Getting into crypto is far less risky than it used to be. However, becoming a crypto trader, especially a day trader, is still a fairly volatile career. You’ve probably heard horror stories about people investing their complete savings into various coins, only to be eliminated shortly thereafter.
The only way to avoid such a grim destiny is to be as prepared as you can be before you head in. Coincidentally, that’s exactly what we’ll try to achieve with this guide – arm you with the necessary information to get started. With that said, let’s jump right in.
Choose a Wallet
Before you can make your first trade or even acquire any crypto, you need to have a wallet. A wallet is a digital safe that is used to keep your cryptocurrencies. Wallets can be software or analog.
Software wallets are fairly safe and the most commonly used options. However, many high-rollers and traders who float a lot of coin use analog, physical wallets. For one, they’re offline, which makes them much safer. The issue with physical wallets is their often high price. You’re paying a premium for the extra security.
A software wallet will do just fine for a beginner. As far as selecting the right one goes, there are many attractive options.
Exodus is an awesome wallet for those who do most of their trading from a desktop computer. It supports just about every coin that matters and it’s proven safe. If you’re into mobile wallets, something like Trust is a perfectly good choice.
Whatever wallet you choose, make sure to write down the seed recovery phrase as that is the only way to gain access to your wallet should you lose the password. If you lose the seed phrase, your funds are gone.
Find a Trustworthy Exchange or Platform
Now that you have your wallet all set up, it’s time to figure out where you’ll be doing most of your trading. Places such as Binance.com are a proven deal. This is one of the oldest exchanges that have a good reputation.
One way to tell if a platform or exchange is solid is to do a background check on it. Look at various reviews and see if there are any serious breaches of privacy or trust. Additionally, look for a high trading volume.
Trading volume isn’t only a measure of the trustworthiness of a platform, but it’s also a way to tell how many coins you can move at any given time. No skill or knowledge in the world will help you close a fantastic trade if there’s no one to buy what you’re selling.
Here’s a shortlist of solid exchanges:
- Binance
- Coinbase
- Bittrex
This list can be much more extensive, but these will do just fine until you figure out the basics of trading.
Learn the Basics of Technical Analysis
The world of crypto trading and classic stock trading shares more similarities than either side is willing to admit. Technical analysis, or the skill of recognizing emerging patterns in a given market, is crucial.
Sure, the world of crypto is much more volatile than stocks, but the core basic rules still apply. There are many awesome resources online where you can find great info and learn the basics of TA. Just be ready to study, which is proving to be difficult for traders who are eager to get their hands dirty.
Aside from TA, there are other, crypto-specific things to learn. Follow some of the larger traders and subscribe to their Twitter feeds. You’ll learn a lot that way alone.
Tools
Once you get comfortable trading, you’ll notice that timing is everything. Gaining the edge in a busy exchange requires the use of certain tools. Granted, this is more of an optional thing than a necessity.
So what kind of tools are we talking about here? Take a closer look at Bitcoin Trader first. This is essentially a robot that allows you to execute trades faster than the competition. We’re talking milliseconds. Robots such as this one are used all across different markets and are sometimes the only way to get anything done.
All that being said, working with advanced tools such as these require you to have a solid foundation of knowledge and skill. Without that, you’re taking a shot in the dark.
Never Trade More Than You’re Willing to Lose
If there’s anything you should take away from this short guide, it’s this. Trading crypto is thrilling, some would even say addictive. There will be dozens, if not hundreds, of situations where you’ll be tempted to go all-in on a coin.
Don’t do it. You need to play it smart. Especially in the beginning when you’re still getting a feel for everything. Instead of going all-in on risky trades, try to only risk a fraction of your portfolio. Speaking of which, work towards diversifying the said portfolio.
Patience is Key
Being patient is absolutely key in crypto trading. There will be time to act quickly, but you’ll often find yourself buying what appears to be the top of the graph. Panicking and selling on the dip is one of the most common mistakes new traders make.
Be patient and assess the situation. If you’ve bought into a new, high-risk coin, then sure, by all means, exit that position. But if you bought something big such as BTC or ETH at an unfavorable position, it’s better to wait than sell at a loss. That whole HODL philosophy isn’t just a meme, it’s actual philosophy.
Learn to Take a Hit
At the end of the day, learning how to pick yourself up after a failure is what it all comes down to. Accept right away that you’ll make mistakes. No one was born skilled, full of knowledge, and with a perfect sense of trading.
You’ll have losses. That’s inevitable. It’s how you deal with those losses that will define you as a trader. All that benignly said, there’s still money to be made in this business. Cryptocurrencies are on the rise, and they are yet to reach their full potential. Getting into it now is the right time, for sure.
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