How To Make Money Trading Cryptocurrency: Strategies For Beginners
Cryptocurrency is something that you probably have heard of in recent years. Back in 2009 when Bitcoin was first introduced to the world, a lot of people were doubtful of its value and legitimacy. Fast forward more than a decade later to 2020, Bitcoin is valued at around $10,000 per coin!
Who would have thought that these digital currencies would be worth that much? Due to the high value of Bitcoin and other altcoins, a lot of people have become interested in the crypto market.
This article will teach you some basic strategies on how to make money trading cryptocurrency.
Can you Make Money from Trading Cryptocurrency?
You can easily learn how to earn money even as a beginner. Yes, you read that right! Although making money from trading cryptocurrency can be quite challenging, once you have learned the basic strategies, you will be able to test these out and start making a profit almost immediately.
Trading cryptocurrency comes with risks, so be sure that you will be investing money that you can afford to lose. If you invest the time and effort into learning all about cryptocurrency trading, you will be rewarded with good profits and minimal losses.
The first things you will need to do are to join a cryptocurrency exchange and get your own crypto wallet. For the crypto exchange, one of the best exchanges you can join in 2020 is Binance. This exchange offers thousands of different coins, including Bitcoin, top altcoins like Ethereum and Ripple, as well as new and up-and-coming altcoins.
When using Binance, you will be able to see different charts depending on your settings. You will be able to see price changes within a set time frame of your choosing, coin volume, market prices, and more! For beginners, this is a great exchange to join because you will be able to familiarize yourself with the different coins, charts, technical indicators, and trends.
As for your crypto wallet, a great option is Coinbase. This wallet is also a crypto exchange that is being used by millions of people from all around the world. One great thing about Coinbase is that it insures your money up to $250,000. This will give you a better sense of security that the money and coins you are trading are in good hands.
How to Make Money Trading Crypto
Cryptocurrency trading can make you money, but you first need to learn the strategies that will help you earn that profit. Beginners can easily learn these three basic strategies to get started in trading. Whichever strategy that you choose to apply will depend on your goals in trading crypto.
Buy and Hold
This strategy is one of the most popular methods to earn money trading crypto. It is very easy to do and provides a great opportunity to earn a profit. However, this strategy is meant for those people who are willing to wait a long time before making money.
Buying and holding means that you will need to buy a cryptocurrency and hold on to it for a long time. This is one of the best ways to passively invest in cryptocurrencies. Think of it as a long-term investment. You put your money in the market to purchase a coin, and wait for its value to increase, before selling it at a profit.
This strategy will be good for you if you have the time and the budget to invest long-term. It is not for people who want to make a quick profit. If you want to do this strategy, it is recommended that you invest in coins that have high market caps and are more stable, like Bitcoin, Ethereum, Ripple, Litecoin, and other top altcoins.
Staking is a bit like the buy and hold strategy. This strategy involves buying a cryptocurrency and holding on to it. However, you can receive an interest or dividends by holding on to your coin. But how is this possible?
Some currencies will pay the buyers to hold on to the coins that they bought. This will ensure that the coins remain in circulation with the possibility of increasing its volume. However, you cannot use this strategy on all the cryptocurrencies in the market. You can apply staking only to a few altcoins like Neblio, Navcoin, and Komodo, among others.
Day trading is another popular strategy in cryptocurrency trading. This strategy is for people looking to make a quick profit. In day trading, all the trades are done within just 24 hours. This means that you will be able to know if you have made a profit or if you lost some money once the 24-hour period is over.
A lot of day traders prefer this strategy because of the instant gains that can happen. If you buy coins in one hour, you could possibly sell these same coins for a higher amount in the next hour.
This strategy takes advantage of the ups and downs of the market. Although it is a lot more complicated compared to buying and holding or staking, day traders can make a lot of money if they apply the correct strategies.
It may seem intimidating, but this strategy can also be done by beginners. You will need to study how to read a trading chart. Also, you must learn a few basic technical indicators that will help you decide when to buy or sell a coin.
Day trading is the right strategy for you if you are looking for a short-term investment. It is also a good strategy if you have the time to spare because day trading will require you to constantly check the charts for price changes during the day. Want more awesome tips on trading cryptocurrency? Go here!
These strategies on how to make money trading cryptocurrency are suitable for beginners. If you stick to your strategies and take time to learn the market, you can soon become a very successful cryptocurrency trader.
UPDATED April 6, 2021
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