What Is Cryptocurrency Trading And 3 Tips To Start Trading Crypto Like A Pro From Day 1
You’ve probably heard a lot about Cryptocurrency Trading lately, but what is Cryptocurrency Trading anway? A lot of people confuse Crypto trading with Crypto investing.
And even if they do decide to trade Crypto, they don’t pick the easiest path or explore all the options to profit from the Crypto market.
- Cryptocurrency Trading is speculating on price movement where you “buy” if you think the cryptocurrency will rise in value or “sell” if you think the price will fall.
- Crypto trading does not obligate you to take ownership of the asset, where Crypto Investing does.
- You can either trade Cryptocurrency at Crypto Exchanges or Forex brokers.
- Tips for successful Crypto trading include trading crypto at a Forex broker, trading Forex for Bitcoin and following an already successful Cryptocurrency trader.
The Cryptocurrency market is an exciting trading opportunity with high profit potential… if you approach trading Crypto the right way. Keep reading to learn 3 tips to start Crypto trading like a pro from day 1.
What Is Cryptocurrency Trading And How It Differs From Cryptocurrency Investing
A lot of times, when people talk about Cryptocurrency trading, they are really talking about Cryptocurrency investing, or vice versa. So, the first thing you should know is the difference between Cryptocurrency Trading and Cryptocurrency Investing.
Cryptocurrency trading is when you speculate on the price movement of one currency compared to another. Since we are “trading” cryptocurrency, you have to have 2 currencies to trade between. This could be a crypto vs fiat currency pair like BTCUSD (Bitcoin vs US dollar) or a crypto vs crypto currency pair like ETHBTC (Ethereum vs Bitcoin).
- For example, if you think the price of Bitcoin is going to rise compared to the US dollar, you would “buy” the BTCUSD currency pair with the goal of selling at a higher price.
- On the other hand, if you think the price of Bitcoin is going to fall compared to the US dollar, you would “sell” the BTCUSD currency pair with the goal of buying at a lower price.
If you perform these trading activities successfully, you will generate a profit.
However, with Cryptocurrency Investing you are actually BUYING the underlying currency. For example, you could buy Bitcoin with your US dollars. The goal would be to hold the actual Bitcoin you purchased in a Cryptocurrency Wallet and sell it back for US dollars at a higher price at a later date.
Since people see this as “trading” dollars for Crypto, many people think of this as Cryptocurrency Trading. But I prefer to look at this as Crypto Investing since you are actually investing in the Cryptocurrency by purchasing the asset and storing it.
2 Main Places To Trade Cryptocurrency
Cryptocurrency trading can occur at two main places:
- Forex Brokers (that allow Crypto trading)
- Cryptocurrency Exchanges
Let’s go over both, and which one I think provides a true “trading” environment…
Many Forex Brokers now allow you to trade Crypto. This is an excellent opportunity for Forex traders, like myself, to be able to trade Cryptocurrency pairs using the trading platform and trading strategies they are accustomed to.
For example, I trade the BTCUSD and ETHUSD currency pairs at a Forex Broker using the popular (and free) Metatrader4 platform.
The “trading” happens at a broker. Therefore, it is not necessary to actually buy the underlying currency. You don’t need to buy any actual Cryptocurrency at all to trade the Crypto Market for profit.
I view this as “trading”, just like I consider trading the GBPJPY currency pair. I’m performing my trading activities at a Forex broker to speculate on price movement… but I am not actually taking ownership of the underlying currency. (I’m not buying physical Great British Pounds or Japanese Yen).
You can also “trade” Cryptocurrencies at Cryptocurrency Exchanges. However, you are limited to trading crypto vs crypto currency pairs, like ETHBTC (Ethereum vs Bitcoin).
As the name of the service suggests, I view this more as EXCHANGING rather than trading.
Because you actually have to take ownership of the asset.
In order to trade the ETHBTC you first must purchase some Ethereum or Bitcoin. Then based on the charting platform the Crypto Exchange provides, you can make decisions on when to speculate on price movement and “exchange” one Cryptocurrency for another with the goal of generating profits.
But since you are buying the underlying asset (the cryptocurrency coins in this case), this seems like it should be called “exchanging” rather than “trading”.
For this reason, I believe the best Cryptocurrency TRADING environment is at Forex Brokers.
Tip 1: Trade Crypto – Fiat Currency Pairs
At A Forex Broker
In order to be profitable in Cryptocurrency Trading, you need to know when to “buy” and when to “sell” the currency pair you are trading. So, how are you going to make these trading decisions?
I am a TECHNICAL Forex trader. This means I make my trading decisions based ONLY on the charts. And for this I’ve developed trading strategies over the years to put the odds in my favor.
My strategies are the combination of rules for entries, money management and trade management. And the indicators I use are designed for the Metatrader4 platform. Therefore, in order to use my strategies on the BTCUSD and ETHUSD currency pairs, I need to trade at a Forex broker that offers the MT4 platform.
This is my pick for trading Cryptocurrency like the BTCUSD and ETHUSD currency pairs and the broker I use for Bitcoin Signals Blast Off. Excellent trading conditions and 24/7 trading is the best environment for profiting from the Crypto market.
This is my pick for trading Cryptocurrency like the BTCUSD and ETHUSD currency pairs and the broker I use for Bitcoin Signals Blast Off.
Excellent trading conditions and 24/7 trading is the best environment for profiting from the Crypto market.
So, not only is trading at a Forex broker more purely Cryptocurrency Trading because you don’t have to buy the asset… but I can use the trading platform and strategies I am accustomed to using.
You can actually copy what I do here: Put Money To Work
Tip 2: Trade Forex For Bitcoin
One of the often overlooked opportunities in Cryptocurrency Trading is the ability to grow your Bitcoin holdings through Forex trading.
Some Forex Brokers are now allowing clients to fund their accounts with Bitcoin. This means, your profit and loss will be in Bitcoin (instead of a fiat currency like US dollar or Euro). This means you can grow your Bitcoin holdings by trading Forex.
The great thing about this approach is you can buy a small amount of Bitcoin and grow it over time. That way, if Bitcoin’s price continues to rise… you’ll have more of it.
I personally trade the GBPJPY currency pair on a Bitcoin funded account. The irony of trading a fiat currency pair to grow my Bitcoin holdings amuses me. And I actually teach this approach here:
Tip 3: Follow The Lead Of An Already Successful Cryptocurrency Trader
The thought of Cryptocurrency Trading on your own can be daunting. Yes, if you are just starting out, and want to figure everything out for yourself, there is a lot to learn.
But you could simply take a shortcut.
Instead of trying to make all the trading decisions and face the Cryptocurrency Market alone… you could just follow what an already successful Crypto trader (me) is doing.
In my opinion, this is the fastest, simplest and least time consuming way to get involved in Cryptocurrency Trading.
Cryptocurrency Trading has quickly become the wealth accumulation activity I do with the most profit potential. But it can be confusing to wrap your head around in the beginning.
You now should know what Cryptocurrency trading is, and have insights on the best way to move forward.
To Your Wealth,