Learn How To Trade The Cryptocurrency Market In 5 Steps

Do you want to trade cryptos but aren’t sure where to begin?

Last Updated March 19th 2022
9 Min Read

Cryptocurrency is a relatively new industry that is rapidly becoming one of the most important in terms of selling capital and optimizing income.

The cryptocurrency market has new, aspiring investors flowing in every single day. Many of them know exactly what they’re getting themselves into, whereas many also don’t.

The trading game is somewhat similar to other financial markets, such as the stock or forex market, and it’s critical that you understand various facets of currency conversion, overall swapping, and other topics.

Key Points

  • The first step to learning to trade is to ensure you find a trading brokerage that best suits your personal needs.
  • A crucial thing to learn how to trade the crypto market is to educate yourself about how to read charts and price action.
  • Price behaviour can be deciphered using technical analysis in accordance with fundamental analysis.
  • There are endless accessible resources online and in-person that can help you make the most out of your learning journey.
  • Practice will always be a benefit, and at the very least, it encourages beginners to put ideas to the test before investing real money.

It’s true, cryptocurrencies may at times be very unpredictable, but there’s a foundation of knowledge and confidence one must acquire prior to investing their real money.

However, if one devotes the right time and effort, one can significantly improve their probability of victory. Once you’ve had your bearings, you can begin learning to trade cryptocurrency by following these five simple steps:

1. Register with a Trading Account of Your Choice

This may go without saying, but it’s always worthy of mentioning. Finding a reliable trading platform is the first step to begin your trading experience.

A cryptocurrency exchange is where users may buy, sell, or trade cryptocurrencies for other commodities, such as fiat currency. There are numerous trading platforms online that you can choose from, so make sure to make a thoughtful choice when you’re looking at all your options. Keep an eye out for:

  • The cryptocurrencies that are available; ensure that the platform you choose supports the cryptocurrency you want to trade.
  • High leverage; there is a possibility for more profit.
  • Hedging is a type of risk management that involves providing insurance and reduces the possibility of loss; also great for beginners.
  • On-hand support; you’ll want to be able to ask questions to an expert so make sure the platform offers support.

The exchange’s minimum and maximum operating balances, the country of origin’s eligibility, available lending, redemption opportunities, and account verification will all affect your decision on which broker or exchange platform to use.

To open an account with a crypto brokerage, you’ll need to have personal identity details on hand, much as you would with a stock brokerage. When creating an account, you’ll need to have information such as your Social Security number, age, date of birth, and email address, among other things.

If you’ve made a personal account in the past, maintaining a professional and technical trading account apart from your personal one is a smart idea.

Learn how to use the interface of the platform that you chose. Many platforms offer different tools and resources to enhance your experience and optimize your investments.

eToro is a great platform to start with. They have the “virtual trading” option. So it is possible to practise trading without investing real money. They offer you a virtual sum of $100,000 so you can test your trading skills. 

trade cryptos

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

2. Make Use of Online Resources

There’s an endless supply of resources and information available online, most of them for free, that you can use to learn essentially every aspect of trading. Financial posts and forums, cryptocurrency books and articles, website guides, crash courses, and the list goes on.

New investors and trading enthusiasts alike will benefit from crypto news sources such as CoinDesk, CoinTelegraph, and CCN.

Here are some of the best books you can read to learn about cryptocurrencies and blockchain:

  1. Cryptoassets by Chris Burniske and Jack Tatar
  2. Blockchain Revolution by Don and Alex Tapscott
  3. The Book of Satoshi by Phil Champagne
  4. The Basics of Bitcoins and Blockchains by Antony Lewis
  5. The Blockchain Developer by Elad Elrom

If you want to know more about trading books take a look at our trading books reviews, where we have made reviews of the most popular trading books.

There’s a lot of knowledge available, with minimal to no cost. It’s crucial not to get too hung up on one part of the trading game. Instead, research all there is to know about the industry, even theories and topics you don’t think are especially important right now.

Trading in itself is an obscure yet fascinating journey. You truly won’t know where you’ll end up, which is why it’s important to ensure you are prepared. Even if you believe you know just where you’re headed right now, your large and comprehensive business experience will come in handy time and again.

To ensure that you’re caught up with prices, divide a certain time out of your day, such as mornings, for instance, to take a look at the overnight price activity of different coins you may be interested in. 

3. Build Your Analytical Skills

The analytical aspect of crypto trading entails being able to read price charts and make conclusions from them.

Fundamental analysis examines all of the factors that will affect a cryptocurrency’s price in the future, such as competition, market capitalization, partnerships, and so on. It examines the company’s intrinsic value to determine if the stock is underpriced or overpriced.

Technical analysis, on the other hand, employs previous charts, patterns, and trends to predict the entity’s price movements in the future. There are also other factors that will assist you in analyzing how the market will perform:

  • Press releases (nearly all that happens in the financial community is defined by the media)
  • Integration (how blockchain is handled by various payment schemes and exchanges)
  • Capitalization 
  • Key events inside the project (updates and security changes, for instance)

Your knowledge of maps and technical analysis has now led you into the mysterious world of price predictions and forecasting. Cryptocurrencies may only go up or down in theory, allowing long-side or short-side trades. Price fluctuations can go on for days, and even weeks.

They will move in all sorts of unpredictable directions, which is why it’s crucial to examine price predictions prior to making a decision on when the best time is to invest in a cryptocurrency.

4. Practice Makes Perfect

Before heading all-in on trading, do a bit of practice first. To test your crypto trading knowledge you can take quizzes and make use of many other sources online. CFDs and other financial instruments may be used to bet on the valuation of different crypto coins.

CFDs allow you to benefit in some way from market fluctuations without having to purchase the underlying assets, so you won’t have to think about the security of your coins.

Moreover, traders must learn to live in harmony with the conflicting feelings of greed and anxiety. You can practise virtual trading, however, these feelings can only be felt when there is a real benefit or loss.

In reality, this psychological component of the game eliminates more first-year players than poor decision-making. As mentioned above eToro offers a virtual sum of $100,000 so you can test your trading skills.

5. Always Keep Looking For More Ways To Learn

Though experience is a great instructor, don’t forget to continue your education as your trading career evolves and develops. Ebooks and classes, whether online or in person, can be helpful, and they range in difficulty from beginner (with tips about how to interpret the aforementioned analytic maps, for example) to advanced versions. 

Online trading courses are helpful as well. Here at Trading Education, we have prepared free trading courses that will help you learn crypto trading faster.

More advanced lectures, which are mostly led by a seasoned broker, may offer useful insight into the overall economy as well as a detailed investing strategy. Most of them concentrate on one cryptocurrency, one aspect of the market, or one trading strategy. 

Others will be scholarly, and others will be more like conferences in which you will deliberately take seats, carry out entrance and exit tactics, and participate in other activities.

It’s also a good idea to find a mentor- someone who can direct you, criticize your technique, and give you advice. You should order one if you don’t know one personally. As part of their continued education services, several online trading schools have mentoring as an extra service.

trade cryptos

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

Control And Succeed

Once you’ve got your real money account up and running, you’ll need to think about position and risk management. Each position has a holding period and technical parameters that favour profit and loss targets, necessitating a quick exit when those targets are met.

Consider the mental and logistical demands of holding three to five positions at once, some of which are moving in your favour and others which are moving in the opposite direction. Fortunately, as long as you don’t overload yourself with so much detail, you’ll have plenty of time to learn all aspects of trade management.

Start a daily journal now, if you haven’t done so already, that logs all of your trades, including the reasons for taking a risk, holding times, and final profit or loss figures. This journal of events and observations lays the groundwork for a trading edge that will put an end to your inexperienced status and enable you to consistently profit from the market.

Final Thoughts

Crypto trading may be intimidating at first, but it is worth the try. If you’re eager to begin trading this year, make sure you educate yourself on the topic by using all the available resources mentioned in this guide. You should define the objectives and devise a strategy to achieve the goals you aim for. 

Take it slowly and master more of the fundamentals before choosing to invest. The more you learn, the more likely you are to make choices that will align with your long-term ambitions and priorities.

eToro – The Best Platform To Trade Cryptos 

eToro have proven themselves trustworthy within the crypto industry over many years – we recommend you try them out.

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.