Trading on the platform is the receipt of income from the difference in the rates of various assets, such as cryptocurrencies, gold, paper currencies or stocks. But in order to start trading on the exchange with other assets, confirmation of the status of an accredited investor or payment of a broker is required.
The cryptocurrency market capitalization is extremely small compared to the stock market, but despite this, you can make money on the cryptocurrency exchange much faster. This is due to the cryptocurrency volatility, which is much higher than that of securities.
Cryptocurrency exchanges are suitable both for professional traders who came from stocks and for ordinary users, investors, and miners. You can use these platforms both for trading and for purchasing tokens for investment purposes.
To start trading you will need to find a reliable trading platform that will suit you. Next, you will need to open an account, go through verification and replenish the deposit. Then you need to open an order to buy the right asset at the right price and get the asset. Open an order to sell it at the right price, get the money and repeat.
If you want to try yourself in trading, but are afraid to risk money, then you can use the demo version of accounts. On them, novice traders can learn how to work with the terminal, various assets and orders, and more experienced ones can test their strategies.
Trading on the stock exchange or with a broker, like any other financial activity, requires systematization and a certain strategy. It is the strategy that determines when to buy and sell, which assets to trade, and which orders to use.
Experienced traders, as a rule, form their own strategy, and beginners can use such established patterns as:
- Scalping is super-fast trading, in which transactions are made several times per hour, and the main profit is provided by short-term and insignificant fluctuations in the rate. Risks are minimal because you don’t need to calculate the trend for several months or days, but you can earn only with high volumes;
- Hodl is a strategy that is based on long-term forecasts and is designed more for investors than for traders. The crypto market has not taken root too much, but private share purchases often occur precisely on the basis of the buy and hold principle;
- A positional strategy is when a trader conducts a transaction only in a certain position, for example, buys an asset as soon as the trend reverses from bearish to bullish. The main thing is to correctly determine the position. On average, transactions with a positional strategy are concluded once a day or several days;
- The use of cycles and corrections – any asset, especially cryptocurrencies, has a market cycle, including price increases, reaching a peak, correction and reaching a local minimum. The cycle, as a rule, takes place within the framework of the trend and lasts from several days to several weeks. In this case, a price difference is formed at its various stages, which allows you to earn.
These are the general strategies of traders that are used both in the stock Forex and crypto markets.
However, before you start working with a broker or an exchange, try to learn as much as possible about asset markets, the fundamentals and basic concepts of trading, strategies, charts, and much more. After that, conduct your own investigation of the platforms you would like to work with. Pay attention to trading conditions, regulation, safety and its convenience.