This guide will show you how to trade cryptocurrency. This is for both newbie and experts in the crypto world.
I published a post on how to earn free cryptocurrency online a while ago, and it generated good reviews. I should have included cryptocurrency trading but didn’t because of the initial capital required to start trading cryptocurrency.
Cryptocurrency is volatile, unlike your regular fiat, where $10 is $10. Bitcoin was $6,242 on March 28, and it’s trading at $7,760 today. That’s a 24% increase and an indicator of how volatile cryptocurrency can be. It can go up or go down.
This is why newer players want to enter the market and get their slice of the crypto pie.
So, this guide will help new players to trade cryptocurrency and make a decent profit off the volatility.
How to Trade Cryptocurrency
So you have some money lying fallow in your account that you want to invest. How are you going to buy your first cryptocurrency and start trading? Some portals connect our world to the crypto-world that is known as exchanges. There are a lot of exchanges out there, and you need to consider many things before you choose to invest in one.
Crypto Exchange Checklist
This is a comprehensive list of things you need to check for in an exchange before depositing your cryptocurrency with them for trading purposes.
- Availability – You need to make sure the exchange is available in your area. For example, Coinbase is not fully supported in most places. Some places like the USA can convert, buy, and sell, while some places like India and Nigeria are not supported. This should be the first thing you check before you do anything. The appropriate exchange would be Wazirx for India and Binance for Nigeria
- Reputation – You don’t want an exchange that will scam exit and run away with your coin. There is a slang in the crypto world, which is DYOR, meaning Do Your Own Research. Make sure you check the internet for information about the exchange and be sure they are of high reputation before choosing them. Binance, Huobi, and Bittrex are some of the top reputable exchanges out there.
- Security – How secure is your funds in the event of a hack? Binance used a slang Users funds are Safu during their recent hack. Secure Asset Fund for Users (SAFU) offers protection to Binance users and their funds in extreme cases such as hack. You also want an exchange that has extra security measures such as 2fa authenticator, unknown login alert, SMS alerts, and many more.
- Exchange fees – What is the essence of trading crypto on an exchange with all your gains going to maker fees or deposit and withdrawal fees. You need to research the exchange fees before pitching your tent with them.
- Wash trading – Wash trading is a market manipulation where the exchange uses a bot to buy and sell the same crypto to create artificial volume. It’s shocking right, well, that’s the truth. Many exchanges do that, and you should steer clear of those exchanges—they fake volume to entice cryptocurrency traders.
The cryptocurrency exchange I will be suggesting is Binance. It is one of the best out there with an Android application that does everything you need.
Signing up with Binance
The registration process is simple as you need your email, an 8 characters password containing at least 1 uppercase and 1 number, then the referral code. Once this is done, you need to verify the email to login. Click here to sign up.
I advise new and already registered users always to verify their accounts. Do your KYC to make your account more secure and have a sense of ownership.
You should also enable 2fa and download the mobile application for easy access to your cryptocurrency.
Deposit crypto or fiat in Binance
You need to deposit cryptocurrency or fiat that you will use to purchase cryptocurrency in Binance. Depositing cryptocurrency in Binance is easy. Clicking the deposit tab will show you the list of cryptos that you can deposit. You will get a generated address and sometimes a memo when you click on any of them. The cryptocurrency will appear in your Binance balance once the transaction is confirmed.
Binance currently supports fiat deposits of EUR, Nigerian Naira, SouthAfrican Rand, Pound Sterling, and so on. You can deposit these currencies on Binance then trade them for available crypto. The deposit can be in the form of bank transfer or internet banking.
You can also buy cryptocurrency on Binance with your credit card directly. The Simplex payment system aids this.
You have gotten your cryptocurrency on the exchange, and the next thing is to start trading.
How to trade cryptocurrency
We have come to the central part of this guide.
Binance provides a straightforward and easy to use trading interface. Binance also has its native tokens called BNB. You get commissions when your trading fees and withdrawal fees are paid with BNB.
Trading cryptocurrency involves Fundamental analysis and also Technical analysis.
The fundamental analysis involves assessing the cryptocurrency intrinsic value. It involves examining the economic, financial, qualitative, and quantitative factors surrounding the cryptocurrency. An example of this is the recent surge in HIVE price. Huobi listing the coin led to a rise in price coupled with the Huobi deposit competition.
Technical analysis is a security discipline for forecasting the direction of prices through the study of past market data, primarily price and volume. A technical analyst uses many techniques such as charts, which is used to identify price patterns and trends in financial markets and attempt to exploit those patterns.
Technical analysts also use market indicators such as RSI and macd. These indicators help to access whether a cryptocurrency is trending and if you can exploit it.
There are many techniques used in TA, such as Elliott wave theory, DOW theory, and Candlestick Charting.
The techniques will be discussed in a later post as they are advanced for a new user in the crypto world.
You can follow trading signals from respected analysts in the crypto world. Tradingview is one platform that lets traders and investors meet. You can explore the site and follow the picks of some of the top analysts there.
Coinmarketcap is another site that is very helpful for traders who want to gain insight into the health of various cryptocurrencies. The website ranks all cryptocurrencies by Marketcap. You can also click individual cryptocurrency to access more information about the cryptocurrency.
We hope that this guide will be more than enough to get you started on your cryptocurrency trading journey.
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