This is how beginners get into trading digital currencies!
More and more private individuals are showing interest in trading digital currencies. The high profit margins, which are theoretically possible, attract beginners. In addition, the trade can be carried out comfortably from the home sofa.
What is trading, can you actually make money with it and what do beginners need to get started in crypto trading? These questions will be answered in the following article.
What is Trading?
Trading refers to trading in currencies, stocks and other financial instruments. An investment is not held here for long. Trading with digital currencies is called crypto trading.
Since the values on the financial markets are constantly changing, a trader can analyze the markets and sometimes record high profits with the sale. However, it is also possible to lose all the invested capital!
With a broker, traders can open a deposit account. Even traders are not allowed to trade. The broker takes over this part for you and charges trading fees in return.
Is it Possible to Make Money with crypto trading?
If the trader sells the currency at the right time, a profit can be made. With crypto trading, money can actually be earned.
However, trading digital currencies is a big challenge for beginners. After all, beginners are not entrusted with the required software, nor do they have experience with the financial markets, prices and currencies. Cryptocurrencies are also subject to constant price fluctuations and are difficult to predict even for experienced crypto traders.
What do I need to trade cryptocurrencies?
We present six points that are important for getting started in trading digital currencies.
Starting capital
To get into trading, beginners need a starting capital. In crypto trading, a small start-up capital is sufficient at first. After all, positions can be opened even with small amounts of money. On the other hand, no capital is necessary for the demo account with virtual credit, the so-called play money.
Broker
If you want to get into crypto trading, you should choose a trading platform where cryptocurrencies can be sold and bought. Well-known trading platforms for cryptocurrencies thus serve as brokers. In addition, the platforms often offer a digital wallet.
Trading platforms should be compared with each other in advance. They differ not only in terms of ease of use, but also in the currencies offered. As a rule, it is always possible to trade with the three leading cryptocurrencies Bitcoin, Ripple and Ethereum. Some exchanges specialize exclusively in Bitcoin.
Many providers, such as the pure crypto trader OKEX, also provide trading training for beginners. Experiences with Okex can be read on the Internet.
The Crypto Wallet
Some platforms do not offer a wallet. Before a user can start trading cryptocurrencies, a wallet must be opened online or offline. A wallet works like a bank account to which coins are posted. A public key serves as the recipient address for the user.
Tools
A trading software includes a chart analysis, also called chart technical analysis or technical analysis. Analysis is considered a popular tool for traders, which helps to predict the course of prices and correctly assess market developments.
Demo account
As a beginner, it is worthwhile to use a demo account and gain initial experience. No real money is used here and the newcomer gets the chance to get acquainted with the market and the software through simulation. Since these are test runs, we are talking about paper trades in this context.
Currency
Beginners can make many mistakes at the beginning and should therefore focus on the most famous cryptocurrencies. Since there are well over 800 different digital currencies, it is also worthwhile to exchange with experienced traders who can report on personal experiences with individual currencies.
Conclusion
Trading is the trading of financial instruments such as cryptocurrencies. With crypto trading, high profits, but also losses can be achieved. Beginners can quickly make mistakes that can mean real money losses. In order to familiarize yourself with the financial markets, a demo account should therefore first be used to gain initial experience with play money. In addition, beginners need a start-up capital, a broker, a wallet and trading software. Furthermore, you should deal with the exchange and the respective coins.
