Cryptocurrency trading has attracted many people from almost all parts of the world. With the increasing number of advertisements about cryptocurrency trading all over the internet and social media, it is no wonder that a lot of people are interested to invest in it.
When first starting out, you will need enough capital that can help you begin trading. This capital will serve as your starting point to be able to earn profits from. A lot of beginners have asked this question: How much money do you need to start trading cryptocurrency
This article will provide you with solid advice on how much money you need and how to start spending it for trading.
Learning The Trade
Starting trading can be very scary, and it is even scarier if you attempt to go in blindly. As a beginner, the first step you should do is to learn how to trade cryptocurrency. There are thousands of altcoins available in the market as of 2020, and beginning to trade does not necessarily mean immediately buying the coin with the highest or lowest price.
When first learning how to trade cryptocurrency, you should perform several practice trades first. These practice trades are also called paper trades, where you follow the market trends and note down the details of each trade you make on a piece of paper. This way, you will not be losing any actual money, and you get to study the market at the same time.
Paper trading has already come a long way from the pen and paper of old. Many digital trading platforms now offer free paper trading simulators if you create a trial account. These simulators allow you to experience trading, complete with all the charts, price movements, and trends. If you want the complete experience while still practicing trading, simulators are a great option.
You should learn the proper techniques and develop your own strategies first before beginning to trade cryptocurrency. When you are ready to start with actual trading, begin with a small capital.
At the beginning, your goal should be to learn the trade first, and not to make a huge profit immediately. Be sure that you select a reliable trading platform that has a long list of coins for you to trade.
You can start trading around $50 to $100, or any amount that you can afford to lose. As a rule, you should never put in money that will significantly affect your welfare or economic standing. Only invest the money that you can afford to lose. This rule holds even when you begin to move on to bigger trades.
Once you are ready to begin trading with bigger amounts, you can start with at least $500 to $1,000. Most people start with this amount.
When first starting out, an average trade can earn you a profit of 2 to 3%. If you have seen marketing campaigns with testimonials from people who claim to have earned a 20% profit on their first try, this is highly unrealistic. Stick to your goal of 2 to 3% for your first few months up to the first year of trading.
As a beginner, you can set your target to execute a trade at least once a day. If you have invested $1,000 as your starting capital, a 3% profit will make you $30 per trade.
If you want to earn at least $500 per month from cryptocurrency trading, you need to make at least 16 to 17 successful trades in a month, at a 3% profit.
You also have the option to start with a much larger capital. This will increase your potential of earning a larger profit, but it will also increase your risk to suffer larger losses. For example, if you have a starting capital of $5,000, 3% of that is $150. If you want to make $500 per month, you just need to complete 3 to 4 successful trades for the entire month to reach your target.
Is Trading Cryptocurrency Worth It?
The question whether trading cryptocurrency is worth it, all depends on how much time and money you are willing to invest in it. When trading cryptocurrency, everyone will experience losses. It is not as easy as just buying and selling, because you need to learn how the market moves and how your coins fair with these price movements.
If you plan on trading cryptocurrency for a living, or for some extra income, it is recommended for you to thoroughly study the market and practice trading first. Cryptocurrency is not a get rich quick scheme; you will need to put in the effort to become a successful trader.
Once you learn the tricks of the trade, make sure that you start with a small capital and work your way up. Do not just invest in coins blindly, because you can lose all the money that you put in.
To make trading cryptocurrency worth it, be sure that you have a clear objective for yourself when trading. Do you want to trade coins to make a large profit? Do you want to become a full-time trader? Are you trading just to earn extra income? Are you trading to increase your crypto asset portfolio and holdings?
The answers to these questions will determine whether trading cryptocurrency is worth it for you. Remember that trading is not just buying and selling; it involves learning the process, studying the market, and executing controlled trades to avoid risks. Discover more about cryptocurrency day trading here!
How much money do you need to start trading cryptocurrency? When you are still learning the trade and practicing your strategies, it is recommended to just invest a small amount, around $50 to $100. Once you get the hang of your trading strategy, you can invest a larger amount. The average range of a starting capital is $500 to $1,000.
When trading, always remember that the amount you invest should be money that you will be okay with losing. Investing more than you can afford in the hopes of making a profit is risky and not advisable.