If you’ve heard about cryptocurrencies and you’re looking for a guide on how to trade, then you’ve come to the right place. This article consists of information about cryptocurrency trading for beginners. Here, you as our reader will know about the basics of crypto trading, as well as a short introduction to cryptocurrencies, how cryptocurrency trading works, its advantages, and a short introduction on how you can start trading. After you’re done reading about the fundamentals, you may also have access to a list containing the top brokers we recommend for beginner traders.
Best Ranked Brokers for Online Trading
4.7 / 5
✅ Trusted and well-established
✅ Offers CFD & Crypto Trading
Before delving right into cryptocurrency trading, it’s important to understand what cryptocurrency is first.
The term “cryptocurrencies” is the name used for digital currencies. Bitcoin is the most popular cryptocurrency, partly because it was the first one released in 2009. The reason why cryptocurrencies like Bitcoin are well-received by investors is because it uses blockchain technology, making it one of the most secure currencies in the market.
The decentralized technology used by cryptocurrencies allows users to make secure transactions online. It also doesn’t require users to visit a bank or use their real names for these transactions. The blockchain, which is also a public ledger, keeps an updated log of all transactions by currency holders.
In the past decade, more than 900 cryptocurrencies have shown up on the Internet. Some of the most popular are Ethereum, Litecoin, Stratis, and Bitcoin. Cryptocurrency trading is similar to Forex, where these cryptocurrencies are invested, traded, and bought in the market. Think of it like the usual Forex, but allows the use of Bitcoin and other cryptocurrencies rather than only using USD, GBP, and many other currencies.
Crypto trading doesn’t require the use of a mining hardware, nor does it require users to invest in Bitcoin cloud mining (which, by the way, comes with a lot of risks). Users can start by signing up in cryptocurrency trading platforms, which are basically the site where online currency exchanges occur.
One of the reasons why trading with cryptocurrencies is continuously gaining popularity is because of the fact that cryptocurrencies have become a popular and conventional investment option. On the other hand, cryptocurrencies are generated using a process called mining, and uses a decentralized system to handle peer-to-peer transactions, making it secure to invest and trade.
More importantly, cryptocurrencies use the blockchain technology, in which the cryptocurrencies themselves create digital ledgers which authenticate and record all transactions that have occurred in one particular cryptocurrency. These ledgers prevent people from spending a single cryptocurrency twice, making it even more secure and fraud-proof.
Some prominent platforms for trading cryptocurrency are Bitstamp, Coinbase, BTC-e, and many more. More information on cryptocurrency trading will be explained in the following sections.
When to Trade with Cryptocurrencies?
Investing and trading are two different activities in the cryptocurrency market. Investors are users who spend real money to buy a cryptocurrency in the hopes of its value rising in the next few months. A trader, on the other hand, exchanges cryptocurrencies for the purpose of receiving a different type of cryptocurrency.
While it’s true that those who have started investing and trading early on have mostly become millionaires by now, it’s not too late for you to gain profit from this if you’re just about to start. Before you start trading however, there are things that you first need to understand before you get right into buying and selling cryptocurrencies. One of those is technical analysis.
Technical analysis involves observing and studying the rise and fall of the prices of cryptocurrencies in the market. By doing so, you get to spot the most profitable opportunities to trade. Technical analysis helps you to avoid making mistakes such as selling when the price falls and buying when the market price starts to rise, as most inexperienced traders would do.
In technical analysis, there are factors that help to predict when it’s time to trade your cryptocurrencies. Indicators can be found in the candlestick charts that people often see in their bitcoin trading platform. By studying these charts and by practicing predicting when the prices rise and fall, you’d be able to tell when it’s the best time to trade or not. Trends, although not recommended 100% for beginners, still have an important role to play in determining patterns in the charts based on the falls and rises.
Other things you should watch out for are volumes (amount of cryptocurrencies being traded); moving averages (helps to see price trends better); patterns, and a lot more. For the serious trader who wants to excel in this industry, then these elements are of utmost important. However, for beginners, signing up for a broker might be a more viable choice.
In addition to learn about technical analysis, it’s also important to read about and stay up-to-date with news on the cryptocurrency market, as well as sticking to fundamental information about cryptocurrencies. The bottom line here is that while technical analysis is not a strategy per se, it is a tool which will help you identify gainful and profitable opportunities for you as a trader.
If you’re at a loss as to how and where you can start trading, there are guides available online that contains helpful information for beginner traders. At TradingToplists.com, there are a number of brokers you can sign up with. There are brokers who offer video tutorials, guides, and even demo accounts to help you become familiar with the process before diving right into actual trading. These are a just a click away, and this way you’d be able to form a sturdy foundation before you take a risk.
Trading with Cryptocurrencies Explained
As mentioned previously, trading cryptocurrencies means that you exchange one coin for another. In Forex, for example, you exchange one currency for another currency while staying within its market value. In crypto trading, you can exchange your Bitcoin or Litecoin for USD or GBP or vice versa. This is how people involve themselves in the cryptocurrency market without having to mine it themselves.
The cryptocurrency market is open 24/7 compared to the stock market which closes at certain times of the day. This way, you’ll get more opportunities to monitor the rise and fall of prices, especially if you’re planning to trade anytime soon. In learning bitcoin trading how to, it’s important to first familiarize yourself with the process before plunging right in. This ensures that you’d be able to build a good, strong foundation of knowledge to minimize risks and to maximize profit opportunities. The following is what cryptocurrency trading typically looks like.
So how does it go for traders who want to open a trading account at TradingTopLists.com?
The first thing you’ll have to do is to scroll up on this page and see the list of top brokers. From there, carefully read up on the reviews for each broker and see which one fits your needs the most. Here at TradingTopLists.com, brokers are carefully reviewed so that readers will easily see the terms required by each broker (e.g. minimum deposit, fees, etc.)
Note that each broker is different from the other. Overall, the range of services brokers could give traders are from multiple language support, demo accounts for beginners, 24/7 support, and many more. While it’s a matter of personal choice to you, it’s highly important to weight all these choices in order the get the most from your trading experience.
This is why we have only reviewed licensed brokers, all of which we’ve checked manually before adding to our list. As a trader, it is your choice if you want to sign up straight away, or to drop by our reviews page first before making a decision.
Best Brokers for Cryptocurrency Trading
While there is no perfect broker out there, some brokers offer better options which might work for you better than the options offered by another broker. A lower minimum deposit may work for you, or maybe you just need a broker that allows you to make a demo account for practicing. Some are beginner-friendly, yet there are others that cater to more experienced traders. This way, it becomes emphasized that your choice of broker should depend on the customer and his or her needs.
Here are some tips on how to choose the best broker for cryptocurrency trading.
Offers your chosen cryptocurrency
This is probably the most important factor to consider when choosing a cryptocurrency broker. There’s no use signing up for a broker that doesn’t trade in your preferred cryptocurrency.
The most common cryptocurrencies offered by most brokers are Bitcoin, Ripple, Ethereum, and Litecoin. Newer cryptocurrencies might not yet be offered, especially if they haven’t risen to popularity in the market yet.
Protection against negative balance
Some brokers offer a Negative Balance Protection, a feature which prevents customers from gaining too many losses by terminating a trade automatically. This is a useful feature which prevents traders from losing more than they have invested.
Since the crypto trading industry is so volatile, the market prices are constantly rising and falling, even falling to the point of crashing. This is why it’s important to go for this feature when choosing a cryptocurrency broker.
Offers lower spreads
Another thing to consider is the spread, which is the difference in the value between buying and selling a cryptocurrency. A spread is the fee paid to brokers for doing the trade for you. Think of it like a service fee. Take note of the spreads so that its amount is less than what you actually profit from the trade.
Here at TradingToplists.com, we aim to review, inspect, and present only the most reliable and trusted brokers in the cryptocurrency market. In addition to bitcoin best trading platform, brokers are indispensable tools to use especially if you are a beginner trader. This is why it’s important for us that traders who visit our site get full view of our featured brokers so that they’d be able to make the best choice for their needs.
All the brokers in our list are licensed and inspected by their respective countries’ national finance authorities. Most of the brokers featured are registered in EU countries, which mean that they are fully licensed to operate in all parts of Europe. In addition, certified EU brokers are considered to be some of the safest and most secure brokers to deal with. The best part about it is that they can cater to traders from Asia, Australia, Middle East, South America, and the US.
Advantages of Trading with Cryptocurrencies
Since the release of Bitcoin, there has been a steady rise in crypto trading from which traders have gotten huge amounts of returns over their months and years of trading. Here are some of the best known advantages of trading with cryptocurrencies.
Trade markets are open 24/7
While the US stock market’s operating hours is only from 9:30 am to 4:00 pm on Mondays to Fridays, the cryptocurrency market is open 24 hours a day for 7 days a week. This makes the market accessible even for people who are busy during the day, allowing them to trade at night after getting off work, or even on weekends. Trading with stocks during the day can be challenging for people are mostly at their busiest during the day.
Cryptocurrencies are much more volatile
Cryptocurrencies have more volatility compared to other currencies on a weekly and daily basis. If you are a day trader who prefers short-term swings, then crypto trading is perfect for you. The usual movement of the prices of Ethereum and Bitcoin for example can range from 5%-10%. If you can master technical analysis, you might be able to spot huge moves in the prices and therefore be able to trade for more profit.
No rules on pattern day trading
With cryptocurrencies, the number of trades you can make in a day or a week has no limits as long as you have the fund. A person can open his or her account for $100 (depending on the minimum amount required by a broker) and can trade as many times as he wants in a day. With the right strategy, you can use this to your advantage to get earnings much faster.
Not much equipment needed
Trading cryptocurrencies doesn’t require you to set up a computer with 4 monitors. The cryptocurrency trading system doesn’t have a “market open,” which means you don’t have to monitor the charts of the different cryptocurrencies for any movement. The best thing about cryptocurrency trading is that you can trade even from your smartphone. This makes it much accessible and easier than traditional trading.
Traders can choose to either make this their main source of income, or a hobby from which they can profit on the side. Because the market is open 24/7, you don’t have a limit as to when you can invest, nor does cryptocurrency trading require you to sit in front of your computer and monitor the movements all throughout the day.
With cryptocurrencies, you can simply log into your account in your mobile phone and check it from time to time. Whether or not you are a serious trader, you’re sure to gain profit from trading as long as you know how it works.
Most brokers offer demo accounts for beginners, giving them the opportunity to practice before actually trading. Here, you can practice predicting and studying the Candlestick Charts for each currency to get a feel of how it would be should you decide to start trading actual cryptocurrencies. In addition, there are also guides and tutorials that will better help you understand what you need to know in terms of checking the movements in the prices of cryptocurrencies in the market.
The best advantage probably is that any individual can start trading right away, and all they have to do to begin is to sign up with a licensed broker.
How to Start Trading with Cryptocurrencies
Reading up on crypto trading and learning all there is to the fundamentals is only the beginning of your cryptocurrency trading journey. Once you’ve grasped the basic concepts and have already done your research on how this trading works, you’re now ready to learn how you can start the actual trading.
The following are the most basic steps on how you can start trading. Note that these steps may vary depending on the broker that you will sign up for, but these are basically the procedure used by a majority of brokers.
Sign up with a broker
The first thing you’d want to do once you’ve selected a broker is to sign up and confirm your account via email. Note that you should use
Fees – look for a broker that offers the lowest fees possible. Also, make sure that the fees you are paying the broker is not equal to or more than what you will be gaining from trading.
Trust and regulation – make sure that the broker you will be signing up for is regulated by a regulatory body that’ll oversee all its activities. Most brokers that are trusted and regulated offer full deposit insurance. European brokers are regulated by CySEC, while Australian brokers are regulated by ASIC.
Leverage – this powerful tool is utilized by experienced traders to make sure they receive benefits even from the tiniest movements in the prices of cryptocurrencies. Beginners, however, should use this with caution since it’s more tailor-fit for the traders who have already built a good foundation.
Type of cryptocurrencies – check to make sure that the broker offers the cryptocurrency you want to trade in. Otherwise, there is no point in signing up for them.
Choose your cryptocurrency
Once you’ve signed up for a broker and have read the terms and conditions, make sure that the broker you are looking at offers the cryptocurrency you want to trade in. Transfer funds into your account and select the currency you wish to trade in. Most brokers allow traders to transfer money to them via bank wire. Once you’ve done so, you’re balance will be reflected into your account shortly.
Start buying and selling
Choose your desired market in which you will start trading for cryptocurrencies. Analyze the market first, and check for the best price. Agree to it, and place an order. If you have sufficient funds amounting to the price of the currency you are ordering, all you have to do is wait for someone who has your desired currency to make the trade.
Other tips to consider
One important thing to consider when trading cryptocurrencies is the current price of the coin you would like to trade at. Is the price currently low? Are you predicting a steady rise within the next few days?
Buying cryptocurrencies should not only be based on its current price, but rather should be based on a combination of different factors such as valuation, trends, available supplies of the coin, the technology used by the coin, as well as the targeted market.
If you want to maximize your gains, it’s important to apply the principle of “buy low, sell high” – which most experienced traders use as a strategy. This is why you need a guide to how you will be able to gain the most from your trading.
Our guide at TradingToplists.com contains all the information you need when it comes to choosing the right broker for your trading ventures. Feel free to read through our reviews, and check out the features that are important to you as a trader. No matter what your experience level is, it’s always important to take a look at the tools you can utilize to make your first venture into cryptocurrency trading fun and profitable for you.
Most Popular Broker This Month
Trade with InvestMarkets
CFD, Forex & Cryptocurrencies
One of the leading brokers on the market Regulated by the IFSC (Belize) Offers demo accounts for new traders Low minimum deposit ($250 USD)
TradingToplists.com lets you find the best deals and brokers within CFD, Cryptocurrencies, Commodity Trading, Forex, Stocks and many other trading products. We offer the latest news as well as comprehensive guides and broker reviews.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.
TradingToplists.com and our partners are not liable for losses or damages as a result of the information provided on our sites, trading guides or reviews. If you have inquiries, please don’t hesitate to get in touch with our customer support.