The Ultimate Guide to Cryptocurrency Trading

First, congratulations! You’ve just found something few cryptocurrency beginners ever find—an ideal starting point. This guide gives you a variety of approaches to get started via safer, simpler, more effective ways to lower your risk and increase your returns, either as a conservative cryptocurrency trader or as a more passive longer-term investor seeking exposure to assets that have a diversified product portfolio, including exposure to the cryptocurrency market.

What are Cryptocurrencies and why were created

Instead of getting too technical, here’s the easiest way to think about cryptocurrencies.

Cryptocurrencies are basically the money on the software platforms.

It’s important to keep in mind that the companies that are behind these cryptocurrencies are not only creating a new form of currency but a new software platform.

Examining how these platforms work (the so-called “fundamentals”) will help you understand cryptocurrencies.

On each of the platforms like Windows or Dropbox, a type of money is used, in exchange for using the platform. Each of these systems also has a database connected to it. Cryptocurrencies essentially replace the US Dollars (or your local fiat currency) that you use to purchase these software services. The “database” that cryptocurrencies give you access to is based on blockchain technology.

But wait, what are the software services that you are getting? Isn’t a cryptocurrency like Bitcoin just a currency, like US Dollars?

Not quite.

The goal of cryptocurrencies is usually to improve on some type of existing software system or network. Cryptocurrencies like Bitcoin want to make financial transactions more open and accessible to everyone around the world. Other cryptocurrencies like Ether, Litecoin, and Ripple solve other problems.

As you’ll learn more about the cryptocurrency market and you’ll actually start investing in Bitcoin and other digital currencies, you’ll find that there are tremendous opportunities. With some cryptocurrencies, it’s potentially like being able to get pre-IPO shares of Apple or Google.

Continue reading for more information or start trading cryptocurrencies and notice how digital currencies can make you serious money today. Use code WELCOME20 at registration to get $20 welcome bonus.

Cryptocurrency market - higher volatility and less liquidity

The cryptocurrency market may be more volatile than one might think. There are numerous instances when the price of Bitcoin, relative to the U.S. dollar has turned erratic for a number of reasons.

Volatility is not something new to the investing world and any type of market has undergone extreme volatility. One of the fundamental reasons why shares, commodities or currencies turns volatile is because when some news or information is released which is not discounted by the markets already.

The volatility that follows later, which can result in either a sharp appreciation or depreciation of the security’s price in question is simply a result of price adjusting to the new piece of information. In the Bitcoin world, volatility is for the same reasons, but also additional factors such as regulatory warnings from agencies, a hack into an exchange and so on.

The limited liquidity and availability of Bitcoins mean that just a few transactions can quickly and significantly impact the price of Bitcoin. Proponents of Bitcoin claim that volatility will settle as the technology matures and Bitcoin becomes more widely accepted. If one looks close enough, you can see that the volatility in Bitcoin has been steadily falling over the past couple of years, while liquidity is increasing fast.

The most popular form of cryptocurrency trading

Only those with specialized, high-powered machinery are able to profitably extract bitcoins nowadays. While mining is still technically possible for anyone, those with underpowered setups will find more money is spent on electricity that is generated through mining. In other words, mining won’t be profitable on a small scale unless you have access to free or really cheap electricity.

Instead of time-consuming, high costs mining unsuited for most people, there is an alternative way that doesn’t require dedicated hardware or virtual wallet, nor investing in bitcoin hyips or bitcoin cloud mining.

The most popular form of cryptocurrency trading - CFD trading - enables you to speculate on the rising or falling prices of the fast-moving global cryptocurrency market (or instruments) such as Bitcoin, Ethereum, Litecoin or Ripple.

Contracts for difference (CFDs) let you go long or short on cryptocurrencies, without needing large amounts of money to get started.

There are 2 major advantages:

The potential for a better risk/adjusted returns

CFDs are a leveraged product, which means that you only need to deposit a small percentage of the full value of the trade in order to open a position. This is called ‘trading on margin’ (or margin requirement). The availability of leverage in cryptocurrency trading magnify gains and losses, creates the unmatched profit potential for those with limited trading capital IF they learn how to control the downside risk. For example, with 5:1 leverage in cryptocurrency trading, a 20% price fluctuation means 100% profit. It also means a 100% loss.

As easy to profit in bear markets as in bull markets

In Cryptocurrency CFD trading it’s as easy to profit from falling prices as from rising ones. You can also use CFD trades either to speculate on movements in financial markets or to hedge existing positions or your existing crypto portfolio.

Example: selling short CFDs on Bitcoin with the scope of offsetting exposure to price fluctuations in the opposite direction with a previous Bitcoin purchase or holding. The hedging method can also be used when a Cryptocurrency has reached your profit target and you want to lock in gains without actually selling them.

How do you value a cryptocurrency

Very simple is just about how much SUPPLY there is and the nature of the DEMAND. To measure supply and demand for a given instrument one needs to look at the charts. That’s because a chart is a shortcut of looking at all the available news and data since the price chart factors in all the fundamentals and quickly show you who’s winning the battle between the buyers and the sellers.

This is especially important in Cryptocurrencies because there is so much news and technologies from so many different sources and it’s impossible to keep track of all of it.

And there are some amazing benefits of learning how to read the charts to really help boost your profits and decrease market risk via the use of Technical Analysis and its concepts.

Technical Analysis is the study of the behavior of the market and market participants. We try and identify the direction of the primary trend and invest accordingly. As Technicians, we can apply our price-focused approach to any market, whether it’s stocks, commodities, currencies or even Bitcoin. If it is liquid and driven by the supply and demand dynamics in that particular market, then applying our methods of price analysis makes perfect sense and it works very well.

Traders and investors really enjoy it, whether they are actively trading it or just interested in the product.

Cryptocurrency needn’t be any riskier than other markets

The cryptocurrency market has a gotten a reputation for being excessively risky due to a combination of:

  • High failure rates due to beginner traders who failed to do their homework and understand the risks associated with the high volatility and leverage commonly used in most cryptocurrency trading.
  • Brokers who failed to provide sufficient training to deal with the risks of using leverage in volatile markets.
  • Crypto exchanges who failed to meet their financial obligations due to poor regulations and client protection.

However, you can reduce and manage the risks. There are:

  • Highly regulated brokers, like, that offer the highest level of security protection and allow you to adjust your exposure down to what you can handle, and provide guidance on the appropriate level.
  • Alternative ways to benefit from cryptocurrency, which are no riskier than stock trading.
  • A variety of techniques to reduce risk in trading, as well as new instruments for simpler, safer cryptocurrency trading: social trading or robo-advisor.

Making money trading cryptocurrency can be easier than in stocks and other more traditional asset markets, particularly in bear markets. Until recently, there was no single source to invest in the crypto market via professional money managers or robo-advisors. No longer. This is the only crypto trading account to gather these tools into one collection.

Understanding what is cryptocurrency market and how does it work is important, but if you want some help, sign-up and our trainers with offer you step-by-step guidance to get started. Play around in a crypto ​demo account and notice how cryptocurrency trading can make you serious money today. 

>> Use code WELCOME20 at registration to get $20 welcome bonus.

What's Next?

1. Cryptocurrency EA Builder - Welcome to the Money Machine

2. What is a Cryptocurrency Robot and is One Right for You

3. Cryptocurrency PAMM Account - Should You Seek Professional Help?


Categories:  Investing