Cryptocurrency trading has become increasingly popular over the last few years. Trading in cryptocurrencies has proved to be a highly lucrative activity for many people.
What are the basics of making money trading crypto?
The first thing you need (apart from some available capital to trade with) is to register for an account with a cryptocurrency exchange.
There are now many exchanges offering services to traders.
You should choose one which is established and reputable and preferably one which accepts deposits in your own national currency to avoid incurring additional currency exchange fees.
You will also need to set up a wallet for the currencies you wish to trade in. At the very least you are almost certainly going to need to set up a Bitcoin wallet as Bitcoin serves as the standard currency for trading in crypto.
There are a number of crypto products now on the market which provide cryptocurrency wallets, but the easiest way for a newcomer to the cryptocurrency world is to register for a free online wallet at a crypto site such as Blockchain.info. They are a long established and reputable service.
You can also install a lightweight software wallet directly on your computer such as Electrum. This does not require you to download the Bitcoin blockchain which is now very large and can take several days. By installing a lightweight wallet or using an online wallet you avoid this drawback.
How do you make money buying and selling cryptocurrency?
Basically, you buy a cryptocurrency at a lower price, then wait until the price of the currency rises and then you sell it at a higher price. And with that, you make a profit.
Of course, if the market price goes against you, then you can lose.
To counter this, you can open a short position. This is where you sell a currency that you don’t actually own, with the intention of buying it back later at a lower price.
There are many different styles of trading. Basically, there is short term and long term trading. Longer term traders hold their trading positions for weeks, months or longer.
Shorter-term trading can also cover different periods ranging from several days to a few hours or less.
In the latter case, this style of trading is often referred to as "day trading". Traders practicing short term trading use very short term time frame price charts such as hourly, quarter-hourly, or even 5 minute time charts.
So is day trading crypto worth it?
Day-trading is often practiced by traders who want to achieve high profit targets within a much shorter time. It can be a stressful activity and you need to have a good knowledge of both fundamentals and especially technical chart analysis in order to be successful.
Obviously the shorter the time period you are going to be trading within the more active you will have to be as a trader and the more time you will need to spend at the trading screen.
One way you can reduce this time overhead is to deploy an automated trading bot that you can program to open and close trades according to your trading criteria.
There are now a number of trading bot services now available. You should use a reputable service which you are comfortable with using and which you find easy to program.
Good luck with your cryptocurrency trading!