How can a beginner make money on cryptocurrency?
Cryptocurrency and its rate have been actively discussed for over 5 years. Someone shares their successful profit, someone has not started trading. If you nevertheless decided on this, then you need to understand what cryptocurrencies and the cryptocurrency market are, what strategies you need to use, and what you need to focus on. We collect the best materials so that you can quickly understand how a beginner to make money on cryptocurrency in 2021.
There are many amazing stories on the internet about how people make huge money by trading digital assets. This way of making money is much easier and faster to make money than investing or mining. But significant financial risks are accompanied by large profit percentages. You need to understand this issue well due to avoid losing your own money.
Why do you need to learn everything about crypto trading?
There is a huge amount of information on the Internet. Such a volume confuses not only a beginner but also an experienced trader. There are many reviews on strategies, tools, and indicators. Positive arguments are made for persuasiveness, and you may think that you have found a super strategy and will make money. But in the end, the gullible user loses their money.
Strategies are not given for free: you have to buy a trading bot, follow affiliate links, etc. But there is no guarantee that it will work. We have prepared a lot of materials so that you can develop your trading strategies. You will need more time, but there is a possibility of finding the perfect way to earn money that does not require attention 24/7. You don't have to search all over the Internet for information to find answers to questions. We search for everything ourselves, write in simple words, share the results of our research.
How can a beginner make money on cryptocurrency?
Here you will find many nuances necessary for successful earnings. In this article, we will introduce you to the basic concepts.
Choosing an exchange
How successfully you can trade depends on this. Focus on several factors when choosing:
- Trading volume per day. It shows how actively transactions are carried out on the exchange. The larger the volume, the more attractive the platform for traders.
- Choice of crypto pairs*.* It shows you which digital assets you can work with on the exchange. The more assets the better. This will allow you to quickly switch from one cryptocurrency to another playing on rate changes.
- How long does the exchange work*,* this shows the stability of the crypto exchange. Age must be over 3 years old. This speaks of customer confidence and the absence of shortcomings in the functionality.
- Deposit and withdrawal methods. You should have several methods that are convenient for you. The more the exchange offers them, the more comfortable it's for you to work with it.
- Commission size. These are the amounts that the exchange charges for conducting transactions on its platform. Ideally, the platform provides the ability to reduce the size of transactions over time. A prime example: Binance. There, you can reduce your commission by 50% using their BNB token.
- Analytical tools are also important. They allow you to use a variety of cryptocurrency trading strategies. You need to carefully study them before the beginner starts making money on cryptocurrency: find out the advantages and disadvantages, when it is better to use, etc.
Understanding the interface
It's not difficult to register on the exchange and replenish the account, but the working interface may cause you a lot of questions. Let's see what works and how. Most platforms provide the following functionality:
- List of tokens. Here are the coins that can be used in trades.
- Cryptocurrency rate chart. It shows the change in the value of the cryptocurrency in real-time. Timeframes can be switched depending on the desired frequency: 5 minutes, 1 hour, 1 day, 1 week, 1 month, 1 year, the entire period. There are additional indicators for analysis here.
- Depth of orders. It displays the total number of active offers to buy or sell digital coins. If there are many orders, then not all of them will be displayed.
- Trade history. It shows the last closed orders for the selected cryptocurrency.
- Order opening field. It allows you to open your positions at the price you want.
Sometimes exchanges provide leverage for trading. This tool is very risky. Be careful.
First of all, learn to analyze the market. Examine the behavior of the price change chart to determine the direction of the spread. And you will understand whether to buy a digital asset, wait or sell.
Get to know the major players in the market, find independent sources of information, analyze the data obtained. At first, you may get confused, but over time, you will learn to quickly highlight the main thing and use it in your strategies. It's much easier to do this with us. We are engaged in analytics and use various metrics to analyze the work of successful traders.
Instructions for beginners: how to make money on cryptocurrencies?
Not only strategy determines the success of making money on cryptocurrencies, but also the behavior of the trader himself. Use the tips below to trade profitably:
- Don't panic. The volatility of cryptocurrencies is huge: often, price jumps of 5-10% per day occur. Think carefully about your actions.
- Don't trade a strong fall or a rapid rise in prices. High chance of a market reversal in the opposite direction. Exception: you are confident that the spread will go in the direction you want.
- Set a limit and don't spare it. Don't use amounts that can hit your pocket. But don't regret the funds deposited if you are confident in the profitability of the transaction. They often turn out to be successful, and the savings will minimize your profits.
- Work with multiple digital assets at the same time. Don't use just one cryptocurrency: it can drop dramatically in price and never rise. Keep at least 5 tokens in equal amounts: if one coin falls in value, you have a chance that the second coin will rise in value.
- Check the trading volume before entering the market. If it's not large, then it will be difficult for you to get out of it due to the lack of demand.
We recommend that you study all the articles, as the material is presented in different ways, ensuring the completeness of the picture. So you can understand the essence of cryptocurrency trading in a minimum amount of time.