Cryptocurrency trading from scratch (full guide for beginners)
- The choice of cryptocurrency
- Price analysis
- Ways to enter the market
- Determine the earlier sale price
- Factors affecting the price
- Indicators of other markets
- Top efficient trading strategies for beginners
- TOP tips by Maxitrade experts on how to make a profit
Buying and selling a cryptocurrency, in other words, trading, has become incredibly popular in the last few years. Many beginners, as well as experienced traders, tend to try their hand at this type of trading and of course, get the maximum profit from it.
Maxitrade official site reports that unlike experienced and most importantly successful traders, newbies often think that they are going to make easy and fast money the worst of all, mistakenly flattening that the market for currencies is just one of the ways to get rich quickly. However, you should not deceive yourself. It’s not as simple as your friends or articles on the Internet could tell you. Nevertheless, there is nothing terrible here!
Today, along with experts from Maxitrade, we will try to reveal all the most essential points and strategies that will be necessary for trading cryptocurrency from scratch.
According to Maxitrade, the first thing you need to do as a future trader is to study those coins in which you decide to invest your money. It seems quite evident that you need to know the subject of your investment and in the case of cryptocurrency, it is even more important to know which technology is based on the coin you are interested in. However, we will discuss this in more detail later. To begin with, we will need to learn the basic concepts of the crypto trading market.
The cryptocurrency market operates 24 hours a day, and every day of the week. By and large, the trading volume in the cryptocurrency market is different. According to Maxitrade analytics, this is due to the fact that traders from different countries appear on the market at different time, which in itself is logical. However, these changes do not play a special role.
Maxitrade official site reports that the cryptocurrency market is considered to have very high volatility. This means that over a concise period of time (sometimes it is minutes or hours), the price indicators can change dramatically by tens of percent, both in the direction of growth and decline. The cryptocurrency market is different from the well-known and traditional forex and stock markets.
Even though the cryptocurrency market is precarious, it is best suited for novice traders. However, according to Maxitrade tips, remember that the growth rate of some coins, which you can see on different charts, does not always lead to a mandatory profit, because after the growth a very sharp fall can occur. And if you do not have time to sell the coin in time or decide to wait for an even higher price, and the exchange rate collapses, you will end up losing money. Nevertheless, today’s information, which Maxitrade experts shared with us, will help you to reduce such risks significantly.
Find a professional cryptocurrency broker
Maxitrade official site reports that since at the initial stage, in addition to studying the information, you will also need practice, we advise you to start your first steps with the crypto-broker. Thanks to the advice and help of a broker, you will be able over time to choose different trading strategies for yourself and complete all trading operations.
However, it is worth being very careful since there are so many companies on the Internet that pretend to be crypto brokers, and in fact, they are nothing but a scam. However, in order to facilitate your choice, we will list the main indicators on which you can rely on when choosing a crypto broker.
It goes without saying that each of us is interested in paying less and earning more. This is possible if the commission that you will pay the broker will be the minimum possible. That is why, according to Maxitrade analytics, it is so essential before accepting the conditions of a brokerage company to take into account this vital point and specify what percentage and what you will pay for.
Most brokers set their commissions in the amount of the spread amount to open a position. In turn, according to Maxitrade analytics, the spread is the difference between the amount you pay for cryptocurrency and the amount you get after you sell the coin to a broker.
There are also brokers who will charge you an extra fee, such as a swap. This is the commission that you will need to pay in case you decide to leave your position for the night. Such crypto brokers are more suitable for day trading strategies. If you are interested in investing for a long position, then a broker who has no commission for swaps will suit you.
Maxitrade official site reports that if, after studying different cryptocurrencies, you chose individual coins, be sure to check with a potential broker whether the broker trades with them or not.
Pay attention to leverage! According to Maxitrade analytics, leverage is a tool that allows you to make money on a small price dynamics of cryptocurrency. This is a handy and accessible tool, but it is mainly used by experienced traders who understand all the indicators. A newcomer should not be in a hurry with this tool and entrust its use to a broker. In any case, the cryptocurrency market is very volatile, and you can earn, even without leverage.
The choice of cryptocurrency
If you have not yet decided which cryptocurrency you want to invest in, then now is the time to do it! At this stage, it is imperative to choose a coin that, in your opinion or the opinion of experts, has great future potential. According to Maxitrade you definitely need not only to know as much information about this coin as possible but also to believe that the technology on which it is based can be brought to life and thus bring more significant profit.
Maxitrade experts believe that so to select a coin, you should pay attention to the following indicators:
- Infrastructure. In other words, who finances, where is developed, etc.
- Purpose of technology. What issues will this technology solve, what is it created for (for financial transactions, data protection, etc.) and when will it be realized.
- Technology developers. All data on the development team (their number, experience, possible successful projects, and so on).
- Popularity rating. Analyze the demand for the selected coin. Do they write about it in the media, what demand and supply among traders, the volume of day trading, etc.
These indicators will help you to decide very well what approximate potential of a cryptocurrency in which you plan to invest. We advise you to carefully select the coins and choose in such a way that your choice will give you the answer to at least three of the four indicators.
The current price of the coin is a fundamental issue. This may be its minimum or peak value. However, according to Maxitrade analytics in order to succeed in the cryptocurrency market, the most important thing is to choose the right entry point. In other words, buy at cheaper and sell at a more expensive price.
During the operation of the crypto market, there were quite a few signals when the coin began to show growth, and then fell sharply in price, and those who bought coins at the price increase simply lost money. Maxitrade official site reports that a similar situation was with such a cryptocurrency as Ethereum, which showed stable growth from the beginning of 2017 to June and then plummeted to half its value in less than a month.
Of course, top currencies often become the target of news, their technologies are continually evolving, but it will be challenging for a beginner to buy, that is, to enter the market and understand signals when to sell.
According to Maxitrade analytics, cryptocurrency is not the easiest method of investing, so it’s hard to determine how long the growth will last, and when the currency rate starts to fall, it can be difficult even for experienced traders. It is also worth noting that you do not have to chase total profits, that is, waiting for the coin signals to reach its peak price because often greed will tell you to wait and not sell as a result can lead you to lose money.
Ways to enter the market
Maxitrade experts believe that one of the best strategies to entering the market for both newbies and experienced traders is the principle of investing from one of the most successful and well-known investors in the world, Warren Buffet. This principle is straightforward to express as follows, buy in a falling market and sell in a growing market!
In other words, when the market falls, wait until the price reaches the lowest possible indicators and starts an upward correction, and when the price reaches the top indicators you need, you can sell your cryptocurrency. We will talk about sales strategies in more detail later, but this is the basic knowledge you need initially.
Determine the earlier sale price
Traders start buying a cryptocurrency when they think it is as low as possible. However, according to Maxitrade after the price has undergone a correction and the rate has begun to grow, it’s time to decide at what price mark you are ready to sell the coin and earn (if your strategy is to speculate on the price increase).
There is no need to wait for the price peak, since a sharp fall may follow growth, so you should not be greedy here. Maxitrade experts believe that you need to ask yourself if a currency is worth more than it shows now? If you think that the coin has reached a price that is favorable to you, then it is better to sell it and thereby fix the profit.
Factors affecting the price
According to Maxitrade analytics, several fundamental signals in the cryptocurrency market can influence the price of a coin. Among the most important are the following:
- Government regulations
- News from the media
- Recognition by large investors
- Technological breakthroughs and failures
- Indicators of other markets
Government decrees are mostly public statements by representatives of a state about the possible regulation of cryptocurrency. Maxitrade official site reports that this can be a piece of positive news, as well as forecasts, for example, about the prohibition of payments, which accordingly will have negative consequences on the market value.
For example, there was somehow news that the Chinese government banned the ICO. As a consequence, the price of the leading currency Bitcoin quickly fell, and in the wake of it, the indicators of all altcoins also fell. That is why it is necessary to continually monitor the news of the crypto market since time is everything!
News from the media
It is no secret that information in the media directly affects the cryptocurrency rates. According to Maxitrade investors and the entire market are highly influenced by statements that are heard on TV screens or written in official publications. Some public figures sometimes try to change the rate of individual coins. Such people mostly become big names from the world of finance and investment.
For example, Maxitrade official site reports that there was a case when Jamie Dimon is the CEO of one of America’s best-known and largest bank J.P. Morgan made a public statement in which he called Bitcoin nothing more than a fraud and another bubble that would burst sooner or later. Naturally, after such signals, the market did not take long and sharply brought down prices. More subsequently, Jamie Dimon was heavily criticized and accused of having influenced the Bitcoin indicators artificially and that his statements were nothing but manipulation.
Recognition by large investors
After major international companies like Amazon and eBay announced that they would accept payments in cryptocurrency, how do you think what happened with the rate of cryptocurrency? Of course, it grew up! Therefore, Maxitrade experts believe that it is essential to keep track of such information because when investors hear that a particular currency has received support from a world-renowned company, this only contributes to the growth and strengthening of the position of a particular coin and the market as a whole.
Technological breakthroughs and failures
As we said earlier, all cryptocurrencies are based on a particular technology. Maxitrade official site reports that any technological breakthrough or vice versa failure directly affects the rate dynamics of the coin. As a rule, positive news may look like a successful test program, a new security protocol that will attract more investors. And perhaps vice versa, disruption of the test schedule, unsuccessful program tests, etc.
Indicators of other markets
The cryptocurrency market also responds to significant changes and news from other markets, such as forex or stock market. Maxitrade official site reports that the cryptocurrency market is already very mature, and therefore, it has learned to extract all possible benefits from negative situations in other markets.
Top efficient trading strategies for beginners
After we have considered the basic concepts and indicators of the cryptocurrency market, it’s time to analyze the most effective trading strategies that will be useful for a beginner. Today we will discuss the following strategies:
- Long-term Holding (HODL Method)
- Day trading
Maxi Trade official site pay attention that, this strategy deserves attention since it is one of the simplest and most frequently used among crypto traders. This strategy is good for both beginners as well as for experienced players. Holding strategy does not require any special technical skills or knowledge. According to Maxitrade, all you need is to choose a promising coin and having invested in it, as a matter of fact, just put it into a shelter.
As you can see, the rules are quite simple and are based on the so-called investment in a long position. In practice it may look like this, for example, you buy one bitcoin on any of the exchanges using other cryptocurrencies or using your credit card (we do not recommend to do this with a card) and just move it to a cold cryptocurrency wallet. Then you just forget about it for five years and then look at how much the rate has risen over the years and how much you have earned.
According to Maxitrade analytics, this strategy is based on a principle that you should not follow the rate and the situation on the market, but rather try not to pay attention to any market indicators and forecasts over the years. The fact that you will not correctly track prices will help you not to act boldly and succumb to the standard wave of panic, which over the years may be dozens. However, the main idea is that the coins cannot be sold and that it needs to be preserved for growth in future periods.
It goes without saying that the holding is not the most effective tool, and it has its drawbacks. First, it is not a fact that the cryptocurrency chosen by you will necessarily grow in the future. Secondly, the coin may simply disappear from the market. Thirdly, it is not always profitable to buy currency in one period of time. The fact is that the market is very highly volatile, and the price can fall well below the current one.
That is why, in order to reduce the risks and disadvantages of this strategy, Maxitrade experts advise to apply its improved version, which is called the “strategy of average costs.” This strategy involves the practice of buying a coin on a specific schedule. For example, you buy Bitcoin for dollars. And so, again, for example, today a coin costs 7000 dollars, and you purchased it, after a couple of days the price becomes 6400 dollars for a coin, and you bought another one. Thus, the average price for two coins you have amounted to 6700 dollars.
According to Maxitrade analytics, this strategy is aimed at reducing the risk of financial failure since after buying the first coin, and you were able to buy a second cheaper and secured a gap in case of market fluctuations.
Pay your attention, if you are just starting your first steps in the crypto market, first of all, analyze the coin in which you plan to invest. Maxitrade official site reports that basic fundamental analysis will help you understand whether the currency of your choice has growth prospects, which coins compete with it, at what stage the technological development of the coin and when can this technology be brought to life.
According to Maxitrade analytics that if we talk about long-term investments in the cryptocurrency market, it is worth remembering that even top and stable coins will still experience a series of shocks and rate fluctuations. But if you can psychologically convince yourself not to check the price indicators and wait, then you will see that in the end it was able to survive all recessions and set a decent price.
This strategy is a reflection of the previous holding strategy. Maxitrade experts believe that the main principle of this strategy is trading operations that a trader makes in one day. At the same time, earnings are based on a small price gap, which arises due to fluctuations throughout the day.
Maxi trade official site reports that day trading is undoubtedly an effective strategy in the crypto market, and it can bring significant profits if the coin volatility is used efficiently. However, it is worth noting that the daily strategy is a more risky tool in contrast to the holding strategy. According to Maxitrade, using this strategy, a trader can very quickly lose money if he distributes the financial burden incorrectly.
In other words, using this type of strategy, a trader needs to clearly understand what amounts he can risk (and the risk is not very small) and set the so-called stop-loss parameters to prevent sharp fluctuations and, accordingly, loss of money.
According to Maxitrade analytics in the market of cryptocurrency, everything happens very quickly. It is considered quite acceptable if the coin shows up to 5% rate fluctuations per day. The reasons can be many, from news to minor changes in supply and demand in the market.
Remember how important it is to be psychologically resilient to different forecasts and to adhere to pre-planned trading indicators. The more often you trade with a positive result, the higher will be your profit, and your stop-loss operations will become more consistent.
According to Maxitrade analytics, since the crypto market has high volatility, sometimes literally three transactions are enough to get a good net profit. However, it is necessary to take into account the fact that day trading is time-consuming, so trading can last longer than you expected. First, you need to try to track a small number of transactions at the same time, and later when it is quite comfortable to do this, you can conduct daily trading with large volumes of transactions.
Also, for successful day trading, Maxitrade experts advise using various trading indicators, such as:
- Exponential moving averages (EMA)
- Relative Strength Index (RSI)
- Moving Average Convergence Divergence (MACD)
However, please note that none of these indicators will be able to 100% show you the situation with the coin. The primary indicator has always been and will be the price. Maxitrade experts believe that based on the price situation, you will be able to make adequate and effective decisions, and the indicators can only serve as an additional confirmation of your choice. Remember that almost all cryptocurrencies depend on general trends in the market and do not make decisions with large sums if the market is in a fever.
According to Maxitrade analytics if you are pursuing the goal of quick and significant earnings, then you definitely should pay attention to such a strategy as scalping. Scalping allows for concise periods of time to earn a substantial profit, which exceeds even the indicators of day trading. Nevertheless, it is worth noting that scalping is relevant to large-volume coins and has even more significant risks than day trading.
Maxitrade experts believe scalping is a fascinating and useful tool that helps to make money on the so-called microfluctuations of the cryptocurrency rate. In other words, it is earnings on changes in the price rate of a coin within one, two, or five minutes. Again, the high volatility of the cryptocurrency market makes scalping a very effective way to make money.
According to Maxitrade, today, the volatility of almost all coins is very high, and this does not apply to more stable coins, such as:
- Tether (USDT)
- True USD
For our part, Maxitrade experts will give you some tips, namely try to scalp on significant exchanges or using popular online trading platforms. Also among the coins for scalping is worth noting the top 30 cryptocurrencies (based on the market capitalization). Among these are:
- Litecoin (LTC)
- Bitcoin Cash (BCH)
- Ethereum (ETH)
As for the price indicators, even with low volatility, minor fluctuations occur much more often than large ones and are about 0.5-1% every minute. Therefore, the net profit can be obtained almost every day and at the same time does not depend on what is happening with the current market situation.
Maxi trade official site reports that scalping is definitely one of the most exciting and effective methods of trading in the cryptocurrency market. However, according to Maxitrade, it should be borne in mind that this is at the same time the riskiest strategy of earnings because if you do not correctly configure the stop loss, you can very quickly lose significant amounts of money. Remember that this method will obviously require from you a particular extract for successful results.
Also for more effective use of scalping, find exchanges with the smallest trade commissions per transaction, since you will have quite a few of them with such a strategy. Maxitrade experts believe that the most important thing is that you can find the best balance between commissions and trading volumes since such trading commissions can completely cover your profits.
TOP tips by Maxitrade experts on how to make a profit
Well, finally, Maxitrade experts decided to share with you the essential tips that will help you avoid the most common mistakes of newbies.
Learn the theory
Before you conduct your first bargain, first of all, you need to maximize your knowledge both on the coin you want to acquire and on the strategy you will apply. At a minimum, learn about the meaning of the following terms:
- Japanese Candlestick Chart
- Order Book
- Depth charts
Knowing these terms and how to use them will help you start trading and get a positive experience.
You will be charged a fee for using a particular platform. According to Maxitrade, this can be a commission for each transaction or a commission for the result. In any case, carefully review this issue and read the opinions of experienced traders. The right choice will allow you to pay less commission and be a more successful trader.
Technical analysis shows the dynamics and indicators of past cryptocurrency results. Maxitrade official site reports that this is useful to draw certain conclusions, but one should not even try to predict the future forecast of the coin with the help of the past. Believe us the predictions of even very reputable specialists come true very rarely.
Novice traders often assume that it’s easy to make a difference in prices on two different platforms and does not have any pitfalls. This is partly true, but do not forget about the risks! Namely, the exchange rate, which may increase. According to Maxitrade analytics, such risks may take to a minimum if you have money or coins on several platforms, for quick exchange between your accounts. However, again, carefully consider how much they will charge you a commission, what is the delay in order fulfillment, etc.
Maxi Trade official site reports that in order to reduce the risks of a collapse of the exchange rate for a particular coin, it is not worth spending all your investments on one specific currency. It is best to buy top coins in about the following ratio:
- 40% Bitcoin
- 25% Ethereum
- 20% Bitcoin cash
- 15% Litecoin
Thus, if one coin shows a significant drop, the rest can show growth and thereby reduce your losses.
Do not forget trading is not a game, but there is a sense of risk, luck and various mythical signals that someone considers relevant for such investments, but always try to learn new approaches, analyze, take trends into account and eliminate greed from this equation.
Read the news, follow the top traders, work with a broker (if you do not have enough time and knowledge), and always be aware of the latest trends in the market. This will help you make the right decisions and not waste time and money. As an option, you can use the news section of Maxitrade website, and moreover, on this site, there are a lot of training articles on trading. Another source of information for you can be CoinMarketCap, where you will find current price charts and all information about coins.
In conclusion, we want to advise you on the following, be attentive to the money that you decide to invest in the cryptocurrency market. It must be remembered that the risks here are significant and that you can be left with nothing at any time. Therefore, do not spend the last money and savings. Take care of tomorrow! Worst of all, when people take their debts from acquaintances and friends to take a chance, but at the same time having no knowledge or skills to trade. Moreover, start to work with a professional broker like Maxitrade. At the very least, these are professionals who will help you take the first steps in crypto trading.
Again, many comments about the problems with the withdrawal of funds… I believe everyone is already so tired of that! If you really traded with a broker, then your comments could be either about success or the failure of trading. Yes, and the amount of 10 000, 50 000 or even 200 000 dollars that they did not return is a top common rumor. Do you think a literate person will believe in this? I doubt it! In general, those who really thought about investing and earning join and trust Maxitrade should know that it is personally tested not only by time but also by the reliability of withdrawal of funds.
Well, what else to say?! So far, everything is going quite well. Even despite some disagreements with my manager, I am satisfied with the cooperation — definitely an excellent service, the feedback works, with the charts and quotes full order. I deduce money not often, I try to conclude less often, but I withdraw large sums. Well, how large? For the first time, $ 1000 was withdrawn, and two subsequent times already at $ 3000. It happens that occasionally I see reviews about delays of conclusions and I don’t understand if this is true or the work of competitors. I have it all goes well, so why should the others be the opposite?! Well, let those guys write whatever they want. According to basic requirements, the company is universal, suitable for different levels of clients, with different financial capabilities.
I think Maxitrade deserves respect, and the broker offers traders right trading conditions – a wide variety of assets, a choice of trading platforms, various deposit and withdrawal options, and much more. Is this a professional approach? Yes!
Understandably, there will always be disgruntled. Someone does not like the minimum deposit; someone responds slowly in the support service; someone finds other reasons. But you know, there are no ideals in our world. But you can safely trade, and do not pay attention to the fact that someone did not like something.
At the moment, Maxitrade is the best of all the brokers I have tried. I witnessed great support, always almost immediate deposit/withdrawal of funds, perfect work with my personal broker, the minimum number of problems encountered, a convenient, well-thought-out site interface, a very advanced service. It remains only to wish not to change anything for the worse. Trading in crypto markets undoubtedly carries certain risks. The trader must have a sufficient level of training to reduce them. Therefore, I decided for myself to use the services of an experienced broker and therefore, now I can be proud of my results.
Your comment is very similar to the common criticism of competitors, which was just copied somewhere) What does it mean at first everything went well, but then … With me, everything went well with Maxitrade from the very beginning, and it still works!
In general, I have been working with this company on the forex market for a long time, and when they started trading cryptocurrency, I immediately decided to invest an additional 1000 dollars in this direction. Now I’m not just sure that they understand this direction, but they also earn their clients a good net income. I don’t want to say how much it gives me a month, but this is more than a thousand dollars since the beginning of 2019.
Those of you who think that you can make that kind of money yourself in the crypto market, so I wish you good luck. However, those who are willing to invest and earn money should definitely try to work with Maxitrade!
Remember, it is not necessary to invest large sums to start earning, just try to do it with a minimum deposit, and when you see that I was right, add as much as you can!
Hello everyone, well, I very much doubt that you would be able to invest such amounts, and having lost them write just a couple of lines about it) I’ve been trading recently, but I want to say that at the beginning when trading volumes began to increase and net profit amounts grow, the first thing I thought about was that I could quickly and most importantly withdraw funds without any problems. That is why I tried to withdraw $ 500 from the money I earned for the test. After 3 hours the money was on my card! It was enjoyable that the company keeps its word. After all, today, most crypto brokers are just scammers!
It is also worth noting that the broker is very experienced, and I always listen to his forecasts, and therefore, I can earn a decent net income! Soon the summer will come, and I can go on vacation, and most importantly, without my presence, the broker will continue to earn!
Of course, I am not an experienced trader, but I try to keep track of the market news myself, because every trader needs to understand where the market is moving. Now my day begins with news about my cryptocurrency rates and counting profits for yesterday’s trading!
Those who are still just thinking of starting cryptocurrency trading, I definitely advise you to do it with a broker. This way, you will start earning and learning faster. Good luck to all of us)
I also think that the platform is very convenient and secure! I have only been trading with Maxitrade for three months, but have already managed to earn my first 500 dollars! Of course, for someone, this amount seems insignificant, but with a minimum deposit and for such a time, this is cool! I think to work for a few more months more, and if everything turns out as well, then I want to invest more. The fact is that because of the different reviews, I was worried that I could not withdraw the money I earned, but today, after a request for withdrawal ($ 500), the money came on the card within two hours!
Very reasoned comment) I do not understand why you are wasting your time on empty words?)
I have been working with Maxitrade on forex for more than a year and already five months in cryptocurrency, and the result is outstanding, considering that I don’t spend my time on trading. All I do is sometimes look at the trading operations for my account and fix the profit. I think everyone who wants to earn extra money can work with this broker and does not worry about anything.