Cryptocurrency Trading – Tutorial and Brokers

Cryptocurrency trading signals has boomed in recent months. High volatility and trading volume in cryptocurrencies suit short-term trading very well. Here we provide some tips for day trading crypto, including information on strategy, software and trading bots – as well as specific things new traders need to know, such as taxes or rules in certain markets.

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How To Trade Cryptocurrency

How It Works

Scared of missing out? Here is a quick plan to get you trading cryptocurrency quickly;

About Us | Decide if you want to own the cryptocurrency, or simply have a hunch that it’s value will go up or down.
If you want to own the currency, you need an exchange

Fund your account

Buy the Cryptocurrency you want, or open a trade on it’s price.
Congratulations, you are now a cryptocurrency trader! Remember, you can run through the purchase or sale of cryptocurrencies on a broker demo account. Unfortunately, you cannot practise on an exchange.

CryptoCurrencySignal.com is here to help you!

Trading crypto generally revolves around speculating on it’s price, rather than owning any of the actual coins. For this reason, brokers offering forex and CFDs are generally an easier introduction for beginners, than the alternative of buying real currency via an exchange.

Cryptocurrency Trading – Tutorial and Brokers

Which cryptocurrency platform you opt to do your trading on is one of the most important decisions you’ll make. The exchange will act as a digital wallet for your cryptocurrencies, so don’t dive in without considering the factors below first.

Some brokers specialise in crypto trades, others less so. Others offer specific products. IQ Option for example, deliver traditional crypto trading via Forex or CFDs – but also offer cryptocurrency multipliers. These offer increased leverage and therefore risk and reward. Innovative products like these might be the difference when opening an account cryptocurrency day trading.

Apps & Software

Day traders need to be constantly tuned in, as reacting just a few seconds late to big news events could make the difference between profit and loss. That’s why many brokers now offer user friendly cryptocurrency mobile apps, ensuring you can stay up to date whether you’re on the train, or making your sixth coffee of the day.

How to Compare Brokers

The cryptocurrency trading platform you sign up for will be where you spend a considerable amount of time each day, so look for one that suits your trading style and needs. Exchanges like Coinbase offer in-depth platforms, such as their Global Digital Asset Exchange (GDAX). It’s always worth setting up a demo account first to make sure the exchange has the technical tools and resources you need.

Cryptocurrency Trading – Tutorial and Brokers

Security

Always check reviews to make sure the cryptocurrency exchange is secure. If your account is hacked and your digital currency transferred out, they’ll be gone forever. So whilst secure and complex credentials are half the battle, the other half will be fought by the trading software.

Fees
Each exchange offers different commission rates and fee structures. As a day trader making a high volume of trades, just a marginal difference in rates can seriously cut into profits. There are three main fees to compare:

Exchange fees – This is how much you’ll be charged to use their cryptocurrency software. What currency and coins you’re trading can influence the rate.

Final Word On Brokers

This isn’t a decision to take lightly. Do the maths, read reviews and trial the exchange and software first. Coinbase is widely regarded as one of the most trusted exchanges, but trading cryptocurrency on Bittrex is also a sensible choice. CEX.IO, Coinmama, Kraken and Bitstamp are other popular options.

Cryptocurrency Trading For Beginners

Before you choose a broker and trial different platforms, there are a few straightforward things to get your head around first. Understanding and accepting these three things will give you the best chance of succeeding when you step into the crypto trading arena.

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Embrace volatility – Cryptocurrencies are famously volatile. The price of Bitcoin, for example, went from $3,000 down to $2,000 and then leapt up to nearly $5,000, all within three months in 2017. Whilst this means risk is high, it also means the potential for profit is great too. It’s always sensible to check the volatility of the exchange you decide to go with.

BlockChain

Understand blockchain – You don’t need to understand the technical complexities, but a basic understanding will help you respond to news and announcements that may help you predict future price movements. It is essentially a continuously growing list of secure records (blocks).

Strategy

Once you’ve decided on a broker, got familiar with your platform and funded your account, it’s time to start trading. You’ll need to utilise an effective strategy in line with an efficient money management system to make a profit. Below is an example of a straightforward cryptocurrency strategy.

Swing Trading

This straightforward strategy simply requires vigilance. The idea is you keep a close eye out for a correction in a trend and then catch the ‘swing’ out of the correction and back into the trend. A correction is simply when candles or price bars overlap. You’ll find trending prices move quickly, but corrections, on the other hand, will not.

Let’s say on your cryptocurrency chart at 250-minute candles, you see 25 candles where the price stays within a 100 point range. If the price contracted to a daily move of just 20 points, you’d be seriously interested and alert. You should see lots of overlap. This tells you there is a substantial chance the price is going to continue into the trend.

You should then sell when the first candle moved below the contracting range of the previous several candles, and you could place a stop at the most recent minor swing high. It’s simple, straightforward and effective.

Tips

Even with the right broker, software, capital and strategy, there are a number of general tips that can help increase your profit margin and minimise losses. Below are some useful cryptocurrency tips to bear in mind.

Utilise News

Short-term cryptocurrencies are extremely sensitive to relevant news. When news such as government regulations or the hacking of a cryptocurrency exchange comes through, prices tend to plummet.

On the flip side, if a big company announces they’ll be incorporating the use of a currency into their business, prices can climb quickly. If you’re aware of any news and can react rapidly, you’ll have an edge over the rest of the market.

Technical Analysis

Analyse historical price charts to identify telling patterns. History has a habit of repeating itself, so if you can hone in on a pattern you may be able to predict future price movements, giving you the edge you need to turn an intraday profit. For more details on identifying and using patterns, see here.

Study Metrics

This is one of the most important cryptocurrency tips. By looking at the number of wallets vs the number of active wallets and the current trading volume, you can attempt to give a specific currency a current value. You can then make informed decisions based on today’s market price. The more accurate your predictions, the greater your chances for profit.

Trade On Margin

If you anticipate a particular price shift, trading on margin will enable you to borrow money to increase your potential profit if your prediction materialises. Exchanges have different margin requirements and offer varying rates, so doing your homework first is advisable.

Rules & Taxes

The digital market is relatively new, so countries and governments are scrambling to bring in cryptocurrency taxes and rules to regulate these new currencies. If you’re not aware of these before you start trading, you may find yourself in a spot of expensive bother further down the line.

Cryptocurrency Trading – Tutorial and Brokers

Bots
If you’ve already got a strategy that works, then a cryptocurrency trading robot may be worth considering. Once you’ve programmed your strategy, the bot will get to work, automatically executing trades when the pre-determined criteria are met. There are two benefits to this.

Risks
Having said that, bots aren’t all plain sailing. If you want to avoid losing your profits to computer crashes and unexpected market events then you will still need to monitor your bot to an extent.

Education in Crypto
The most useful cryptocurrency trading tutorial you can go on is the one you can give yourself, with a demo account. Firstly, you will you get the opportunity to trial your potential brokerage and platform before you buy.

Cryptocurrency Trading – Tutorial and Brokers

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Cryptocurrency Trading – Tutorial and Brokers