Cryptocurrency trading is all about buying low and selling high. Unlike investing which is about holding the coins for a long time, trading means predicting the price movement by doing research and studying the price pattern. There are two ways through which people trade and invest in cryptocurrency and analyze the price- fundamental analysis and technical analysis.
A successful trader has to invest time, money and effort before he gets good at it. In order to trade or invest in cryptocurrency, a person should follow these steps:
1. Open an account at a cryptocurrency exchange or broker.
2. Verify your identity
3. Deposit money in your account
4. Start with the first position
Cryptocurrency trading is different from investing. When people invest in crypto, it is about purchasing the coin and holding it. In simple words, they believe that the price will eventually rise or fall according to their prediction. Basically, people invest in crypto because they have faith in ideology and technology. Holding is important in crypto investment if you want to make large money
On the other hand, cryptocurrency traders buy and sell their preferred coins in short term to make profits and can increase their winning trade rates with trading robots such as Crypto Comeback Pro. Sometimes traders don’t even bother to look behind the technology. All they care about is look at the flow of the coin and make their trade. The simple reason why cryptocurrency offers you immense profits even in the short run is because:
1. It is very volatile.
2. It is open 24x7 so you can buy and sell any time you want.
3. It has unregulated landscape making it simple to commence trading without any long verification procedures.
Trading methods
While all traders want to earn profit, they choose different methods to make it successful!
Day trading: This method is about doing multiple trades in a day and making attempts for short term profits with slight price movement. Day traders have to spend a lot of time staring at the screen and they close all their trades at the end of the day.
Scalping: It is also a trading strategy where people make immense profits with small price change. It is a short-term trading and it involves making repeated profits with limited risks. Scalpers may take dozens or hundreds of trades every day.
Swing trading: It is also a short-term trading where traders take advantage of a swing in the price cycle. Traders hold the trade till the movement dies and book their profit. Swing traders look at the big picture and they don’t have to see the screen the whole day.
No matter which way you go with trading it is important that you do research and choose the broker that is highly reliable and trust worthy. RoyalCBank is one such name you can trust on when it comes to trading in cryptocurrencies and assets like CFDs.
The difference between trading and investing
While both the methods generate profits for a cryptocurrency holder, it depends on the kind of strategy you have chosen. While trading is short term, investment is all about holding the coin for years.
So, it depends on you. The kind of money you want and in what time period. Just do proper research to make sure that you don’t end up making losses in it.