Cryptocurrency Trading Your Comprehensive Guide to Understanding the Field 2022
Cryptocurrencies are the talk of the hour and every hour, during the past few years we have heard about many people who have become millionaires thanks to them.
Today, trading or investing in cryptocurrencies has become one of the most popular and profitable ways to invest money online , especially in America and some European countries.
Unfortunately, there are not many Arab sources that explain effectively and realistically how to trade digital currencies, which greatly hinders the spread of this method in the Arab world.
This is the reason why we, in Winners, presented a series of articles on cryptocurrency trading to the Arab reader in order to present the field to him in an adequate way.
This article is the cornerstone of this series, which will take you on an interesting journey through the world of cryptocurrency trading in order to get acquainted in detail with all aspects of this process.
After reading this article and other articles on the site about cryptocurrency trading, you will be able to easily start your journey of making money from trading.
What does cryptocurrency trading mean?
Cryptocurrency, eespecially bitcoin is an alternative to the normal currencies that we deal with, such as: the Egyptian pound, the Saudi riyal or the US dollar.
These currencies are based on crypto technology, and in themselves they are not tied to any cover that gives them value such as gold, but they gain their value from supply and demand.
For this reason, it is characterized by the fact that its prices are very volatile, as it is possible, for example, that the price of Bitcoin today will be 64 thousand US dollars, and tomorrow it will be only 40 thousand – that is, it lost 24 thousand dollars of its value overnight – which is what specialists know as volatility, fluctuation or They also call it Volatility in English.
The feature that contributed to creating value for these digital currencies is that they are decentralized, meaning that there is no government, no bank, or even an institution that supervises and audits them.
This gives the user the freedom and privacy to carry out his financial transactions without worrying that someone or someone is monitoring him, in addition to not having to pay exorbitant amounts to banks or financial intermediaries.
Of course, this may be a drawback if this privacy is used incorrectly, and this feature has another downside, which is that there is no protection or compensation of any kind for you when you do anything wrong, or you are exposed to a fraud or the like.
Today there are not exaggerated thousands of digital currencies that are used around the world, but the most famous currencies are Bitcoin and Ether.
There are many ways on the Internet to profit from digital currencies, of course, the most famous of which are mining and investing, and the method that we will talk about today is cryptocurrency trading.
Cryptocurrency trading is a purely profitable process, you don’t need to fall in love with blockchain technology or cryptocurrency for it, you just have to want to make some money.
Trading requires a lot of skills, time and effort, but it can bring you a lot of great profits in a very short time.
Contrary to what some think, trading is not a gamble or a bet, as it is – as you will soon know – based on a lot of observation, study and analysis of market patterns and events taking place around the world.
You are literally doing an effort similar to what stockbrokers do, studying the stocks and picking the most promising ones, and pouring their money into them to multiply.
Cryptocurrency trading is very different from investing, in investing you don’t really care about the current market movement, you look at the long-term value of the currency after many years, but trading is where you buy and sell currencies during short periods of up to a few minutes.
We will only talk about trading here, and in this and in the other articles that we will be publishing, we will teach you how to start profiting from cryptocurrency trading.
But if you want to know more about investing in digital currencies such as Bitcoin, write this to us in the comments, and we will provide articles that explain it.
Should you consider cryptocurrency trading?
Of course you have to keep cryptocurrency trading in mind, and even think about how to start trading right away, this field is one of the most profitable in recent years, and it is expected to remain that way for very many years.
But you have to be careful, although a cryptocurrency trader looks like someone who collects money from the air, this is not true at all.
In order to start making money, you must study and learn some things about trading well, and then you have to spend a lot of time and effort in applying them daily in the exchanges in order to actually make money.
Cryptocurrency trading is a job that will require you a lot of time every day in order to start making profits from it, apart from developing yourself, constantly learning and following the latest news, tools and explanations.
The profit and money used in trading operations varies according to the nature and type of trading, but in any case it is hard work like any other work.
Advantages and disadvantages of cryptocurrency trading
Trading is a good option to profit from the Internet, but like anything it has its advantages and disadvantages :
First, the advantages of cryptocurrency trading
1. High profitability
Trading allows you to earn more money than any other field. With effort and perseverance, you can multiply your capital several times in just a year or 18 months.
If you make the right decision, you may be able to double your money overnight, while 20% profits are fantastic in similar ordinary areas of profit.
I will not deceive you my dear reader, what I am saying about profitability is one hundred percent true, but it needs enough experience and learning before you do this.
2. You don’t need a lot of money to start
You can start trading with whatever amount you have, you are not buying a whole bitcoin, you may be buying parts of a hundred thousand of a single bitcoin.
Of course, the more capital you are speculating with, the greater your profits will be, but this does not deprive you of opportunities to grow and climb the ladder from the beginning, but of course you will need more time.
3. There are a lot of experts and learning resources on the Internet
At this time YouTube is buzzing with hundreds of channels that explain everything small and large about cryptocurrency trading, and there are dozens of experts on Twitter, Reddit and forums that analyze each event and explain to less experienced amateurs and develop them.
With some determination, you can now learn all you want on this subject, become an expert on your own and be able to earn large amounts of money.
Second, the disadvantages of cryptocurrency trading
1. The cryptocurrency market is extremely volatile
As we have said, one of the main features of digital currencies is that they are very volatile – which makes their prices change very quickly overnight, they may increase to two times in an hour, and they may lose 90% of their value in minutes.
This volatility puts a lot of pressure on the traders to go to the extremes to analyze the markets and predict what will happen or else they will lose a lot of their money.
Traders also need to control their nerves and their behavior in order not to lose control and do stupid things and lose all the money.
2. The need for a large capital in order to obtain a large profit
We said in the advantages part that you can start with any amount and you will find your way among the big whales, but you should also note that to achieve large and satisfactory profits you must have a sufficient amount of money.
For example, if your capital was 10 dollars and you traded correctly and your money doubled, you would have 20 dollars, but if your investment was 100 thousand dollars, you would get 200 thousand dollars in a short period that you would not have imagined.
3. There are protection problems, hacking and human errors
Although cryptocurrencies themselves are decentralized and cannot be exposed or manipulated, the human factor is still a very big loophole and weakness.
It is possible that the trading platform you are using is deceiving you, or you may be defrauded by someone taking your coins.
Or even make a mistake when transferring your cryptocurrency to your wallet after trading, and your money will go to someone in India or Russia for good.
We will also provide very important secrets and tips, and we will alert you to potential mistakes so that you do not fall into them, do not worry, the winners protect your back.
The different types of cryptocurrency trading
In this article I try not to go too deep to be like an easy and simple introduction for those who don’t know anything about cryptocurrency trading.
But there are some things that you should know to understand trading more deeply, such as: the difference between Technical Analysis and Fundamental Analysis, because they will deepen your understanding of the types of cryptocurrency trading.
But in order not to get distracted or bored, I will talk in detail about this in another article, so be sure to follow all the articles that we publish in Winners regarding Blockchain and cryptocurrencies.
In any case, there are several types or strategies for trading cryptocurrencies, and each has its pros and cons, and the preferred method varies from one trader to another.
All of these methods are based on one principle, which is to buy cryptocurrencies at the lowest price and sell them at the highest price, or as the famous phrase in the field says: “Buy Low, Sell High.”
The difference in these types and methods of trading lies only in the time periods that are between the buying and selling process, or the way in which these currencies are bought and sold.
The most important and most famous types in the world of digital currency trading are :
1. Day Trading
This method is the most famous in the world of cryptocurrency trading, and many traders prefer it over others, as it allows them to get quick profits.
It is carried out through many buying and selling operations that take place during the hours of the day, so that the trader ends all his transactions at the end of the day.
This method needs you to be vigilant and follow and monitor the statistics and analysis of your trading platform (don’t worry we will teach you this in detail).
Experience is also an important factor in this method of trading because you will have to predict the change in price movement before it happens, so there is a lot of risk involved.
You will buy during the periods of the day when the currencies are at a low price and sell when the prices are high, this will allow you to get quick near-instant gains or, God forbid, quick losses as well.
Scalping is a bit close to day trading, but much faster if it takes place usually within minutes and sometimes seconds.
The goal of quick speculation is to get guaranteed profits with the least possible risk, you will make very little profit, but thanks to the speed of the process, its repetition will allow you to win a good amount of money.
Typically, traders with this method make dozens or even hundreds of quick trades in a single day.
But speculation is also not suitable for amateurs, it needs a very deep understanding of the market and price fluctuations, and this is in order to be able to succeed in obtaining profits.
One of the most important requirements for success in scalping is to be able to focus and make decisions quickly, because you will need to conduct transactions and make decisions within a few minutes.
3. Swing Trading
The third and final type that we will be discussing is swing trading, which is a strategy that tends to be a bit slow in making buying and selling.
Swing trading is based on identifying the beginning of a wave of decline or rise in the price of the digital currency, and then exploiting it to your advantage.
If you can predict that a currency will increase in price, you will buy it before or at the beginning of the wave at a low price, and then you will wait near the end of the price increase wave in order to sell it at the best possible price, and get profits, or vice versa.
This swing trading process can take several weeks or months, so you don’t need to be constantly monitoring analyzes and the like around the clock, which is why some prefer it.
As I concluded, this strategy may be the best and most suitable for beginners who do not have enough experience and knowledge, so you should definitely start with it.
Of course, this is not all types and strategies of cryptocurrency trading, but it is the most important thing that you cannot ignore, the rest of the types we will go through in other articles soon.
Understand the following before you start trading cryptocurrency
Now you may be wondering if cryptocurrency trading is right for you or what? This is a very important question even though the only one who can answer it is you and only you.
By reading about trading and cryptocurrency, you will be able to determine whether trading is right for you or not, but in my personal opinion, it is mainly due to your love of the tasks of monitoring, analysis, buying and selling.
Learning to trade is possible and even very easy, as there are dozens of sources on the Internet in all languages, which will enable you to know everything small and large in the world of trading and cryptocurrencies.
So I say trading is suitable in theory for everyone, the only difference being whether or not a person likes and accepts to do whatever it takes to trade.
As for choosing the right trading method for you, this needs to first know your capabilities and evaluate your experience and capabilities, but it is better no matter how you have listened to explanations and courses to start with swing trading.
Day trading and quick speculation need to be able to read market indicators quickly and proficiently, and the percentage of risk in them is much higher.
But you always have the option to integrate more than one method or method in cryptocurrency trading, as many people in the field do this.
You just have to take into account the risks and risks that you take, they are the only constant in all methods and strategies of trading.
You may now be excited to learn the steps to get started with cryptocurrency trading to make your profits spin, but I don’t want to lengthen this article and I would like to make it as simple and easy as possible.
Therefore, in the following articles, we will talk about how to enter this world, in addition to explaining some other important topics, such as:
- Factors that change the price of digital currencies.
- How to read different currency analyzes.
- How to read market patterns and predict its movement.
- The most important tips that you should know before you trade cryptocurrencies.
- Beginner mistakes that you should not fall into.
- Best and trusted platform for cryptocurrency trading.
And many other important things about cryptocurrencies and their trading, so be sure to follow what we publish on the winners well.
And let’s say briefly now that you have to understand a lot of technical things well before you start trading digital currencies, and this is in order not to lose your money or to be able to win more money.
For example, you will have to know the difference between Technical Analysis and Fundamental Analysis, and which one you should use in order to make the right decisions regarding your buying and selling operations.
Especially technical analysis, which is the most important tool ever in the hands of traders, and fortunately, you can learn about it through an article we previously published
Of course, you will have to know what the market demands are, and their different types; Such as market order, limit order, stop order, and other important types of market orders with different uses.
Fortunately for you, we have written an excellent article that will summarize and make all these complex matters easier for you
How to start trading cryptocurrency
Getting started in cryptocurrency trading is not difficult or complicated, but it requires you to have in-depth knowledge of some things and it may help you to practice a little before you start buying and selling currencies with your money.
As for the practical steps to start trading, they are:
- Learn the basics you need to trade cryptocurrencies.
- Choose the right trading platform for you.
- Create an account for you on this platform.
- Choose the cryptocurrency wallet that you will use to hold your cryptocurrency.
- Follow a strategy and plan for trading your cryptocurrency.
These are the basic steps that you can take to officially become a cryptocurrency trader, and you can learn more
Cryptocurrency trading platforms
Cryptocurrency trading platforms are websites or software that connect sellers with buyers while preserving their rights and protecting them from fraud and deception.
Today there are hundreds of these trading platforms, each with different advantages and disadvantages, so there is no such thing as the best trading platform, at least not absolutely, but there is one that might be the best one for you.
Before choosing the right trading platform for you, you should research it well, read user reviews about its problems and drawbacks, as well as deeply understand its commission system in order to drain your profits.
Cryptocurrency trading is one of the most profitable fields right now, which everyone wants to learn and start making thousands of dollars from.
In this article we have given you a summary of the most important outlines about cryptocurrency trading to decide if this field is right for you or what?
We talked about cryptocurrencies in detail, and explained all the details of them in this article, and we talked frankly and transparently about trading, its disadvantages and advantages, and in the end we talked about the most important types of cryptocurrency trading and the advantages and disadvantages of each type of them.
I hope that you like this article and encourage you to enter this promising field, and I hope that you will share your opinion on the article, and tell us if you want to talk about any other topic related to digital currencies and how to profit from them.
Just write everything on your mind in the comments box below, and we will get back to you as soon as possible