Before starting trading in cryptocurrencies, you should choose a cryptocurrency wallet and an exchange. Once you have opened an account with your chosen exchange and funded it, you can start buying and selling cryptos using limit, stop, or market orders.
The next thing is to start trading; you can trade either dollars to cryptos or cryptos to cryptos. There are a few things that you should know before starting trading cryptocurrencies.
Know order types – You should know the difference between a market order and a limit order. Crypto market is highly volatile and can lack liquidity, so you need to be extra cautious while placing big market orders.
Securing the account – You don’t want your account to get hacked and lose everything, so a strong password is very important. For wallet protection, you should write or copy your seed/pin, etc. on a device that is kept offline.
Never trade in margins – If you are a beginner, avoid margin trading as it may multiply your chances of losses.
Learn Technical Analysis
Technical Analysis is a study of statistical price trends that are collected from historical price and volume data to find opportunities for the trade. Technical analysts measure the patterns of price movements and other analytical tools to evaluate and analyze the strength and weaknesses of the asset. There are few terms understanding which you can properly analyze the crypto market trends.
Trends -There are three possibilities of trends – Uptrend, downtrend, and sideways trend.
Resistance and support – Movements in the crypto market are not linear when the price goes up, it will face resistance, and when it goes down, it faces support.
Bollinger Bands – Bollinger Bands displays a graphical band that demonstrates the simple moving average in the middle. The width of the envelop showcases the volatility. A higher volatility means the asset price is going to fluctuate rapidly in the larger range of value. When the price moves away from the average, then it is likely to have a mean reversion.
Moving Average Convergence Diversion – MACD is a trend following indicator that looks at the combination of the two moving averages – Short-term moving average and long-term moving average. Both the averages are combined to find out the current trend and to identify if there is a change in the momentum.
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