Short Tip: Start trading crypto

By foski97 | Quick Tips | 5 Oct 2023

Hey there!

Today's topic is how to start trading crypto. Suppose you already have some crypto. What can you do with it? Well, you can trade them or hold them. Let's find out how you can do the first one.

Find the platform to trade

Usually, to trade, you will have to choose the platform you want to trade with. This does feel easy, but it's actually the more difficult part. You need to have these things into account:

Available in your country: First, make sure the platform is available in your country. US-based traders can use only domestically regulated crypto-trading platforms. Make sure you CAN use it.
It supports the crypto you want to trade: If you are trading main coins, this shouldn't be a problem. The problem comes when you have any altcoin (Like XMR, which is banned from a lot of platforms). Not every platform supports every coin.
Fees: You will find fees. Assume it. But be aware of how they work. If you are planning to trade large amounts of crypto, fixed-amount fees may favor you. If you plan to trade small amounts, percentage fees will be better for you.
Liquidity: Every platform should inform users about the liquidity present in each trading pair (for example, BTC/USDT). It should show the liquidity of both coins. The higher the liquidity, the more difficult it is to change the price of the pair (so you benefit from more stable conversions).
Possibility to recover your funds: The platform should provide a method to recover your investment. It may be via crypto transfers, bank transfers, visa transfers, etc.

A good place to look for this information is CoinMarketCap.

Plan your trading

You can refer to some other posts in this series like Manage risk, trust and fear or Care with the FOMO.

Basically, make a plan and stick to it. Establish limits (on wins and losses) and really follow them. And for this, there are some tools your platform will have:

Take Profit: If you set the TP limit, the trade will be closed when the pair reaches that limit. For example. Imagine you make a trade between USDT and BTC. You bought 1 BTC for $26k. You set the TP at $28k. Congratulations! You have won $2k. It may seem silly to set a limit on your profit, but the following scenario may happen: BTC goes to $28k and then suddenly drops to $20k. Then you not only lost the opportunity to win $2k, but now your trade is losing $6k.
Stop Loss: This is like the opposite of TP. SL means the trade is closed when the pair drops to the amount you have set. Imagine the same scenario, you buy for $26k, but you can only accept a loss of $2k. Then you set your SL to $24k. This may prevent your trade from losing more money than you can risk losing.

These terms are usually used in day-trading. You can refuse to day-trade because you want to hold the assets you have traded. OK, you can do that. But both limits may be useful in the case of a sudden drop or a fast bull run.

Conclusion

If you want to trade crypto, be aware of the risk and informed of every aspect of the platform you use. The first option you find may not be the most suitable for you. The platform your friends are using may not be adequate for you.

Trading is like a strategy game. You may plan a strategy that goes well in certain scenarios but very badly in others. Take that strategy and slowly make it better. You will learn patterns, limits and technical indicators that will make you a better trader.

I hope this helped, and see you next time!

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