Cryptocurrency?

Starting with the basics, it is surprising the number of people who invest in digital assets without understanding the basics of how it works. Knowing where to start with cryptocurrency will be the first hurdle you need to climb. As it stands today, in early 2023, there are over 20,000 cryptocurrencies. Many of these digital assets have a variety of different functions.

Simply put, cryptocurrency is a digital currency that is secured by cryptography. The underlying technology is called the blockchain. The blockchain registers, verifies, and authorizes any transactions that take place. One of the critical features of the blockchain is that it cannot be amended and can be viewed publicly at any time. 

Therefore, it simultaneously removes the need for a central bank or third party to facilitate a secure transaction. In addition, it increases transparency and makes sending currencies more efficient. 

As there is no need for a central authority to provide a platform for these types of transactions, this is where the term “decentralized” comes from. A decentralized system does not rely on any central authority or government. 

It is an autonomous function that relies on the blockchain as the sole level of security. Up to now, this security method has been invaluable, and other industries are using blockchain technology outside of finance. The use will likely accelerate as time moves forward.

The Creation Of Bitcoin & The Origins Of Cryptocurrency

The first cryptocurrency devised was Bitcoin back in 2008. The whitepaper was written by an anonymous cryptographer who goes by the name of Satoshi Nakamoto. The designer of the innovative and original cryptocurrency is still unknown. Some believe it may be a group of designers or just one sole individual. Either way, the landscape of investing and finance has been changed forever thanks to the technology created all those years ago. 

Bitcoin investing for beginners might be the ideal place to start if you are new to the space. The reason is that Bitcoin has plenty of visibility and is the most traded digital asset among large institutional investors, such as Tesla and Blackrock.

These multi-billion dollar companies that hold trillions of assets don’t just directly purchase Bitcoin. They also know how to invest in cryptocurrencies that operate successfully within the space. This is just one example of how to invest in cryptocurrency stock. Although many potential Bitcoin ETF ideas have been considered, the SEC in America is yet to approve one. Once an ETF is approved, tens of billions could quickly float into the digital asset space.

How to invest in Bitcoin for beginners revolves around learning how charts shape up, the analyses that professionals use and what sort of news can drive the market in either direction. So we will look at this in more detail in the section below.

Common Methods Of Trading

Starting cryptocurrency trading can be overwhelming at first. To learn how to trade crypto, understanding how the markets work is the first port of call. It doesn’t matter whether you are looking to trade crypto in general, how to trade crypto on a grander scale or how to invest in cryptocurrencies in a broader fashion (such as altcoins) – understanding analysis is vital. 

Some experienced traders will use specific technical analyses such as the diamond chart pattern. However, investing in cryptocurrencies for beginners involves more basic methods. For example, swing trading is one of the most common methods that novice traders use to understand the market. 

It doesn’t use higher-risk positions like leverage or more complex chart analysis. Instead, it is simply identifying the price of an asset that is low, purchasing it, and then selling it for a higher price. A swing trader can hold on to an asset for days, weeks, months or sometimes years. 

Holding an asset for a while will give you the necessary experience you need to assess charts, find out how they operate over the course of a day and how to plan accordingly. So, if you have spent some time dwelling over questions such as “how do I invest in cryptocurrency?” hopefully, we can shine some light on this trading area for you today.

Risk Management

If you are learning the basics and how to start investing in cryptocurrency over any period, whether it be short, medium or long-term, risk management is critical. This applies across a whole host of markets. Even if you trade across a host of markets and assets and you have a diversified portfolio, which in itself is a risk management tool, it is a good idea to read up on how you can protect your portfolio in the event of a market downturn.

Cryptocurrency investing for beginners involves several strategies. It doesn’t just apply to knowing how to read a chart. Plenty of the preparation is before you even execute your trade. As well as diversifying, there are other effective strategies that investors use. This includes dollar cost averaging and setting up take profit and stop loss limits. 

Sitting and watching your asset continue to print profit for you is not a good idea. It might sound like it doesn’t have negatives, but this mentality can cause you to lose money in the long run. One of the key reasons people trade crypto is the opportunity the volatility provides. This can work as an advantage and a disadvantage. Setting up a take profit limit is something all successful traders do once they are live in their position.

It is a disadvantage because people can get drawn into the emotions of trading and think the profits will continue to rise. However, many experienced traders will tell you things can turn around very quickly in cryptocurrency. 

Just one piece of bad news can send the market tumbling, or it can send it to new highs. Knowing what type of news to look out for can help your risk management and overall trading psychology. 

How To Trade Crypto Effectively

As we have established, crypto investing for beginners can be a difficult market to navigate. Therefore, risk management is critical to imprint into your overall philosophy. However, once you have implemented this and know how to start with cryptocurrency basics, you can then use this as a springboard to trade crypto.

Much like any market, you must know what you are investing in, whether you are trading gold or other commodities such as silver. We don’t know every professional commodity trader personally. However, we could say with a fair degree of certainty that they do not blindly buy and sell their commodity without performing due diligence. This includes research, chart analysis and understanding of the product itself. 

Allowing yourself time to understand cryptocurrency is critical. This is a bad idea if you enter the cryptocurrency market without knowing what Bitcoin is. You also need to know the answers to essential questions, such as

• What are altcoins?
• What is a smart contract?
• How does the blockchain work?
• What is a market cap?

If you can’t answer these four questions, you are essentially gambling. 

This may sound harsh, but if you do not understand what you are investing in, you will eventually lose all of your money. Knowledge is vital. When your money is on the line, you want to be sure that you’re treating the cryptocurrency market with the respect it deserves.

Other Chart Analyses To Trade Crypto Efficiently

There are dozens of chart analyses that traders use. You do not need to imprint them all into your memory. Using these tools alongside other tools to complement your trading knowledge gives you the best chance of success. Ultimately, turning your venture into a passive income stream is the goal. However, there are many things to consider if you trade outside your full-time job.

Due to the rise of the internet and mobile phone accessibility, there are now plenty more retail traders than ever before. Platforms such as MetaTrader have exploded in popularity following the widespread accessibility of the internet and smartphones. 

You can use the internet to your advantage by sourcing news specific to the digital asset you are invested in, and you can also use it to study detailed chart analyses. You can also check out our guides on some of the other chart patterns you can find, such as

Head And Shoulders Pattern

Triangle Patterns 

The Doji Star

Heikin Ashi

Japanese Candlesticks

Bear Flags & Bull Flags

Other Avenues To Consider

You can find more information on each of these patterns in our guides. However, there’s plenty of literature you can access online. In addition, you can find books on other markets, such as forex, from traders who are successful in their field. 

As cryptocurrency is such a new area of investing and trading, learning how to trade crypto is something you can predominantly do online. However, you must be aware of the sources you are using. Ensuring they are verified to provide you with the advice you need to increase your knowledge.

For example, many traders and investors will offer advice on social media. Still, it is easy to get overwhelmed by this advice and know which investors to listen to and ignore. 

Many traders will have online communities where they will learn and build each other’s knowledge. In addition, more experienced traders will have strategies that work for them. Taking in experience and knowledge from all sources is usually good practice so you can get a good idea of how to trade crypto as a beginner.

The Future Of Crypto Trading

When it comes to knowing how to trade crypto, a large part of that knowledge stems from how to weigh up what sort of changes are on the horizon. There have been sensationalist headlines about major countries banning cryptocurrencies. In addition, black swan events, like the collapse of FTX wiping billions off the value of many cryptocurrencies, have also brought digital assets into the public spotlight for the wrong reasons. 

The collapse of FTX and the fallout that has ensued has pressured some of the world’s biggest economies to begin to regulate cryptocurrency properly. Some people believe this may signal the beginning of the end. However, many analysts think it could be the catalyst that invites big institutions to stake large amounts of capital in digital assets.

With the number of exchanges and avenues you can use to trade crypto, it would be difficult to imagine a scenario where cryptocurrency is heavily banned or crippled by regulation. 

In addition, some institutions have hundreds of millions in cryptocurrency. This includes financial institutions and private companies we discussed earlier, such as Tesla.

If the global economy continues to stagnate, this will also impact retail investors’ ability to trade crypto. Balancing the positives and negatives before you begin trading is essential in any field. Cryptocurrency is no different. 

Depending on the overall economic conditions, cryptocurrency could stabilize again and regain some ground it has lost over the last twelve months. 

Conclusion

Cryptocurrency has started off the year strong. After such a sharp retracement in 2023, many analysts and experts expected some bounce. Instead, however, just a month into the year, plenty of cryptocurrencies have bounced back to levels above what we saw before the FTX collapse.

To recap what we have discussed today. You must ensure that you understand cryptocurrencies before you invest in them. You must also understand what drives the market and know how to perform effective risk management. 

Looking at the internet and social media, it’s easy to find people who invested in assets they needed help understanding. Unfortunately, some of these people invested money they couldn’t afford to lose and ended up in financial turmoil. Learn from other people’s mistakes. Otherwise, you could make them yourself. To trade crypto with no research isn’t wise.

Quite a few traders have also retired under 30 due to their gains from trading. Knowing how to trade crypto includes all of this prior due diligence. However, it would help if you also implemented practical analysis when your position is live. In addition, you should know when to close it and the indicators to look out for on the horizon that could signal good buying and selling opportunities. 

Like anything in life, success doesn’t come overnight. It takes years of learning and practice. It usually involves losing money before you begin to make a profit. Any professional will tell you this is all part of the learning curve. 

Once you accept that these factors are in play, you will understand that a journey to trade crypto doesn’t involve shortcuts. On the contrary, if you can stomach the volatility and understand the assets, you are immediately in a better position than other novices.

Introduction

Crypto has been the trendiest financial instrument to follow over the past few years. Many people believe digital currencies are the future. But we are already in such an age, given how our lives have become increasingly digitized.

Of course, you need a reliable charting platform like MT4 to invest in this asset. Although digital currencies are complex, trading crypto on MetaTrader 4 is relatively simple. Let’s guide you through the whole process with this article.

MetaTrader 4 cryptocurrency trading: what is it?

To understand MT4 crypto trading, we, of course, must look at the two elements: MT4 and crypto.

MetaTrader 4 is a free-to-use CFD charting platform released by MetaQuotes, a Cyprus-based software corporation, in July 2005. As the name suggests, it is the fourth MetaTrader series and is the developer’s most successful product.

Crypto MT4 investing is relatively new. MetaTrader 4 remains heavily associated with forex, being the go-to standard in the industry (check out our guide comparing forex and crypto here).

Traders also love the platform for creating robots or expert advisors.

Here are MT4’s basic features:

• Number of trading instruments: 1024
• Number of time frames: 9 (M1, M5, M15, M30, H1, H4, D1, W, MN)
• Number of built-in indicators: 30 (more custom ones available)
• Number of graphical objects: 19
• Execution types: 3 (instant execution, market execution, request execution)
• Order fill policy: fill or kill
• Order types: 4 (buy stop, sell stop, buy limit, sell limit)
• One-click trading
• Strategy Tester
• Price alerts

This software is quite user-friendly, meaning that trading crypto on MetaTrader 4 is a breeze. Although the platform is less advanced than its competitors, it has enough technical tools for efficient charting.

Another advantage of crypto MT4 trading is that you can do it on numerous popular operating systems and browsers, whether mobile or on your PC. 

Crypto on MetaTrader 4 is one of many CFDs available on the platform. Depending on the broker, you can trade forex, stocks, futures, bonds, commodities, metals, energies, and more. 

MetaTrader 5 is MetaTrader 4’s successor, which was released in 2010 (check out our in-depth guide comparing the two).

Now let’s look at the second part of our equation.

A cryptocurrency is a digital currency built and maintained by a computer network. Whether used as a medium of exchange or a complex operation, crypto doesn’t rely on any central authority.

Bitcoin remains the most popular coin, being the first of its kind in 2009. Yet, we have over 22 000 cryptocurrencies, according to CoinMarketCap.

There are two methods of trading digital currencies: buying the actual coin from an exchange or speculating its price on a platform like MT4. The latter approach is what we refer to as a CFD (contract for difference).

It simply means the profits and losses from trading are settled electronically without transferring the underlying asset. When you buy and sell crypto on MetaTrader 4, you are speculating on the prices of real digital currencies like Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), Ripple (XRP), Litecoin (LTC) and many others.

Most of these markets are paired against the US dollar and euro on the platform (but some brokers offer more). So, when you observe crypto on MetaTrader 4, you’ll find a few of the following pairs:

• BTC/USD
• BTC/EUR
• ETH/USD
• ETH/EUR
• XRP/USD
• XRP/EUR
• LTC/USD
• LTC/EUR

Like any CFD or derivative, MT4 crypto investing is traded on margin. This leverage mechanism allows users to execute far bigger positions with a smaller balance. Given the high volatility of digital currencies, such a feature can produce impressive profits in a short space of time.

At the same time, it can magnify your losses just as fast if not used responsibly. Yet, the margin with MT4 crypto brokers is much less than margin in forex.

Choosing an MT4 crypto broker

Needless to say, you need a broker to trade crypto on MetaTrader 4. There are tons of these companies out there, with many adding digital currencies to their offerings each year. So, how do you choose the best broker? Here is what you should consider.

• Regulation: Let us first say that the crypto industry is largely unregulated. However, most MT4 brokers were licensed long before they started offering crypto. Therefore, you should stick with such firms to minimise any potential malpractice.

Ideally, your crypto MT4 broker should be regulated by any of these top-tier regulators (or the body relevant to your region):

– FCA (Financial Conduct Authority)

– ASIC (Australian Securities & Investments Commission)

– CySEC (Cyprus Securities and Exchange Commission)

– CFTC (Commodity Futures Trading Commission)

• Competitive trading costs: Like any financial product, trading crypto on MetaTrader 4 should be cost-effective. You’ll want to make a thorough comparison across multiple brokers when it comes to spreads (or commissions) and swaps.

Also, ensure that your broker doesn’t charge you for deposits and withdrawals. Additionally, pay attention to other miscellaneous fees.

• Range of markets: One drawback of MT4 crypto charting is the limited pair selection compared to what you’d find on an exchange. So, you’ll want to use a broker with as many crypto markets as possible.

• Excellent customer support: Any MT4 cryptocurrency should have a responsive live chat service to solve most queries on the spot. Of course, brilliant customer service also includes the ability to contact a call centre or email the company.

Additionally, receiving this support in multiple languages is advantageous for extra convenience.

How to add cryptocurrency to MetaTrader 4 (and place an order)

Firstly, you must sign up for an account with a crypto MT4 broker. A demo account is always the best place to start if you need to become more familiar with the platform. Once you have a proven strategy and a track record, you can consider a live account.

Either way, you will first go to the broker’s site and download the MT4 package. Once downloaded, open up the software, go to File > Login to Trade Account. The following screen will pop up, where you will enter the login details of your account:

This access will allow you to view all the instruments provided by the broker, not just crypto on MetaTrader 4. 

The next step is going to View > Market Watch (which you can also access with the Ctrl + M shortcut). Generally, this section will appear quite limited, but not to worry. Simply right-click on the tab and click on ‘Show All,’ revealing the broker’s entire market array.

Next up in looking at trading crypto on MetaTrader 4, head over to File > New Chart. You will scroll down until you see something that mentions crypto on the list, e.g., ‘crypto,’ ‘crypto 1,’ etc.

For our broker, we have opened the Bitcoin MT4 1HR chart for further illustration.

When placing an order, you can right-click on the chart, go to Trading > New Order (or use F9 for a shortcut). This action brings up the following screen:

Here, you can choose the volume, add a stop loss and take profit, add a comment and decide on the execution type.

It’s crucial that you apply a stop for each MetaTrader crypto position to keep your losses manageable.

The top-left corner of the chart (next to the ticker symbol) has a tiny up arrow. This feature is one-click trading, where you can automatically execute a position without going through the first process.

Of course, it is more convenient and a time saver. Yet, it is risky because you cannot add a stop loss before execution.

So, how do you see when you’ve placed an MT4 crypto trade? Simple. Once executed, simply access the terminal (by going to View > Terminal or pressing Ctrl + T). Here, you can view your order at a running loss/profit and other useful information about your trading capital.

Once you close your MetaTrader cryptocurrency position, you can view it by going to Account History on your terminal.

How to install an expert advisor on an MT4 crypto broker

Installing a robot for trading crypto on MetaTrader 4 is straightforward.

Firstly, have the file of your bot already in MT4’s data folder (check out this piece on how to do it).

Next, ensure the ‘AutoTrading’ tab has a green arrow, meaning any bot can run on your platform.

Then, go to View > Navigator (or Ctrl + N for a shortcut). This brings up a panel where you can see a list of accounts, installed indicators, scripts and, of course, expert advisors.

You will open the expert advisors folder, then click and drag the EA onto your preferred chart. After confirming all settings, the name of it should appear with a smiley face at the top right corner.

Pros and cons of trading crypto on MetaTrader 4

To round off our MetaTrader cryptocurrency discussion, let’s look at the benefits and drawbacks:

Pros

• MT4 is free to use: You can start trading a demo or live account on this platform without any monthly subscription.

• MT4 is popular charting software: Because there is no cost involved in using the platform, MT4 is quite well-known across trading circles. Furthermore, many brokers support it.

• MT4 is adaptable with other trading platforms: It is not only that you can use a crypto MT4 broker on multiple web, desktop and mobile systems. This software works across other services like trade analytics sites, simulators, copy trading services, etc. MT4 also requires less advanced system requirements to work.

• Simplicity: As previously, trading crypto on MetaTrader 4 is far less complex compared to other platforms. At the same time, the software is very reliable.

• Ease of developing robots: Many developers consider MQL4, MT4’s coding language, a simple framework for building crypto bots or expert advisors. It is similar to Java and C++.

• Reasonable minimum deposits: You can start trading crypto on MetaTrader 4 with some brokers for as low as $100. Yet, you will usually need a lot higher, considering the lower leverage, so you don’t blow your account.

Cons

Much of the drawbacks of MT4 crypto speculating revolve around the differences between crypto brokers and exchanges.

• Less transparency: All financial institutions that support crypto on MetaTrader 4 are brokers. We usually trade crypto on exchanges like Binance, Coinbase, OKX, etc. So, what is the difference between a broker and an exchange?

A broker is more internal, while an exchange is more public-facing regarding order execution. When trading with an MT4 crypto broker, you transact with them directly. They act as a middleman between you and another crypto dealer or take the opposite side of your positions.

On the other hand, an exchange matches your orders with other traders through a matching engine. You can view this information in real-time thanks to the order book, which you don’t find with MT4 cryptocurrency brokerages.

• No weekend trading: When you trade crypto on MetaTrader 4, the market is only available 24/5. This is unlike using an exchange, where you can trade digital currencies around the clock. 

Also, only a few brokers provide weekend customer support, whereas many exchanges help clients during off-market hours.

• Lower market selection: Exchanges generally offer more crypto markets than brokers.

• MT4 is a less sophisticated platform: Despite being a super user-friendly software product, MT4’s charting proficiency is not amazing. Other platforms like cTrader and TradingView fare better in this regard. 

Although MT4 cryptocurrency is only a few years old, MT4 is old software. MT5, which has slightly better features, has never been upgraded since its 2010 release.

• Volatility of crypto: Digital currencies are still a relatively new financial instrument with a younger track record than other markets. How the prices of coins change can be quite erratic. 

When a market is new-ish, it has an abundance of speculators looking to profit from it. This is what is happening in crypto currently. Also, there are still concerns over the future of the industry overall. Many countries have begun placing bans or stronger regulation.

Conclusion

The integration of MT4 and crypto is a match made in heaven. Despite the fluidity of the two, it’s essential that you first become proficient at trading digital currencies. Our beginner guide is a good place to start.

Knowledge and applying it to maximum effect is power. Once you get to this stage, you can trade crypto on MetaTrader with the highest chance of success.

Introduction

In the world of trading, like several other businesses, software and the internet have increased the number of avenues that create further market accessibility. The benefits of using an automated crypto trading bot and the latest software are becoming more apparent. As technology becomes more sophisticated, companies vying to take their market share are increasing.

This is naturally resulting in the market itself becoming increasingly competitive. This will not be a trend that slows down anytime soon as the ideas and concepts of digital currency are still in their infancy. It’s difficult to predict where we will be in twenty years, but the journey is guaranteed to be exciting.

There are differing opinions in the world of cryptocurrency. Some people believe that if governments step in, they could wound the market indefinitely and not allow it to flourish to the levels it has the potential to. However, some people believe that mass adoption is inevitable. They see cryptocurrency as the internet of money, which would completely change how we live our lives. If we look at how the internet has changed our lives, if cryptocurrency were to do the same in the world of finance, the changes could be incalculable. In any event, these are all arguments for another day.

We’re going to explore today the crypto trading bot and how the industry is flourishing and blossoming. Using digital technology and the latest advances to forge its own place in the cryptocurrency market is the driving force behind this exciting new industry.

As the market continues to evolve and become a multi-billion-dollar industry, some companies emerging into this space are leading the way in innovations and cutting-edge ideas. We will explain some of these companies today and find out which crypto trading bots are more effective than others. It can be difficult to find a crypto trading bot that does everything that supplements your successful trading psychology. A healthy amount of scepticism will not harm you in the trading world. In fact, it’ll likely benefit you at some point.

Eternal optimists and people constantly pushing for huge returns will find themselves humbled in the financial jungle of trading, especially in the world of cryptocurrency. While stock and forex trading can be challenging to navigate as a beginner, cryptocurrency poses the same risks but with even further volatility.

Why Is Cryptocurrency Trading Considered To Be Riskier Than Stocks?

Stocks and forex trading are markets that are well-established, highly regulated and have a considerable amount of corporate and institutional interest. Simply put, large investment banks, pension funds and hedge funds operate in this space. Therefore, the appetite for risk is much smaller due to the phenomenal amount of capital they have invested in the market.

The same cannot be said for cryptocurrency. It is true that, more recently, large companies have moved into the space. However, the level of investment between foreign currency trading and cryptocurrency is huge. Despite enormous companies such as Tesla, and high net-worth individuals such as Elon Musk admitting to owning cryptocurrency, large institutions are still cautious about this new type of investment.

This is clear in the figures from the market. Forex trading sees trillions of dollars worth of trading in 24 hours. Although cryptocurrency is still classified as an emerging market. Some large institutional investors in the space, such as Blackrock and Grayscale, are enjoying success in the space. However, the 24-hour volume is far lower than forex. If you’d like an overview of how to become a successful forex trader in 2023, we have more information for you here in our guide.

It would be naïve to think that the two markets operate similarly. However, the volume is a good indicator of how much trading is taking place and how popular certain cryptocurrencies are. Due to a combination of this and less stringent legislation, buying, selling, and moving cryptocurrency prices is far easier for the big hitters in the market.

For example, the price of Dogecoin in 2021 went up by over 10,000%. This was partly thanks to a series of tweets from Elon Musk, which drove the price of the cryptocurrency to absolutely astonishing levels. This results in volatility that can be incredibly fierce in times of negative market sentiment.

In the past, this has seen the price of cryptocurrency fluctuate wildly and drop by as much as 40% in a couple of days. If that drop occurred in forex or stock, it would indicate a huge global issue. In cryptocurrency, it is far more common and can happen yearly or sometimes bi-annually. Therefore, you are more susceptible to the risk. Still, there is also scope for some serious returns if you time it correctly. With great risk comes great reward, as the old saying goes.

So, Do Bots Make It Less Risky?

Yes, they do. Cryptocurrency bots work the same way as any other type of trading bot. You could be more vulnerable to trading on emotion as a novice trader. This isn’t to say you’re a bad trader; these are mistakes any trader could make. Even the best trader in the world had to learn their craft somewhere. However, the most common mistake is allowing fear or panic to set in. The same applies in general life. If you are flustered, panicked or emotional, you are more likely to make mistakes or overlook things. In trading, the same principle applies.

The beauty of crypto trading bots is that they completely remove this element from your trading psychology. If you want to buy a cryptocurrency at a particular price and then sell it when it hits a certain price, you can set up crypto trading bots to do this for you.

Some traders will refer to crypto trading bots as algorithmic crypto trading or algo trading crypto. Crypto trading bot algorithms may sound like a difficult and complex term. However, all it means is automated software you use to set up trades when you aren’t able to be at your workstation or your phone. It encompasses a few other things too, but this is the main idea of it.

Once you realise this is the case and give yourself time to get the experience, you will be able to use these tools. Crypto bot trading is one of the simplest tools to ensure that you remove emotion. Whilst on the face of it, it may sound like a complicated term. However, it is one of the easier terms to understand in the cryptocurrency market.

Crypto trading algorithms make the most of technology that top traders on Wall Street have used for stocks and forex for several years. A crypto trading algorithm works exactly the same way as this software that has harvested such handsome profits for the biggest traders in the world. This isn’t just down to individual traders either. It is also used by large institutional fund managers such as hedge funds, pension funds and investment banks.

Cryptocurrency trading algorithms might seem like new technology. However, that is mainly because cryptocurrency is still a market finding its feet. It does not have the same stature or international recognition as more traditional markets such as stock and forex. It is an emerging asset class and is the first trillion-dollar asset class to be created in this century.  

As the market is saturated, you want to ensure you set yourself up with the best cryptocurrency algorithmic trading software. Algorithmic trading cryptocurrency is a market that continues to evolve.

There are plenty of companies offering this service, and it is important to find one that suits your trading needs. Allowing you to get involved in algorithm crypto trading and look to make some gains on your investment.

You want to put yourself in a position where you are trading smart and not spending your entire day glued to the cryptocurrency charts. If you overanalyse graphs, charts, data, and opinions online, you will hinder your own chances of trading successfully.

Bitcoin

Bitcoin is the most well-known cryptocurrency and has the highest trading volume. A Bitcoin trading algorithm could encompass various crypto trading bot strategies. Suppose you are looking to swing trade, for example. In that case, crypto bots will be extremely useful and are used by many professional traders. A bitcoin trading bot strategy can also be utilised in the event of effective chart analysis.

A Bitcoin bot would work the same way as an Ethereum crypto trading bot or Cardano or Matic bot trading. Some people will use a Bitcoin trading bot to scoop up some Bitcoin at a cheaper price and then sell it when the market bounces back.

Regarding algorithmic trading, crypto is one of the main markets where it is implemented. A bitcoin trading bot is essential if you’re looking to buy and sell the premium cryptocurrency on the market today. As we have mentioned, it works the same way as any other cryptocurrency trading bot.

Bitcoin algorithmic trading is something that has returned serious results for traders. The ability to accurately study cryptocurrency charts and the direction in which they will head is crypto trading 101. In fact, it is pivotal to any type of trading. Suppose you are lucky enough to find yourself in a position where you have put the time and effort into studying charts and have an expert understanding. In that case, crypto algo trading will only enhance your chances of coming out of the market with a decent profit. 

When You Should Use It

Ideally, if you want a specific buy and sell point, you should use a bot every time. The primary reason for this is what we discussed earlier about emotional trading. However, for other forms of trading, you may want to keep a closer eye on the market. This includes a trading technique known as scalping. You can still use crypto bot trading strategies to perform scalping, but you must allow yourself flexibility.

You don’t want to run before you can walk, though. This type of trading requires meticulous market research. One wrong entry can cause you to lose a considerable amount of your capital. Scalping is a fairly complex way of trading. It can pose serious risks as you usually have to use large amounts of capital for a quick and relatively small return.

However, to set automatic buy and sell targets, you cannot use better software.

Effective Risk Management

 A wise strategy in any investment field is to have a strategy where risk management ranks high on the agenda. This is particularly true in cryptocurrency trading. The reason is that it generally faces harsher criticism and more intense questions about legislation and regulation.

Due to the decentralised nature of cryptocurrency, some of the biggest detractors are large financial institutions. This includes large multinational banks, which is unsurprising. The issues regarding the legitimacy of cryptocurrency, as well as negative news, can harm your investment.

As we have seen recently, with rising inflation and interest rates, stable centralised currencies are not doing too well at the moment either. However, public misconceptions combined with these negative news stories can cause cryptocurrency to fluctuate more volatilely than the likes of forex, for example.

As the markets are largely unregulated, this again provides a more natural marketplace and a more dangerous one. Luckily, a crypto trading bot can efficiently manage the increased risk. It is much more realistic to have a cryptocurrency bot that allows you to make steady returns far more likely than one big return.

You will likely lose more money due to an impatient strategy if this is what you’re trying to achieve. It is not an effective way of trading in the short, medium, or long term.  

Another way of managing your risks effectively, as well as using crypto trading bots, of course, is by using a crypto trading bot strategy called dollar cost averaging. This isn’t just a strategy specific to a crypto trading bot. You can do this with manual market research as well.

This is when you set up a manual or automated order to purchase your cryptocurrency on the way down. If you bought your cryptocurrency at a high price and then it fell, if you’re able to continue buying on the way down, you can absorb the costs easier. Suppose you hold as the prices rise again. In that case, the spread of trade entry points means that you have managed your profit and loss margins properly, and in the long run, it is a better overall investment.

However, calculating the points to ensure you buy the right amount is key. Crypto trading algorithms can execute these positions exactly when you ask them to. It doesn’t matter what time of day, or night, it is. Suppose you are using a reliable crypto trading bot. In that case, your crypto trading algorithms execute as each price reaches the target.

The only factor that could cause this not to go smoothly is that liquidity is not available in the market. This can occasionally be the case in cryptocurrency. The reason is that the market experiences such huge volatility as large investors often exit and enter the market more regularly. Especially when compared to other markets such as stocks or forex. When this happens, the trade may not go through as expected. However, it will be around that price, generally speaking.

Conclusion

The importance of choosing the right crypto trading bot is imperative to your overall trading psychology. Suppose you find yourself in a position where you spot a market opportunity and want to buy and sell for certain prices. This can be down to factors such as chart information you have studied or an ideal entry point you have discovered. 

In that case, you want to have the ability to execute this trade as soon as possible. As soon as possible might not be whilst you’re sitting there trading, scanning charts, and eating breakfast. This ideal entry point may not take shape until 3:40 am when you are miles away enjoying a decent rest.  

You need to put yourself on a level playing field with all the other traders in the industry to stand yourself with the best possible opportunity to turn trading into a passive stream of income in 2023.

With the latest graphics and computing code updates, crypto trading bots will likely continue to become more sophisticated. It is also highly likely they will continue to have even more of a dominant effect on the market.

It is crucial to remember that trading bots crypto, thorough chart research and effective market study are put of a multi-pronged effort that is the best approach to trading. You can’t really trade without any of these and still, put yourself at an advantage. That isn’t to say you aren’t a good trader or you don’t know what you’re doing. Still, large investors and other small individual investors are taking advantage of all of these tools to ensure they make a return. If you aren’t using one of them to the best of your ability, you give others a head start.

As we move into 2023, more companies will attempt to move into this space. Therefore, you must keep yourself ahead of other traders. You can do this by implementing the strategies we have discussed today. This includes getting premium crypto trading bot software and keeping a sharp eye for any news that may move the cryptocurrency market.

Introduction

Over these past few years, there has been a surge in investors interested in how to trade cryptocurrencies. It all started with a seemingly laughable yet revolutionary 9-page Bitcoin whitepaper written by the mysterious and pseudonymous Satoshi Nakamoto in 2008.

However, it’s only been in the last five years that people have started taking notice of digital currencies. This technology has disrupted the traditional financial system and has influenced many other sectors like healthcare, travel, retail, tourism, travel, and more.

Despite many detractors, we can be confident that digital currencies are here to stay. Here we present a crypto trading guide for beginners to get you started.

What is crypto trading?

A crypto (short for cryptocurrency) is a digital currency built and maintained by a decentralized computer network. Banks and governments do not determine the creation of crypto as with ordinary fiat money.

Instead, most digital currencies rely on an electronic ledger or database called a blockchain that uses complex cryptography to:

• Control the supply of new tokens
• Ensure that transaction records are accurate
• Verify coin ownership

In the early days, when people were discovering the best ways to trade crypto, digital currencies were only capable of one function: payments. The best current examples are Bitcoin (BTC), Litecoin (LTC), Bitcoin Cash (BCH), and Ripple (XRP), among others.

Nowadays, of course, things have gotten a lot more advanced. While you can use any coin as a medium of exchange, this is usually a secondary purpose. Here is a list of other prominent types of digital currencies and their brief functions:

• Application-building coins: These digital currencies are capable of several things. They centre around building decentralized applications, smart contracts, and paying computer operators on their respective networks.

Such projects form part of the second-generation of blockchains first pioneered by Ethereum (ETH). This era simply describes how we use crypto for other things besides settling payments. 

Other prominent examples include Solana (SOL), Cardano (ADA), Tron (TRX), and plenty of others.

• DeFi coins: DeFi (decentralized finance) is an industry of various platforms like lending services, exchanges, and marketplaces that function without a traditional middleman. Ethereum is another prime example here. However, other well-known coins include Uniswap (UNI), Avalanche (AVAX), Aave (AAVE), etc.

• Stablecoins: A stablecoin is a volatility-free coin pegged to another asset (like the US dollar) on a 1:1 basis to maintain a stable price, e.g., Tether (USDT), USD Coin (USDC),  Binance USD (BUSD).

• Meme coins: A meme coin is a token based on a popular internet meme, online community, influencer, pop culture phenomenon, or a combination of all four. In simple terms, it’s a digital currency created as a joke, e.g., Dogecoin (DOGE), Shiba Inu (SHIB), Dogelon Mars (ELON)

• Storage coins: These are tokens offering a financial incentive for people with unused disk space to lease it on a decentralized cloud storage marketplace, e.g., Filecoin (FIL), Siacoin (SC), Storj (STORJ).

• Privacy coins: These are coins that we use to pay for goods or transfer to others, the exception being that they have features to anonymise senders and receivers, e.g., Zcash (ZEC), Monero (XMR), Dash (DASH).

• Exchange utility coins: The best way to trade crypto is through an exchange. Many of these platforms provide utility tokens, which are special coins where you can receive exclusive benefits like lower trading fees, free withdrawals, voting power, and other perks.

Binance Coin (BNB), FTX Token (FTT), Cronos (CRO) are just a few of the well-known  exchange coins.

• Content creation coins: Nowadays, crypto trading has given people a way to earn from their content, whether through social media, video streaming, music streaming, gaming, advertising, or building a virtual world. 

Examples of this sector include The Sandbox (SAND), Decentraland (MANA), Axie Infinity (AXS), and Theta (THETA), among others.

Now let’s look at the trading part. 

Trading is the speculative buying and selling of the price differences in crypto pairs to make a profit.

Similar to forex, we trade in pairs. So, for instance, Bitcoin is quoted as BTC/USD, representing the price of Bitcoin against the US dollar. 

Traders go long (buy) if they are confident that the price of a coin will rise against another market or go short (sell) if they believe it will decrease against another market. Your decisions to buy or sell are guided by technical analysis and fundamental analysis (more on this later)

As you learn crypto trading over time, you’ll quickly realise that a simple tweet from a high-profile person is enough to skyrocket or plummet a coin’s price. 

Digital currencies are a bit of a rollercoaster. They are a highly volatile market where you can witness massive price drops in a short space of time.

Types of crypto trading

When you study how to trade crypto, you can trade it in two ways: through a CFD (contract for difference) or by purchasing the underlying coin. A CFD defines trading a market without taking physical ownership of the traded asset.

It’s also called a derivative because its value is taken or derived from an underlying market. Let’s look at Bitcoin. When you buy actual BTC from an exchange, that is the real coin that you can store in a wallet, use to buy goods, or transfer to others. 

However, when you trade the same asset as a CFD, it’s simply a representation of its price. You don’t own real bitcoin. 

Crypto trading through CFDs is best for aggressive short-term speculation. This is because a key component of CFDs is leverage, a mechanism present with all CFDs across other markets. The idea is to ‘gear’ your account to open much larger positions than your balance normally handles.

Your broker or exchange simply needs a small deposit called a margin. If you’re trading cryptocurrency for profit in the short term, leverage is necessary to amplify your gains. However, any reckless misuse can blow your account since it works both ways.

On the other hand, traders who hold for the long term (months or years) have no access to leverage. They need to offer the full value of their investment. This is unlike CFDs, where only a small portion is needed thanks to leverage.

Another key difference, as you’re grasping how to crypto trade, is that CFDs allow you to go long and short. Yet, when you own the real coin, you can only buy. The selling only happens after you’ve purchased. However, you can sell without having bought the coin (and vice versa) with a CFD. 

Lastly, CFDs have more costs attached, like commissions and overnight fees. Conversely, you only incur a commission when you trade the real coin.

The difference between a crypto trading exchange and broker

As you read up more on buying and trading cryptocurrency, you may see writers using the terms ‘exchange’ and ‘broker’ together. However, they are not quite the same. It’s all about what happens behind the scenes.

When you are trading with a broker, you deal directly with them. They may act as an intermediary by transferring your positions to another dealer or taking the other side of your orders (i.e., buy when you sell or sell when you buy).

When trading with an exchange, they simply match your orders with other buyers and sellers on a publicly viewable platform through a matching engine or order book.

An exchange is more transparent because you can see the order volume at incremental price levels. With a broker, this information is unavailable to the public; only they can view the matching engine.
Here’s an example of an order book from Binance, one of the largest crypto trading exchanges globally.

Another difference is that exchange prices are determined by actual market forces, while a brokerage decides its own. However, in most cases, the differences are minor. 

So, which should you choose? If you want to buy real cryptocurrencies, exchanges are the way to go. Yet, over the past few years, exchanges have beefed up their CFD options, providing the best of both worlds. Also, they often offer a more comprehensive coin selection. 

On the other hand, crypto trading brokers are best if you’re looking to speculate in other non-crypto instruments like forex, stocks, and metals that many exchanges don’t provide.

Lastly, exchanges are superior when it comes to market hours as they provide 24/7 trading. Meanwhile, most brokers are only limited to 24/5.

How to start trading cryptocurrency

Let’s go over the steps in mastering how to trade cryptocurrency successfully.

Study the best projects for crypto trading

CoinMarketCap lists over 21 000 coins presently (which will only continue growing). One thing is for sure: the market is over-saturated, making it difficult to cut through the noise. 

This is why it’s essential to follow only the best projects with the highest chance of surviving and thriving long-term. Here are some questions to consider.

• What is the value proposition?
• Are there any existing competitors?
• Does the coin have deflationary tokenomics?
• Who are the developers behind the project?

As you learn to trade crypto, a useful organizational tactic is to divide this large piece into different market cap categories. Market capitalization is a figure derived from the current price of a coin multiplied by its circulating supply (the number of publicly available coins)

For example, if a token is worth $2 and has a circulating supply is 500 000, the market cap is $1 million. Below are the main segments for market cap in crypto:

• Large-cap: over $10 billion
• Mid-cap: between $1 billion and $10 billion
• Small-cap: less than $1 billion

Of course, market cap doesn’t always indicate potential value. However, it’s a way to group different projects based on risk, volatility, trading volume, stability, and competition.

Understand the basics of online trading

• Learn to use charting software so you can understand order types, indicators, chart types, time-frames, opening and closing a position, etc.
• Study the differences between the spot, futures, perpetual swaps, and options
• Understand the fees/commissions charged by crypto trading platforms

Arguably, the most vital part is to learn the differences between technical analysis, fundamental analysis, and sentiment analysis. These help you forecast the potential direction of crypto markets at varying time horizons.

Combining at least two of them is always good for finding the best opportunities likely to yield a profit.

Technical analysis

Technical analysis (TA) is about studying chart structures and indicators by observing historical price action to predict future movements. TA is beneficial for the short term since traders like to make the most profit in the shortest time available.

Yet, TA is known for being a lagging dynamic in all financial markets, meaning it’s not always reliable. Hence, investors tend to look at fundamental analysis when trading cryptocurrency, which can offer better clues on price movements before they happen.

Fundamental analysis

Fundamental analysis (FA) involves assessing a coin’s intrinsic or essential value by incorporating various economic, political and social factors. Unlike other instruments, FA in crypto is not yet fully developed.

There isn’t an official list of elements to observe. Therefore, the scope can be broad. However, popular components to observe include:

• On-chain metrics (top coin holders, number of addresses, number of addresses, hash rate, transaction count, etc.)
• Financial metrics (tokenomics, market cap, liquidity, etc.)
• Project metrics (developers, whitepaper, value proposition, competitors, etc.)

FA aims to find moments where a project may be undervalued or overvalued even when the short-term price picture suggests otherwise. Therefore, using this analysis is best for long-term projection.

Sentiment analysis

Sentiment analysis is less commonly used in many markets, but this doesn’t downplay its usefulness. It is about studying the sentiment or emotions of market participants and the crowd psychology around a particular crypto.

When the sentiment is positive, we expect bullish prices; when the sentiment is negative, we anticipate bearish prices.

The most popular sentiment indicator for trading cryptocurrency is the Crypto Fear & Greed Index (FGI). The FGI is updated daily and measures the level of fear and greed by computing data points from Bitcoin dominance, Google Trends, volume, volatility, and social media.

Experts believe any market is constantly shifting between moments of fear and greed. Fear represents buying opportunities as traders worry about the future and missing out. 

Greed signals that people are booking profits, causing pullbacks. Analysts view these scenarios as opportunities for selling.

Develop your strategy and trading style

There are many ways to skin a cat as you learn how to trade crypto. Let’s look at the most popular strategies:

• Trend-following or mean-reversion
• Reversal trading
• Breakout trading
• Range trading

It’s not only about the system but also the type of trader you are. Do you want to be a scalper, day trader, swing trader, or position trader? Or perhaps trade with a robot (check out our guide here on the best bots)? Regardless of your decision, defining who you are and your strategy is important. 

The best way to trade cryptocurrency is the method that suits your experience, skills, and preferences. At this stage, spending considerable time demo trading is crucial. This will allow you to test as many different techniques as possible without real money.

Here, you should back-test your strategy for at least a year until it produces a profitable track record. Once you are confident that you can make money consistently, move on to the next stage.

Pick a suitable crypto trading platform

So you’ve learned about understanding cryptocurrency trading; now you need a platform. Here are the things to consider as you are looking at different options.

• Security: If you’re trading through a broker, ensure that it is regulated. For exchanges, aside from regulation, they should also implement offline cold storage and strong two-factor authentication. 

Cold storage is critical, given that even the biggest exchanges have been hacked.

• Coin selection: The more, the merrier. One advantage of digital currencies is the broad range of coins available. So, the wider the choice, the better, allowing you to get everything under one roof.

• Trading costs: It’s good to compare the fees across different crypto trading platforms to get the best bang for your buck. 

• Payment methods: Exchanges are the way to go if you prefer to deposit and withdraw using digital currencies. With less focus on crypto, brokers tend to stick with traditional payment options like cards and e-wallets. Regardless, the more available choices, the better the convenience.

• Customer service: Nowadays, a live chat service is a must for a crypto trading platform where you can get your queries answered swiftly. However, also consider the quality and availability of phone and email support. 

Benefits of crypto trading

• High volatility: The depth of price movements means a greater reward potential in a short period. However, the same volatility, coupled with leverage, can lead to massive losses if you don’t treat it carefully.

• Decentralization: Once you learn to trade cryptocurrency, you’ll realise the freedom that comes with it, particularly with exchanges. For instance, crypto withdrawals are much quicker compared to traditional financial institutions.

• Around-the-clock trading: Crypto is the only financial market where you can trade 24/7. For this reason, several forex traders have switched to crypto since there are always opportunities, even during weekends and public holidays.

• Broad market selection: As we mentioned before, there are literally thousands of coins to follow when you navigate how to get into crypto trading. 

Risks of crypto trading

• Lack of regulation: Decentralization does come with downsides, which is why governments in many countries have banned crypto. It is common to witness many scams and crimes using digital currencies. 

As you start knowing how to trade cryptocurrency for profit, it’s crucial that you don’t fall victim and know how to protect yourself.

• Security risks: If you are not trading CFDs, there is always the possibility of someone hacking your wallet private keys through an exchange. Also, if you incorrectly transfer funds to the wrong address, it is usually difficult to recover your funds.

Holding crypto is different from ordinary money. So extra precautions are always necessary.

• Unknown long-term potential: Digital currencies are still a relatively untapped technology. Yet, because of regulation, security, and usefulness concerns from investors, no one knows how long your favorite coin will be relevant.

Conclusion

Phew! It’s perfectly fine if you feel we’ve gone through a lot in how to start trading crypto. Like any financial market, it is a daunting task and a long road with many concepts to master. 

In many ways, it’s similar to acquiring a tertiary qualification. And even after completion, there is always new stuff to learn.