How to Trade Cryptocurrency: Trading Guide for Beginners

Despite the closure of some cryptocurrency exchanges and the protracted decline in the value of digital assets, crypto trading is still popular. There are new players who want to start trading cryptocurrency and make money on it.

In this article, we will look at the structure of the virtual currency market, its operation and price formation, as well as the main trading platforms. You will learn how to trade cryptocurrencies and what to take into account when analyzing crypto markets, and get investment tips and efficient earning schemes.

The article covers the following subjects:

What is Cryptocurrency Trading

Let’s look at what crypto trading is and how it is different from other types of trading.

At its core, trading on the cryptocurrency market is very similar to working with CFDs, stocks or currency pairs. The main difference is that cryptocurrencies are used as the trading instrument.

The essence of crypto trading is buying digital currency and then selling it at a higher price. So a crypto trader’s job is quite similar to that of their colleagues on the currency or stock market.

Crypto markets are often analyzed with the same technical analysis methods as the fiat currency markets. Many traders prefer to trade bitcoin based on trading volume and indicators and often use modified classic trading strategies.

However, from the point of view of fundamental analysis, the cryptocurrency market can present a few challenges. Digital assets can fluctuate dramatically due to various events: deviation from the project development plan, forks, an increase or decrease in exchange trading fees, a sharp change in the popularity of the coin among miners, etc.

At the same time, cryptocurrency quotes are highly dependent on the dynamics of the price of bitcoin. This digital asset occupies a large part of the market: about 50% of all transactions are carried out with bitcoin. Therefore, BTC is the underlying market that sets the trend for the entire industry.

Cryptocurrency markets structure

Like trading on the foreign exchange or stock market, crypto trading is a zero-sum game. Participants who want to buy and sell crypto are connected within the same particular exchange. The platform on which the trades take place charges a commission for the exchange of cryptocurrencies as part of the transaction.

WIthin a single transaction, one of the participants makes a profit, and the other incurs losses. The value of a digital asset is constantly changing. Therefore, if you sell a cryptocurrency during its growth, you will lose and the buyer will profit. And vice versa: by selling bitcoin during a price decrease, the seller will get a profit, and the buyer will incur losses.

As on Forex or when trading stock CFDs, exchange participants try to sell cryptocurrencies at a higher price and buy at a lower price. The exchange collects all orders from crypto traders in the order book. If the parameters of two separate orders are the same, the crypto exchange makes a transaction. If there are no offers for the order, the platform offers to buy at the current price.

What is blockchain?

Now that you know what crypto trading is, it’s time to take a deeper look at how digital currencies and the cryptocurrency market work.

Each cryptocurrency is built based on blockchain – a continuous chain of digital blocks containing information. A copy of the chain is stored in each node – a separate computer. The chain is built according to the rules laid down by the developers. The connection between blocks is formed both by their sequential numbering and by recording in each block of its own hash sum and the hash sum of its predecessor. To change the information in the network, you need to edit the following blocks in each node. In theory, such edits are impossible with a large number of nodes from validators – independent participants in the blockchain responsible for verifying transactions.

The first technologies of distributed computing and decentralized information storage appeared in the 90s. However, blockchain was first used by Satoshi Nakamoto in the Bitcoin network to create a new generation financial system. The diagram below clearly shows the difference between a decentralized blockchain network and a centralized data storage system.

What is cryptocurrency mining?

Mining is the process of extracting bitcoin and other virtual currencies. It involves solving cryptographic problems. As a result of successful calculations, a new block of transactions is added to the blockchain, initiating the release of a certain amount of cryptocurrency.

The constancy of the price of assets on the cryptocurrency market is supported not only by the willingness of participants to buy and sell coins. The rate of crypto assets also depends on the need to spend considerable real money and mining resources (purchase and maintenance of computing equipment, search and rental of premises, power costs).

However, during the period of market growth, all costs are offset by the profits from cryptocurrency trading. Therefore, both novice investors and large companies are engaged in mining.

Market size and liquidity

It is important for investors to buy and sell digital currencies at any time and in any volume. Otherwise, what is the point of profit if it cannot be converted into real resources? Therefore, when choosing a virtual currency, active traders pay attention to the market volume and liquidity of the instrument.

If we take the total volume of the cryptocurrency market, it is rather small compared to Forex, CFDs, or shares. Bitcoin at its peak reached a capitalization of $1.3 trillion. And the entire cryptocurrency market was estimated at $3 trillion at its peak. For comparison, on the stock market, the capitalization of the New York Stock Exchange alone is more than $23 trillion.

At the same time, the markets of popular cryptocurrencies are liquid enough so that users can buy and sell an unlimited number of coins.

The chart above shows spot trading volumes on the best crypto exchanges in the world according to THE BLOCK.

What moves cryptocurrency markets?

Supply and demand affect spot trading and the value of cryptocurrencies more than, for example, the stock market. This explains why the cryptocurrency market is very volatile.

However, crypto is an instrument of decentralized finance. It is not affected by political and economic processes, or the state of the economy of a particular country or region, unlike traditional markets which are highly dependent on the above factors.

Other factors affecting the crypto market:

• market capitalization;

• cryptocurrency trading on global crypto exchanges, integration into trading platforms and e-commerce systems;

• sentiments of large companies, media and experienced crypto traders towards the coin;

• news events that form a vulnerability or risk tolerance.

Is cryptocurrency a good investment?

Investing in cryptocurrency is still a promising direction. Crypto traders can pursue various investment objectives. For example, trading in a new active market or risk diversification by increasing the number of markets with weak correlation. Another option is to trade stocks of companies like Coinbase, Block, and PayPal. You can also invest in one of the major crypto exchanges that facilitate trading in cryptocurrency futures.

One of the advantages of crypto markets is that in many countries cryptocurrency trading is not taxed. One should keep in mind however that crypto exchanges charge trading fees, similar to brokerage fees when trading futures, currency pairs and other instruments.

Now let’s figure out how novice investors can invest in cryptocurrency, where to buy and sell coins, and what tools can increase your earnings.

Who is Investing in Cryptocurrency

Do you know how many people invest in cryptocurrency? Almost every owner of a trading account with a brokerage company has tried cryptocurrency trading at least once.

Permanent participants of crypto exchanges are referred to as crypto traders. They can trade one cryptocurrency or pairs: bitcoin to ethereum or bitcoin to ripple. Some investors only work with altcoins – any cryptocurrencies except BTC. Many traders choose to trade on crypto exchanges in pairs consisting of a cryptocurrency and one of the fiat currencies, for example, BTCMXN – bitcoin to Mexican peso.

Another important question: how old does one need to be to trade cryptocurrencies? It all depends on the country you live in since most cryptocurrency exchanges follow national laws. In some countries, for example, you can trade on a crypto exchange from the age of 14 if you have the written consent of your parents. You can also find bitcoin ATMs and buy crypto at any age making payments by debit card or in cash. However, there aren’t many such ATMs.

What is Traded in Crypto Market

Before you start trading cryptocurrencies, choose the tools and platforms that you will use in your trading. Traders usually choose cryptocurrency exchanges.

If you pass verification on a centralized exchange, you can simultaneously use crypto wallets and bank accounts.

Another option is to trade CFDs and derivatives with a broker. CFDs are suitable for traders who prefer short-term trading strategies. This type of crypto trading is interesting because you can make a profit from a decrease in the value of the asset.

Crypto trading pairs

Cryptocurrency pairs are the basic instruments for crypto trading. Beginners are advised to use trading pairs with bitcoin and one of the fiat currencies at first.

Advanced traders can choose to trade on crypto exchanges in pairs consisting of a highly liquid cryptocurrency (for example, Bitcoin or Ethereum) and one of the altcoins. Ripple, Dash, Monero, Bitcoin Cash and other digital assets, except for BTC, are considered leading altcoins. In pursuit of high volatility, experienced traders are starting to use only altcoins for trading on the crypto market.

You can also buy and sell cryptocurrencies through a broker. Trading on an exchange is basically exchanging one cryptocurrency for another with higher trading fees. Trading on the crypto market through a broker allows you to save on commissions. The process of trading cryptocurrency pairs on the platform is as straightforward as sending an order to sell or buy.

Trading on cryptocurrency exchanges and with brokers carries a high risk. Therefore, it is necessary to do an in-depth technical analysis of each virtual currency separately.

Cryptocurrency derivatives

Cryptocurrency derivatives allow you to make transactions on the market without owning coins. Derivatives include bitcoin futures, swaps, and options. They give you more flexibility than classic trading. You can use dozens of trading strategies to earn money, and margin trading with a large leverage allows you to significantly increase the number of coins in just a few trades.

But such trading is always a high risk if the trader does not follow risk management and money management rules. Margin trading with a large leverage can surprise you with quick profits, but even a small number of losing trades in such conditions can quickly empty your deposit. Therefore, only active traders choose derivatives trading.

Cryptocurrency CFDs

Cryptocurrency CFD trading involves betting on how the value of a crypto asset will change in the future. CFD is considered a derivative, therefore it has both the advantages and disadvantages of these instruments.

On the LiteFinance online platform, you can start trading dozens of different cryptocurrencies and CFDs with flexible leverage. This allows you to make purchases safer, balancing the level of risk and potential profit. Novice traders should choose the lowest leverage to trade crypto CFDs: this way you will limit the amount of profit, but also reduce the risks of possible losses. Active traders can choose margin trading with a large leverage to get a large profit from each successful trade.

How to Trade Cryptocurrency for Beginners

Beginning traders often ask how to start trading cryptocurrencies, CFDs or crypto options. I would strongly advise them not to rush it.

Before investing in cryptocurrency, a novice trader should:

• learn to analyze price charts and trading volumes;

• learn to analyze past performance and identify patterns in the history of quotes;

• learn how to enter into buy and sell trades and monitor price changes;

• find profitable trading strategies.

Basics of Cryptocurrency Trading

To start trading cryptocurrency, you need to follow a few steps:

• sign up with one of the cryptocurrency exchanges. Beginning traders are advised to choose well-known trading platforms with transparent trading conditions and lower trading fees. An alternative way is to register with a broker, such as LiteFinance, which provides access to cryptocurrency derivatives.

• Deposit funds to your exchange account with a credit or debit card, bank transfer or any other method. This should be an amount you don’t mind losing.

• Choose a cryptocurrency and start trading.

Quotes of digital currencies are always in motion, this is one of the distinguishing features of the market. On the one hand, there are a lot of opportunities for earning, on the other, additional risks. Therefore, beginners need to understand the principles of exchanges and the market, learn the basics of cryptocurrency trading and margin trading. And only then start trading.

What is a Pip in Cryptocurrency Trading

A pip is the smallest movement in the price of a cryptocurrency. The name itself is an abbreviation of the phrase “percentage in point.” Even a novice crypto trader can determine the value of a pip: just look at the last decimal digit in the quotes.

What is a Lot in Cryptocurrency Trading

Brokers trade in lots – batches of cryptocurrency tokens. Crypto trading pros know that digital currencies are very volatile, so they recommend starting trading in small volumes.

What is Spread in cryptocurrency trading

Spread in trading is the difference between the bid price (Bid) and the ask price (Ask). If you take an asset on the exchange at a market price, you will buy it at the current Ask price, and if you sell it, then at the Bid price. The spread is often perceived in trading as the trading fees of a crypto exchange or a broker.

What is Spread in Cryptocurrency Trading

Crypto trading with leverage is a way to increase earnings by increasing the trade volume without spending your own funds. Leverage is a service of borrowing funds from your broker to open a trade. The broker charges trading fees for it. With LiteFinance, crypto trading is available with a leverage of 1:1,000, i.e. the borrowed amount will be equal to 1,000 times the deposit amount.

What is Margin in Cryptocurrency Trading

Crypto margin trading is trading with leverage. The term margin means the part of the deposit that the user deposited by bank transfer to the account of the trading platform and uses as collateral to secure the leverage.

Margin is usually displayed as a percentage of the trade volume. For example, if 1,000 tokens are involved in the opening of a position, with a margin of 10%, the trader will deposit only 100 tokens. Knowing the size of the margin, the trader can calculate the broker’s trading fees.

Learn How to Place Trades and Read Charts

Before you start trading crypto pairs or CFDs, you need to learn patterns for crypto trading and know how to analyze charts using indicators and follow news.

This is the LiteFinance trading platform. The best crypto exchanges offer more or less the same tools for buying and selling cryptocurrency and analyzing charts.

Market research methods in crypto trading:

Fundamental analysis involves price forecasting based on the news and financial performance of a cryptocurrency. Analysis of market sentiment allows you to find out how market participants feel about a particular asset – whether the price is expected to rise or fall. Traders monitor market demand on trading floors and take notice of promising trends.

Technical analysis involves the study of market charts based on historical data and trading volumes. Traders identify chart patterns and analyze indicator values.

Study Psychology of Trading

Trading psychology is important no matter where you trade: on cryptocurrency exchanges, Forex, or the stock market. All exchange users are subject to emotional behavior.

Traders buy and sell under the influence of both logical and emotional factors: hopes for the growth of quotes, news, fear of losses, desire for success, etc.

One example of emotional trading is the so-called “locked-in traders”. Trying to avoid losses, they do not close their positions when signs of a reversal appear. And then they keep hoping that the price will still start moving in the right direction. As a result, they exit with a big loss when all hopes collapse.

The most important component in trading is controlling your emotions. You can achieve stable profits only with consistent analysis and a cool head.

In the LiteFinance online platform, you can use the best crypto trading indicators for free!

Choose Your Crypto Exchange

There are a lot of trading platforms with unique features. There are centralized exchanges and decentralized exchanges with an internal trading account. Some exchanges charge high trading fees. On some platforms, you can even trade cryptocurrencies on a demo account with virtual funds without risk.

It is quite impossible to describe the nuances of well-known crypto exchanges in a single review, so I will highlight the main features of platforms:

• Custodial exchanges have an internal exchange account, while non-custodial exchanges do not store clients’ assets.

• Support of fiat money. You can buy cryptocurrency for fiat money on any cryptocurrency exchange. Some exchanges also support crypto trading with fiat money, and allow you to pay trading fees with fiat money.

• Access to spot (classic) trading, futures (with or without expiration), CFDs, margin trading, options, indices.

• Regulation by government agencies, taxes and other non-trading fees.

• Does the crypto exchange require user verification and KYC?

• Support of English, French, Russian and other languages.

• Trading fees – what they are charged for, how much, payment methods.

Explore the benefits of different platforms and choose the best crypto exchange for you.

In addition to well-known crypto assets, LiteFinance allows you to trade other types of instruments: currency pairs, stocks, precious metals, stock indices. Other the advantages of the platform include low trading fees and a large leverage of 1:1000. For beginners, LiteFinance offers to open a demo account for free and without trading fees: you can practice trading skills or try out trading strategies without the risk of losing your funds.

Make a Crypto Trading Plan

In order to get a stable income from your trading on cryptocurrency exchanges, you need to develop a trading plan. It must contain at least two items:

The simplest example of a trading plan is to sell a certain amount of bitcoin if the price rises by $1,000. And if quotes fall to $30,000, then you sell all the accumulated coins.

Also, your trading method may include market entry points. For example, you open a trade when the price rises to a certain level or reverses with a simultaneous increase in trading volumes.

Over time, your trading plan will become more complex and at some stage will turn into a crypto trading strategy. Professional traders go one step further by using bots to trade cryptocurrencies. This allows you to save time and find new trading opportunities.

Basic Crypto Trading Strategies

You don’t have to develop your own cryptocurrency trading strategy, especially if you are just learning crypto trading. There are many methods based on fundamental and technical analysis that can be employed immediately.

The classic cryptocurrency trading strategy is a comprehensive trading plan, which spells out the rules for entering the market, limiting the trade size, reacting to price movements (stop loss, take profit, trailing stop), as well as methods and conditions for closing positions.

Below I will talk about working crypto trading strategies for different trading styles. For example, an intraday trading strategy aims to make quick profits. The strategy using leverage is aimed at a multiple increase in earnings. We will also consider an automated strategy that will allow you to automatically open and close trades.

Day trading crypto

This is a basic trading strategy for active crypto trading. On crypto exchanges, where quotes change around the clock, the concept of day trading is very arbitrary. In this case, intraday trading just means opening short-term trades.

Cryptocurrency day trading rules:

• trades are opened and closed within one trading day;

• constant monitoring of prices, market signals and risk assessment;

• setting minimum stop losses to reduce potential losses. Trading goals are limited and easily achieved.

The best cryptocurrencies for day trading are Bitcoin and Ethereum as these assets have the largest trading volumes. For intraday trading, it is better to choose a crypto exchange with a low trading fee for opening positions, as you will have to open many trades.

Scalping crypto

This is probably the fastest trading strategy. It involves making a profit from high-frequency algorithmic trading.

Scalpers execute trades within minutes or even seconds. They open dozens and even hundreds of positions in a day, so crypto trading bots are often used in trading. For scalpers, it is important that the cryptocurrency exchange has a low trading fee for opening trades, otherwise a significant part of the income would be wasted on crypto exchange fees.

Leverage trading crypto

We already know what leverage is in cryptocurrency trading and how it helps to increase your earnings. Now let’s talk about trading itself.

Leverage multiplies the potential profit, but the possible losses also increase. Therefore, a leveraged strategy involves careful risk management.

Main rules of margin trading:

• Multiple confirmation of signals – to open a position, you should use at least two signals confirming each other.

• Minimizing losses by setting stop loss orders close to the entry point and trailing stop orders with a minimum step.

• Short-term open positions. With leverage, you trade on borrowed funds and must pay interest on the loan daily. An open position with a large leverage can potentially become unprofitable even if the price moves according to the forecast. The exchange charges a percentage for leverage from the amount of margin, which increases the risk of the position closing by stop-out.

Novice traders should start trading with a small leverage – this way the risks of losing funds are lower. Then you can gradually increase the leverage to a comfortable level.

Automated Trading

This trading strategy involves using bots for cryptocurrency trading. This saves the trader’s time – all routine operations will be performed by the bot.

Cryptocurrency trading algorithms are used to perform the following tasks:

• trading signals – detection, prioritization, elimination of false signals;

• entering the market – determining entry points, choosing position size depending on the risks;

• trading goals and risk management – setting take profits and stop losses, averaging positions when reaching support and resistance levels;

• position hedging.

A well-written trading bot can do your routine work, but you cannot fully rely on a trading algorithm. You need to at least test it on different markets, monitor the execution in live trading, keep statistics and collect data to improve the bot.

Swing trading crypto

In the article “What is swing trading? The best strategies, indicators and signals for trading” we talked in detail about this trading strategy, as well as how to use it on the cryptocurrency exchange. Here we will only briefly touch on the nuances of the method.

Swing trading is a long-term strategy in which positions can be held for several days or even a week. It does not necessarily take into account the trading fees of the exchange. Unlike an intraday strategy, swing trading does not require constant attention. The strategy allows for the use of cryptocurrencies with low volatility.

Technical analysis is used for market research, since the effect of 90% of the news will not show during the trading week. However, it is the news that leads to losses for swing traders. An initially profitable position can quickly become unprofitable after the release of important media reports. Therefore, swing strategy is employed by crypto traders who are ready to take risks for the sake of high earnings.

Position trading crypto

This is a trading method with an even longer horizon. With this strategy, you are supposed to hold positions for several weeks, months or even years. The strategy is more like direct investment in securities, but you can open short positions.

For position crypto trading, choose highly liquid assets so that the daily trading fees of the exchange do not eat up most of the profits. You should also use minimum leverage. The strategy does not require you to actively monitor the market, so news can quickly lead to serious losses with high leverage.

Position trading itself involves searching for a global trend on large timeframes and opening positions in its direction. Minor price fluctuations that occur within one or several days are not taken into account.

Enter after the first rollback, when support and resistance levels are broken, or when other long-term trend signals appear. Take profit when you’ve reached your long-term goals, which are usually determined by support or resistance levels.

Arbitrage trading crypto

Arbitrage trading involves buying securities on one market and reselling them at a premium on another. In our case, the trader buys cryptocurrency on one exchange and then resells it at a higher price on another.

For example, a coin costs $20,000 on Binance and $20,500 on Coinbase. Therefore, you can buy this cryptocurrency on Binance and then sell it for more on Coinbase.

This approach takes into account unexpected price fluctuations as they can eat up the projected profits or even lead to losses. Therefore, it is better to sell the cryptocurrency immediately after purchase. During periods of high volatility, engaging in arbitrage trading is not recommended.

The traders should also take trading fees into consideration. If the difference in the prices is small, the fees can eliminate all the profits. Check the size of the fees on exchanges and take them into account when calculating potential income.

Dollar Cost Averaging

One of the challenges of technical analysis is predicting market entry points. For this, an alternative method was invented – dollar cost averaging.

All the actions can be divided into two stages:

1. If the price is declining, buy the cryptocurrency in price intervals tied either to the Fibonacci numbers or through a fixed value.

2. If the price is rising, close the position in part or completely when a fixed percentage of profitability or a certain price mark is reached.

This strategy is simple to execute and suitable for beginner traders. You will also avoid stressful decisions when choosing the right moment to open a position. However, the trader will still have to decide when to sell the accumulated assets.

When You Can Trade Crypto

Trading is most profitable during periods of high liquidity. For traditional assets, trading volumes are at the highest during the operation time of the stock exchanges.

The peculiar quality of crypto trading is that virtual currency markets are open 24/7. But on weekends and holidays, the activity of large players decreases. This happens for two reasons:

Therefore, the best time to trade cryptocurrencies is Monday to Friday. The daily peak of activity is usually at 14:00 UTC. There are also technical breaks that each platform takes at different times. However, they usually do not last long – from 5 to 20 minutes.

Why Invest in Cryptocurrency

People who are not familiar with the world of cryptocurrencies often ask: “Why invest in cryptocurrencies when there are classic trading instruments?”. The main advantage of digital asset trading is increased volatility. This is a good opportunity to earn money, but the risks are much higher.

Almost every day there is a new cryptocurrency available for investment. In recent years, crypto trading has significantly expanded its horizons, which cannot be said about other types of trading.

Crypto vs Forex

Crypto and currency trading have a lot in common, but there are also differences.

Both markets involve trading in currency pairs. Digital currencies are traded on the crypto market, while fiat currencies are traded on Forex. Hence the two main differences. The first one is trading time: crypto can be traded around the clock 7 days a week, but on Forex, active trading takes place Monday to Friday during the operating time of stock exchanges. The second difference is that the volatility of cryptocurrencies is much higher.

The chart above shows the ATR volatility indicator for the BTCUSD pair.

Compare it to the most volatile fiat pair EURUSD.

Quotes of cryptocurrencies and fiat currencies depend on the demand for them. However, while the rate of crypto assets is determined by the popularity and development of the blockchain platform, classical currencies largely depend on the decisions of central banks, financial authorities of the issuing countries, their economies, and the policies of international financial institutions.

Fundamental analysis is significantly different for the above two types of assets in terms of factors affecting the price of assets. However, in technical analysis the methods and tools are the same: trends, support and resistance levels, trading volumes, and indicators.

Parameter	Cryptocurrency	Fiat currency
Type	Decentralized	Centralized
Trading time	24/7	Monday-Friday, high volatility during stock exchange hours
Volatility	High	Medium
Fundamental analysis	Buyer demand, mining activity, project news, FUD (fear, uncertainty and doubt of investors and traders)	The state of the global economy, as well as the economy of the issuer’s country; monetary policy of countries and international institutions; demand; often correlates with energy resources
Technical analysis	+	+
Market sentiment/psychology	+	+

Crypto vs Stocks

When choosing whether you should invest in cryptocurrencies or stocks, remember that these types of financial instruments are significantly different. Let’s start with the basics: cryptocurrency is a digital (virtual) asset that exists in the form of information. Shares are securities of real-life companies and enterprises.

When buying a security, the investor becomes a co-owner of the company. Therefore, in addition to direct earnings on changes in the price of the asset, they can profit from dividends and influence the company’s policy. In some crypto projects, token holders can also influence the further development of the blockchain through voting.

There are other differences as well:

Parameter	Cryptocurrency	Stocks
Liquidity	+	+
Type	Virtual asset	Securities of real-life companies
Earnings	From changes in quotes	From asset price changes and dividends.
Volatility	High	Medium
Fundamental analysis	Buyer demand, mining activity, project news, FUD (fear, uncertainty and doubt of investors and traders)	The state of the global economy, as well as the economy of the issuer’s country; monetary policy of countries and international institutions; demand; often correlates with energy resources
Technical analysis	+	+
Market sentiment/psychology	+	+

Advantages of crypto trading

• High market volatility. Competent trading provides a good income in a short time.

• A wide range of trading instruments. New projects appear regularly.

• Decentralized trading system with a high level of security.

• Cryptocurrency trading is available for investors with a small capital.

• The rapid development of the industry and its introduction into various areas of life provides good opportunities for investors.

• Crypto trading is available at any time, even on weekends.

• A variety of trading platforms from classic exchanges to brokers.

• Prices can be predicted using fundamental and technical analysis, and quotes can also be predicted by market sentiment.

• Cryptocurrency can be easily exchanged for fiat currencies.

• Minimal control by financial institutions. Low dependence on global economic processes.

Cryptocurrency Risks & Opportunities

The decentralized trading system provides crypto trading with a certain freedom. The cryptocurrency market is not tied to classical financial institutions, it is weakly influenced by economic processes and regulatory authorities. On the other hand, virtual currencies are unregulated and very unpredictable assets that develop according to the rules that are completely new for classical analysis.

Market volatility has both advantages and disadvantages. Along with high potential profits, crypto trading carries great risks, especially when trading on margin. Without knowing the basics of crypto analysis, novice investors can lose their funds in just a few unsuccessful trades. You need to be careful when trading cryptocurrencies.

Another point to consider is operational security. All transactions in the cryptocurrency market are final and cannot be cancelled. This allows shady exchanges and brokers to make quick cash at the expense of newbies. However, if you only work with trusted sites, the risk of being deceived is minimal.