3 Things New Beginner Traders Should Know About Crypto

Must read

Traders who are new to the world of crypto might find themselves intimidated by all of the terminology and the volatile nature of digital currencies. However, that doesn’t mean they shouldn’t dive in and try their hand at trading. In fact, even seasoned traders are keeping their eye on the crypto markets right now because they know there’s big potential for profits. If you’re thinking about dipping your toes into the world of cryptocurrency, here are a few things you should know before you get started.

What Is a Crypto Exchange?

When you trade traditional assets such as stocks or commodities, you have a direct relationship with a broker, who facilitates your transaction. If you want to buy or sell a stock, you call your broker and place an order. Her office then communicates with the other brokerage to facilitate the trade. Crypto exchanges work a bit differently. When you trade bitcoin or other cryptocurrencies, you do so through an online intermediary called a crypto exchange. This exchange holds your funds in a digital wallet and allows you to trade those funds for other cryptocurrencies or for traditional assets such as U.S. dollars. 

When you buy or sell a currency, the exchange deposits or withdraws the funds from your digital wallet and adjusts the number of assets in your account accordingly. Crypto exchanges have become the primary way people trade cryptocurrencies because they’re easy and inexpensive to operate. They also allow people to trade 24 hours a day, seven days a week. In addition, since the transaction is completely digital, it’s easier to manage risk and verify customers’ identities. 

How to Trade Crypto?

We’ve already talked about how crypto exchanges differ from traditional brokerage houses. How, then, does one go about trading crypto? Trading can be done in two ways, via a crypto platform such as BitAlpha AI or through a crypto trading bot. When you trade on an exchange, you need to find a pair of crypto assets that you think will outperform the rest of the market. For example, you might want to buy Ethereum because you think its price will rise. Or, you might want to sell Bitcoin because you think its price will drop. If you choose to trade on an exchange, you should choose an exchange that supports fiat currencies, like U.S. dollars. 

This makes it easier to deposit funds into the exchange. Once you have funds in your account, you can then buy the crypto assets that you think will outperform the rest of the market. If you choose to use a crypto trading bot, you need to find a reputable provider. While there are some good free bots out there, most of them don’t offer the level of customization that you need to make money in this space. A good bot will allow you to select the crypto assets that you want to buy and sell, the amount that you want to spend or earn, the timeframe for which you want to make the trade, and the risk level that you feel comfortable with. Once you’ve selected all of these factors, the bot will do the rest. It will monitor the market, make trades based on your selected parameters, execute those trades, and close out the position when the time frame is up.

Different Types of Trades in the Crypto World

  • Long positions: you buy a crypto asset that you think will go up in value over time. The most common example of this is buying bitcoin. With the way that its price has been growing in recent months, you’d be mad not to buy a little bit of bitcoin. 
  • Trading with leverage:,when you borrow funds from a broker to make a trade, and the broker takes a fee for doing so. When you own a long position in a crypto asset, you have to wait for the market to return a profit before you can cash in on your investment. If you want to make a quick profit, a leveraged trade would be a better option. With a leveraged trade, you take out a loan from a broker, and you use that loan to buy an asset. The broker will then hold the asset in your account until the loan is paid off. When you pay off the loan, you own the asset outright.

Wrapping Up

Crypto trading can be incredibly lucrative and exciting, if done correctly. When you’re new to the crypto trading space, it’s best to start small and slowly build your confidence. One way to do this is by opening a free demo crypto trading account at BitAlpha AI and waiting until you feel comfortable enough to start making trades with real money. If you’re new to crypto trading and would like to learn more, we recommend checking out our trading guide. There, you’ll learn how to select the best crypto exchange for your needs and how to use important crypto trading metrics like the daily chart and the order book.

If you’re looking for a secure and reliable trading platform check out:


More articles

Latest article