Let’s make this clear right at the beginning: I don’t want anybody to blindly rush into the crypto market and start trading like there’s no tomorrow.
Getting started with crypto requires a thoughtful process where you should assess many (personal) factors.
On the other hand, most how-tos on the internet overcomplicate the process of getting started with crypto trading. I have been down that road and was overwhelmed by the knowledge I should have, the decisions I should make, and the tools I should use.
Today, I know there’s a lot of noise, and many things labeled as mandatory are everything but not crucial in the beginning.
With this post, I want to discuss five aspects you don’t need if you want to get started with crypto trading (although many how-to’s tell you).
Let’s dive in!
Things You Don’t Need #1 — A Wallet
Countless videos, blog posts, and how-to guides tell you the first step when entering the crypto (trading) world is getting a wallet. They then discuss the pros and cons of hot and cold wallets, how to set them up, and why it is so important to have one.
But there’s one colossal misunderstanding: Wallets are essential if you want to buy and hold cryptocurrencies, but they are not needed when trading. These are just two different use cases. One is about investing, a.k.a. long-term holding, and one is about trading.
So, a wallet is inevitable if you want to buy Bitcoin and hold it for the next 20 years.
But this isn’t trading.
When trading, you buy and sell crypto assets on an exchange. You hold the asset just for a few minutes/hours/days, and in many cases, you don’t even buy the actual currency but futures or options.
Therefore, there’s absolutely no need (and use case) for a wallet when actively trading.
Things You Don’t Need #2 — Expert Blockchain/Web3/Crypto Knowledge
This is another of my favorites and an opinion you can read everywhere.
Many people and resources tell you to study blockchain technology, Web3, etc., before trading.
Again, there’s the same misconception: trading vs. investing.
If you plan a long-term investment, you should clearly understand the industry. However, we are talking about trading. If I want to trade NVIDIA stocks, I don’t need to be an AI chip expert, right?
There are so many approaches to trading based on technical indicators, supply and demand levels, trends, etc. None of them require you to understand blockchain.
Of course, knowing details about the asset you want to trade makes sense. But again, you don’t need to be an expert in this field.
Things You Don’t Need #3 — Plenty Of Time (a.k.a Crypto Trading is a Full-Time Job)
The assumption that you need to dedicate several hours every day if you want to start crypto trading is way too general. In this case, it entirely depends on your trading strategy.
Indeed, if you’re going to day-trade cryptos, you must invest considerable time.
However, day trading is probably the last thing you should consider when you want to start crypto trading.
Therefore, if you start with swing trading or trading the daily chart, the amount of time required is manageable besides a 9-5 job. You can easily invest 1-3 hours daily—frankly speaking, this is more than enough if you do it right!
Things You Don’t Need #4 — Large Initial Investment
When people dip their toes into crypto trading, they usually look at Bitcoin first. I have had several conversations where people told me they don’t have the required investment to buy Bitcoin. I didn’t understand what they meant in the beginning.
However, some believe you can only buy an entire coin, like 1 Bitcoin.
If you thought that too, I have good news: It’s the opposite. Cryptocurrencies are designed so that you can buy small portions. For example, you can start with just 0.0001 Bitcoin. Usually, exchanges have a lower limit of $5-$10 as minimum transactions. So, you can start with a super small investment.
Things You Don’t Need #5 — Being A Trading/Chart Expert
“But I can’t read charts,” “But I don’t understand technical indicators,” “But I don’t know where to start.” This is just a small collection of things I hear people saying. Those sentences usually follow the initial statement, “I would love to get into crypto trading, but…”.
I think there are two aspects you need to consider: First of all, I don’t know any trader (and you can apply that to any other job/skill) who started as an expert. When Messi began playing football, he probably wasn’t as good as he had been at the top of his career :)
So, I think it’s more like an excuse not to start. I am not here to convince anyone. On the contrary, one has to ask themselves, “Do I want to get started with crypto trading or not?” If the answer is yes, then start. You will learn everything along the way.