How to start trading cryptocurrencies?
Cryptocurrency trading involves great risks. Of course, money can be lost in any financial market, but the crypto market is relatively young and therefore less understandable in terms of the basics of technical analysis. A serious danger is the low liquidity of most so-called altcoins.
Illiquid order books can play a cruel joke on traders because even a small amount of money can greatly move the price in one direction or another. This is well proved not only by high volatility of many cryptocurrencies, but also by absolutely no-correlated movement of some of them.
The first thing to do is to get rid of the illusion that trading is easy. It’s easy to push the buttons, but only 2-3% of traders are able to make the right trading decisions. Secondly, you can learn technical analysis and design charts. Third, choose a cryptocurrency exchange to trade on, Stormgain, for instance. You can start with opening a demo account to learn the basic principles of trading, and developing the habit of entering and exiting the market based on specific signals, and not just on intuition. Trading and learning go hand in hand, always study well trading books and strategies, and as a beginner we suggest you to read cryptocurrency trading guide.
It is extremely dangerous to trade cryptocurrencies that were added to an exchange a couple of hours ago. Unfortunately, there is a practice that exchange administrators deliberately inflate the initial value of cryptocurrency at the time of listing (the opening of trading on the added coin). This is done so that the exchange owners themselves could sell coins bought during the ICO (the initial stage of cryptocurrency value formation) at a high price. This leads to the collapse of the rate because the bulk of this cryptocurrency is in the exchange and the people close to the administration, which leads to an imbalance of supply and demand in the market.
Also, the thing that beginner trader should not start trading with is pumps (artificially created situations of exchange rates growth). It is fraught with large losses, as a trader does not always have time to fix losses due to the subsequent sharp fall in price. Smart trader never jumps during the pump, he always waits for a pullback to enter the trade.
It is important to understand that the lowest price of the asset, or as it is also called “the bottom”, is a very elongated concept. History shows that cryptocurrency can easily fall more than 90% of its historic highs, and the trader will see the “bottom” at every stage of the decline. The phrase “about to grow” does not apply to professional traders, it is only for beginners who forget to set protective stop orders.
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