How to quickly start trading cryptocurrencies
Having bought your first bitcoins, you can exchange them for other tokens on a cryptocurrency exchange. You may be lucky to make a profit as soon as possible. To start trading cryptocurrencies, you do not need to be an expert, but you need to take the first steps; And many people want to know how to quickly get involved in this business.
In order to start trading, you need to register on the selected exchange and confirm your account. You should know that now most trading platforms require the user to confirm their identity. In addition to the fact that these companies must comply with AML and KYS standards, a verified account will be needed when withdrawing funds (or your future millions!).
If you are a beginner, then you need to study the various exchanges that work with residents of your region and are respected. You can come across reviews of popular exchanges and read reviews of people. Even after verification on the exchange and gaining access to exchange wallets, many traders prefer long-term storage of funds in non-custodian wallets outside the exchange. However, often there is a need to transfer funds to the exchange in order to “cut down” a certain amount of bucks. At the same time, it may be that the storage of funds on an exchange wallet will be most convenient for you. Crypto-veterans, however, like to say:
‘If you do not keep private keys with you, then you do not have cryptocurrency.’
Markets, Wallets and Orders
After verification on the exchange, you can start trading on it, and for this you need initial funds. If you already have popular coins, such as Bitcoin (BTC), bitcoin cash (BCH) or ether (ETH), then you need to deposit them into the exchange wallet. Some exchanges also allow you to buy / sell cryptocurrency for fiat money. You need to learn how to pass two-factor authentication (2FA), which will open you all the options available. Most exchanges have several sections, for example:
- “Wallets” (also “balance”, “deposits”);
- ‘Settings and profile’;
The “markets ” option displays the user on the exchange and shows all crypto and fiat pairs available for trading on the platform.
In the ‘wallets’ section, all wallets available on the exchange are displayed. It is here that you can replenish your account, withdraw funds and store all digital assets supported by this exchange. Here you will also find the addresses of the wallets that you need to indicate when replenishing them, and you can also fill out a form with data if you need to withdraw funds at some point.
In the ‘settings and profile / settings’ section, you can configure two-factor authentication; Provide information about yourself, email and other important data associated with your account. This includes passwords, API keys, user interface settings, an IP whitelist, and more. In this section you will also see if your account has been confirmed, and the limit on withdrawal of funds will also be indicated here. In the ‘orders / orders’ section, users will find their orders – executed and unfulfilled.
Sometimes orders can be partially executed, and this is normal. This happens if you set up an order to buy cryptocurrency at a certain price, and coins at this price are not enough. In these cases, the exchange can execute ¼ or some part of your order, although as coins appear at the price you require, the order can be fully executed. In the ‘orders’ section you will also find your trading history, which took place in your account.
Placing an order on an exchange, whether for a purchase or a sale, is intuitive. If the trader plans to sell 10 ether (ETH) for dollars (USD), then the limit (by default) type of order or conditional order is usually used. A limit order is used for traditional buying and selling, while a conditional order must meet certain conditions. Beginners should choose a traditional limit order to sell their first cryptocurrency. In the “quantity” window, enter “10 ETH” – the amount of coins you want to sell. After that, you need to select the selling price, and there are several options: the user can sell the asset at the current ‘bid / ask price’ – the highest that the market is willing to pay for a coin. There is also a “ask price”, which is the lowest price that the market is willing to pay for cryptocurrency at a certain point. And finally, there is the ‘last price of demand / last price’ – this is the price of the last transaction made by someone. Of course, users can set the price that they want, but usually beginners need to choose between the above three options. (It should also be noted that the appearance of the functionality of various exchanges may differ from each other). After specifying the type of order, quantity and price, the exchange will show you the total value of the transaction, including the commission charged by the exchange for the exchange operation. After the above settings, your next command for the order is “sell ETH”, which will work depending on what selling price you set. If your set price is higher than the demand price, then your order will not work until there is a demand for coins at your price on the market. On some exchanges, there is an option to set the “validity period” for orders, which allows you to set the desired duration of the order or extend it. And of course, you always have the opportunity to cancel this or that order.
The “markets / markets” section should show the trader all the information on orders – current market orders and the history of trading. On the same page, most likely, the main trading chart will be displayed, showing the current rate and dynamics of cryptocurrency prices, as well as a graph of the visualization of the current order book (“exchange glass”). Books of orders and charts configured for different time periods give the trader an idea of the current state of the market, indicating “bearish” / “bullish” moods.
Charts, tools and indicators
The main cryptocurrency charts that show their prices and current trends, as well as some tools for working with charts on the exchange, can help the trader to better predict the short-term and long-term dynamics of the market. After getting to know the exchange and making several simple transactions, you can get acquainted with some technical indicators and tools for working with charts. For example, the Relative Strength Index (RSI) indicates how quickly and widely the price of cryptocurrency changes in the market (how volatile the price is). RSI gives an idea of the ‘oversold’ / ‘overbought’ market. Another indicator “related” to RSI is Stochastic, which measures the current market momentum, and also collects data on support and resistance levels for a particular digital asset. Another “related” to the previous two is the MACD indicator, which consists of two exponential moving average lines, which are also used to track / evaluate market momentum. On the chart, these three technical indicators can often look the same, although each of them has its own path.
All exchanges offer charts, indicators and order lists so that traders can get an idea of current market events.
After exploring the abovementioned market momentum indicators, it’s useful to learn about moving averages such as Exponential Moving Average (EMA) and Simple Moving Average (SMA). They reflect data on a number of time frames, visualizing long-term and short-term trends. Moving averages take into account trading statistics and can be set for any reference points on the chart, which allows you to display the corresponding trend lines. Most traders in their practice track 50-, 100- and 200-day moving averages. Thus, market momentum indicators and trend lines of moving averages represent a whole set of technical analysis tools (although there are Bollinger lines, Arun oscillators, ATR lines and orders for limiting the percentage of losses, fractals, medians and Fibonacci ratios).