More and more people want to learn to trade virtual currencies , which is why we set up this guide to discover the basics of day trading cryptocurrencies. Today, Bitcoin has been joined by different new currencies such as Ethereum , Litecoin and thousands of other more or less popular ones.
You have to differentiate between:
- The investment that allows to make gains over several months or even years by carrying out some operations per week.
- The pure trading that can make profits through buying and cryptocurrency resale in a short period of time (minutes to hours).
If the first option interests you, we refer you to our guide to invest in cryptocurrency , if not continue reading this article. If you do not have Bitcoin (Claim BTCL Electrum), please refer to our guide first to buy Bitcoin. Now let’s get to the heart of the matter, this is to understand and succeed day training operations , understand the daily exchange of cryptocurrencies (sale and purchase at the right time to achieve added value)
For that, you will have to use the method used in the trading of other more traditional stock assets namely:
The technical analysis (AT) allows you to anticipate the rise and fall of the cryptos thanks to indicators to perceive a tendency and thus bet at the right moment. However, it is not an exact science. It is imperative to use several different indicators and the information collected next to make the right choice. The technical analysis is considered particularly suited to the crypto-currencies. Indeed, the market is new and held by a lot of different actors (individuals like you). Sales are daily and prices move much unlike more traditional sectors.
With technical analysis, we also speak of self – fulfilling prophecy. Case more speaking, the AT reveals that the course of Bitcoin (Claim BTCL Electrum) will fall. The traders who take it into account will therefore sell their BTC, which will actually cause a first fall that will lead to that provided by the analysis. It is very important to set goals and limits :
The target is the goal you are aiming for with a crypto, understand when you are going to decide to sell it to make a profit. The stop loss is a limit, if the price of a crypto is lowered too low, we sell. Too bad, it is better to limit the breakage. These 2 notions are extremely important to consider and respect. Without that, you can be carried away by your emotions and lose a lot more.
9 points to respect before starting:
1) Know and understand the market: You can not get into trading if you discovered Bitcoin yesterday, take the time to understand how the market and the crypto-currency ecosystem work.
2) Never invest more than you can afford to lose: We can not say it enough, it’s a speculative market that moves a lot, we must not put all our eggs in the same basket and never invest a sum that we can not afford to lose.
3) Follow the news: Keep up to date with what’s happening, the virtual currency market is still young and volatile. The slightest news can change the course a lot. We relay daily on Cryptonaut, but you must also follow other sources to complete our information.
4) Choose your trading platform: There are many sites and applications that offer to trade cryptocurrencies. If you have never bought Bitcoin, we recommend the popular eToro platform especially for beginners because it is easy to use and you can also easily inspire other traders to train you. If you already have bitcoins and want to exchange them for other crypto-currencies, you can turn to our tutorial to use the Binance platform.
5) Master the technical analysis: We talked about it earlier. Perhaps the most time consuming at the beginning but it is important to know the fundamentals of this method and know how to use it.
6) Use social trading sites: Useful to start and to be inspired by other traders, our favorite is TradingView , it is in French and is really very active.
7) Secure your crypto: When doing this activity, we often have a small nest egg that must be protected by a hardware wallet, check our dedicated guide if you do not have one yet.
8) Speak English: Many services and sites are in English. It is therefore important to understand English to have access to as much information and platforms as possible. Otherwise Google Translate does a great job nowadays and will be able to troubleshoot.
9) Taxation: Learn about taxation according to one’s place of life. For example, in France the gains from the exchange of cryptocurrency are taxable.