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A Complete Guide to Cryptocurrency Trading for Beginners
TL;DR
Cryptocurrency trading, or the buying and selling of digital assets like Bitcoin and Ethereum, has emerged as a dynamic and potentially lucrative endeavor.For beginners, it’s essential to understand what makes cryptocurrency unique, familiarize yourself with common trading concepts such as order books, trading pairs, and order types, and become comfortable with technical analysis charts and tools.This comprehensive guide will teach beginners all this foundational knowledge and prepare you to embark on your crypto trading journey.
What Is Cryptocurrency Trading?
Cryptocurrency trading, or the buying and selling of digital assets like Bitcoin (BTC) and Ethereum (ETH), has emerged as a dynamic and potentially lucrative endeavor. As cryptocurrencies continue to captivate global interest and more institutional investors join the sector, cryptocurrency trading is gaining increasing popularity.
Cryptocurrency trading often aims to capitalize on price fluctuations. Traders aim to buy these cryptocurrencies when prices are low and sell when prices surge, effectively profiting from the market's volatility. This fast-paced landscape presents both opportunities and challenges for beginners.
For those intrigued by the prospect of engaging in cryptocurrency trading, a comprehensive understanding of the market's intricacies is paramount. This guide aims to equip beginners with the foundational knowledge necessary to navigate this potentially rewarding landscape.
What Are Cryptocurrencies?
Cryptocurrencies have taken the financial world by storm, redefining how we perceive money and transactions.
Cryptocurrencies, like Bitcoin and Ethereum, are digital currencies that employ an innovative technology known as blockchain to ensure their security and integrity.
Unlike regular money from banks, cryptocurrencies aren't controlled by any one big company or government. Instead, cryptocurrencies are like public digital record books that anyone around the world can see and keep a copy of.
As a result, cryptocurrencies are global, secure, and transparent. You can generally send and receive these coins to anyone in the world, at a faster speed without extra fees or paperwork required by banks.
People often say that cryptocurrencies are decentralized, which is another way of saying that they are not controlled by a centralized entity. Essentially, you own your own digital wallet that gives you more freedom and control over your money.
How to Start Trading Cryptocurrency
Getting started with cryptocurrency trading requires a thoughtful approach and careful preparation.
Before diving into the world of cryptocurrency trading, it's crucial to invest time in learning. You can rely on Binance Academy’s educational courses to understand the basic trading concepts and specific cryptocurrencies you're interested in trading.
Selecting a reliable cryptocurrency exchange is critical. A good guideline is to opt for an exchange with a proven long-term track record, an excellent reputation, strong security protocols, and responsive customer support.
For newcomers, beginning with a centralized exchange is recommended. As you gain more experience in cryptocurrency trading, you can explore decentralized exchanges at a later stage."
Once you've chosen an exchange, the next step is to create your account. This usually involves providing your email, setting a password, and agreeing to terms. Sometimes, exchanges require identity verification to comply with regulatory standards. You would need to submit a government-issued ID, proof of residence, and any other documents to complete setting up your account.
A Beginner's Guide to Cryptocurrency Trading
After you create an account, you can deposit fiat currency into your account. Most centralized exchanges allow users to deposit fiat via bank transfers, bank wires, or other common money transfer methods.
If you happen to own some crypto already, you can deposit it into your exchange account. Remember to always send your coins to the associated address: send Bitcoin to your Bitcoin address, ether to your Ethereum address, and so on. Sending crypto to the wrong addresses could result in losses.
Now you’re set up for trading crypto, let’s quickly go through a few essential trading concepts for beginners.
1. Trading pairs
There are two main types of trading pairs: crypto-to-crypto trading pairs and crypto-to-fiat trading pairs.
Crypto-to-crypto trading pairs involve two different cryptocurrencies, such as the ETH/BTC trading pair. If the current value of one Ethereum (ETH) is 0.05 Bitcoin (BTC), this means you would need to exchange 0.05 BTC to acquire one ETH. The value of ETH is expressed in terms of BTC in this pairing.
Crypto-to-fiat trading pairs involve a cryptocurrency and a traditional fiat currency, such as the BTC/USD trading pair. If the current value of one Bitcoin (BTC) is $40,000 in US dollars (USD), this indicates that one Bitcoin is equivalent to $40,000.
2. Order books
An order book is a real-time, dynamic list of buy and sell orders placed by traders on a cryptocurrency exchange. It provides a snapshot of the supply and demand for a specific cryptocurrency at different price levels.
An order book is split into two main sections: the buy orders (bids) and the sell orders (asks). Buy orders list the orders from traders who want to buy the cryptocurrency at a certain price, organized from the highest bid price to the lowest.
Sell orders display the orders from traders who want to sell the cryptocurrency at a particular price, organized from the lowest ask price to the highest.
3. Market orders
A market order is the simplest type of order, in which you buy or sell crypto immediately at the best available price in the market. Let's say the current highest bid, or buy order, for one bitcoin is 35,000 dollars, while the lowest ask, or sell order, is 35,010 dollars in the order book. If you place a market order to buy bitcoins, your order would be matched with the lowest ask, which is 35,010 dollars. If you place a market order to sell bitcoin, your order would be matched with the highest bid at 35,000 dollars.
4. Limit orders
A limit order is an order to buy or sell a crypto at a specific price or better. For example, if you want to buy one bitcoin for $35,000 or less, you can set a buy limit order at $35,000. If the price drops to $35,000 or less, your limit order will be executed and you'll purchase bitcoin at that price. But if the price never drops to $35,000, your order won't be executed.
How To Use Crypto Wallets
A cryptocurrency wallet is a digital tool that enables you to store, send, and receive digital assets.
For beginners, a software wallet, often referred to as a hot wallet, is generally recommended. This type of wallet is user-friendly and easily accessible through desktop or mobile applications. It also offers a familiar and convenient user experience, and usually comes with customer support.
You can use hot wallets from crypto exchanges or download popular ones in the market, such as MetaMask. A hot wallet offers numerous benefits compared to your exchange account, including being able to do peer-to-peer transactions (without relying on an exchange) and exploring various decentralized finance (DeFi) services.
When using crypto wallets, it's essential to follow good security practices such as enabling two-factor authentication (2FA), using strong and unique passwords, and keeping backups of your recovery seed or private keys in a safe place.
As you become more comfortable with cryptocurrency, you can explore cold wallets that offer a different set of advantages and limitations.
Which Cryptocurrency You Should Buy?
As a beginner in the world of cryptocurrency trading, deciding which cryptocurrencies to buy can be daunting. Here are some tips.
Most people start with well-known and established cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH). These have a proven track record and are less risky options for beginners.
If you're considering exploring lesser-known cryptocurrencies, it's crucial to fully comprehend the associated risks, including the possibility of losing your entire investment.
Keep in mind that in the world of investing, risks and potential returns often go hand in hand. Taking on higher risks might lead to greater potential returns, although it also raises the likelihood of losing your invested capital.
Starting small is good for beginners, as this allows you to learn and gain experience without risking too much capital.
Lastly, a common mistake beginners should avoid is FOMO (Fear of Missing Out): Don’t rush into buying a cryptocurrency just because it's surging in price.
Different Types of Cryptocurrency Trading
There are many crypto trading strategies that you can employ, each with its own set of risks and rewards. Let’s go through some of the most popular crypto trading approaches.
Day trading
Day trading is a strategy that involves entering and exiting positions within the same day. Because cryptocurrency markets are open 24/7, day trading in cryptocurrency tends to refer to a trading style where the trader enters and exits positions within 24 hours.
In day trading, you’ll often rely on technical analysis to determine which assets to trade. Because profits in such a short period can be minimal, you may opt to trade across a wide range of assets to try and maximize your returns. That said, some might exclusively trade the same pair for years.
This style is a very active trading strategy. It can be highly profitable, but it carries with it a significant amount of risk.
Swing trading
In swing trading, you’re still trying to profit off market trends, but the time horizon is longer – positions are typically held anywhere from a couple of days to a couple of months.
Your goal will be to identify an asset that looks undervalued and is likely to increase in value. You would purchase this asset, then sell it when the price rises to generate a profit. Or you can try to find overvalued assets that are likely to decrease in value. Then, you could sell some of them at a high price, hoping to buy them back for a lower price.
Swing trading tends to be a more beginner-friendly strategy, mainly because it doesn’t come with the stress of fast-paced day trading.
Position trading (trend trading)
Position trading is a long-term strategy. Traders purchase assets to hold for extended periods (generally measured in months). Their goal is to make a profit by selling those assets at a higher price in the future.
Position traders are concerned with trends that can be observed over extended periods – they’ll try to profit from the overall market direction. Swing traders, on the other hand, typically seek to predict “swings” in the market that don’t necessarily correlate with the broader trend.
Like swing trading, position trading is an ideal strategy for beginners. Once again, the long time horizon gives them ample opportunity to deliberate on their decisions.
Scalping
Of all of the trading strategies discussed so far, scalping takes place across the smallest time frames. Scalpers attempt to game small fluctuations in price, often entering and exiting positions within minutes (or even seconds).
In most cases, they’ll use technical analysis to try and predict price movements and exploit bid-ask spreads or other inefficiencies to make a profit. Due to the short time frames, scalping usually has thin profit margins. Scalpers generally trade large amounts of assets in order to achieve sizable profits.
Scalping is generally more suitable for experienced traders. For beginner traders who know what they’re doing, however, identifying the right patterns and taking advantage of short-term fluctuations can be highly profitable.
HODLing
Long-term investors, also known as "HODLers," aim to benefit from the overall growth of the cryptocurrency market. They buy and hold cryptocurrencies for an extended period, often months or years.
HODLing is ideal for those who believe in the long-term potential of specific cryptocurrencies such as Bitcoin or Ethereum and are willing to weather short-term price fluctuations. While this strategy requires patience, it may provide substantial returns over time.
Technical Analysis and Chart Reading in Cryptocurrency Trading
Technical analysis is the art of interpreting price charts, recognizing patterns, and harnessing indicators to anticipate potential price movements. They are useful analytical tools that can greatly enhance your ability to make well-informed trading decisions.
1. What is a candlestick chart?
A candlestick chart is a graphical representation of the price of an asset for a given timeframe. It’s made up of candlesticks, each representing the same amount of time.
For example, a 1-hour chart shows candlesticks that each represent a period of one hour. A 1-day chart shows candlesticks that each represent a period of one day, and so on.
Daily chart of Bitcoin. Each candlestick represents one day of trading.
A candlestick is made up of four data points: the Open, High, Low, and Close (also referred to as the OHLC values). The Open and Close are the first and last recorded price for the given timeframe, while the Low and High are the lowest and highest recorded price, respectively.
2. What is a candlestick chart pattern?
A candlestick chart pattern is a visual representation of price movements in the form of candlesticks. It provides insights into the open, close, high, and low prices of a cryptocurrency or financial asset over a specific time period.
A candlestick consists of two main parts: the body and the wicks (also known as shadows). The body represents the price range between the opening and closing prices of the trading session.
If the closing price is higher than the opening price, the body is typically filled or colored in, often with green or white, to indicate a bullish session. Conversely, if the opening price is higher than the closing price, the body is empty or colored in red or black, signaling a bearish session.
The wicks, which extend from the top and bottom of the body, represent the price range between the highest and lowest prices reached during the trading session. The upper wick extends from the top of the body and indicates the session's highest price, while the lower wick extends from the bottom of the body and signifies the lowest price.
Candlestick charts offer valuable insights into market sentiment and price trends. Traders use patterns formed by multiple candlesticks to identify potential trend reversals or continuations. Common patterns include "Doji," "Hammer," "Shooting Star," and "Engulfing," each with its own implications for price movements.
3. What is a trend line?
Trend lines are a widely used tool by both traders and technical analysts. They are lines that connect certain data points on a chart.
The main idea behind drawing trend lines is to visualize certain aspects of the price action. This way, traders can identify the overall trend and market structure.
The price of Bitcoin touching a trend line multiple times, indicating an uptrend.
Some traders may only use trend lines to get a better understanding of the market structure. Others may use them to create actionable trade ideas based on how the trend lines interact with the price.
Trend lines can be applied to a chart showing virtually any time frame. However, as with any other market analysis tool, trend lines on higher time frames tend to be more reliable than trend lines on lower time frames.
Another aspect to consider here is the strength of a trend line. The conventional definition of a trend line defines that it has to touch the price at least two or three times to become valid. Typically, the more times the price has touched (tested) a trend line, the more reliable it may be considered.
4. What are support and resistance?
Support means a level where the price finds a “floor.” In other words, a support level is an area of significant demand, where buyers step in and push the price up.
Resistance means a level where the price finds a “ceiling.” A resistance level is an area of significant supply, where sellers step in and push the price down.
Support level (red) is tested and broken, turning into resistance.
Technical indicators, such as trend lines, moving averages, Bollinger Bands, Ichimoku Clouds, and Fibonacci Retracement can also suggest potential support and resistance levels.
Fundamental Analysis: Determining Intrinsic Value of Cryptocurrencies
Fundamental analysis involves a deep dive into the intrinsic value of a cryptocurrency project, examining its technology, team, adoption potential, and overall viability.
Generally, you should try to understand the underlying technology of a cryptocurrency project. Delve into its blockchain architecture, consensus mechanism, and scalability. A robust and innovative technology can indicate a project's ability to solve real-world problems and gain adoption.
You should also research the team behind the cryptocurrency project. Evaluate their expertise, experience, and track record. A talented and experienced team increases the likelihood of successful project execution.
A cryptocurrency’s tokenomics are of paramount importance, as they determine the cryptocurrency’s total supply, distribution, and its incentive mechanisms. These are factors that often have a direct impact on the cryptocurrency’s price movements.
Fundamental analysts also look into the project's adoption potential in the real world. Factors such as partnerships, use cases, community engagement, and market demand could also influence prices.
Fundamental analysis equips yourself with the tools to assess a cryptocurrency project's underlying value. This strategic approach enables you to navigate the complex cryptocurrency landscape with a long-term perspective, making trading decisions that align with a project's viability and potential.
Risk Management in Cryptocurrency Trading
Effective risk management is essential for your crypto trading success.
Risk management refers to predicting and identifying the financial risks involved with your investments, and minimizing them by employing a set of strategies.
There are numerous risks in cryptocurrency trading, including regulatory risk, market risk, operational risk, liquidity risk, and security risk. Fortunately, there are risk management strategies you can employ to help keep your risk exposure at a reasonable level. Let’s look at a few popular strategies.
1. Diversification
Diversifying your portfolio is one of the most popular fundamental tools to reduce your overall investment risk. You can hold a variety of different coins and tokens, keep each position at an appropriate size and constantly rebalance the portfolio, so you won't be too heavily invested in any one asset. This can minimize the chance of oversized losses.
2. Hedging
You can also hedge your holdings, which means taking a position in a related asset that is expected to move in the opposite direction of the primary position. The purpose is to offset potential losses.
If you own $10,000 worth of Bitcoin and want to hedge against a possible decrease in its price, you could buy a put option for a premium of $500 that gives you the right to sell bitcoin at $50,000 at a future date. If Bitcoin's price falls to $40,000, you can exercise your option and sell your bitcoin for $50,000, significantly reducing your losses.
3. Use advanced order types
You can utilize advanced order types to lock in profits or protect yourself from losses. For instance, stop-loss orders allow traders to limit losses when a trade goes wrong. Take-profit orders ensure that you lock in profits when a trade goes well.
4. Follow the 1% rule
Another strategy you can follow is the 1% rule, where you don’t risk any amount more than 1% of your total capital on a single position. For instance, if you have $10,000 to invest and want to adhere to the 1% rule, you could buy $10,000 of Bitcoin and set a stop-loss order to sell at $9,900. This way, you would limit your losses to 1% of your total investment capital.
5. Have an exit strategy
It’s always a good idea to plan for the worst. So having an exit strategy is an essential way to manage your risks. It's easy for us to get caught up in a bull market and its euphoria, but having a plan to exit your position can help lock in gains.
One way is to use limit orders to take profit or place a floor on maximum loss that you can stand. As a general rule of thumb, once you have your exit plan, you should stick to it.
6. Do Your Own Research (DYOR)
It's essential to emphasize the importance of "Do Your Own Research!" This principle is so vital within the crypto community that it's commonly referred to by its acronym, D-Y-O-R. Before investing in a token, coin, project, or other asset, you must do your due diligence. It's key that you assess essential information about an asset to fully understand its risks. If you want to invest in an ICO, ensure you read the white paper and understand the tokenomics, roadmap, and communities before you make the jump!
In summary, investing in crypto can be risky, but there are many ways you can manage those risks effectively.
Closing Thoughts
Congratulations on completing this comprehensive guide to cryptocurrency trading for beginners! You should be better prepared to begin your crypto trading journey, equipped with essential knowledge and tools to navigate this exciting landscape.
As you venture into the realm of cryptocurrency trading, remember that learning is an ongoing process. Markets can be unpredictable, and cryptocurrency markets are particularly volatile. With continued learning, however, you are well on your way to become a better crypto trader with each practical trading experience you gain.
Always prioritize research, education, and risk management in your trading journey. Stay informed about the latest developments in the crypto space, continue refining your skills, and adapt your strategies as needed.
Disclaimer and Risk Warning: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.
Cryptocurrency trading, or the buying and selling of digital assets like Bitcoin and Ethereum, has emerged as a dynamic and potentially lucrative endeavor.For beginners, it’s essential to understand what makes cryptocurrency unique, familiarize yourself with common trading concepts such as order books, trading pairs, and order types, and become comfortable with technical analysis charts and tools.This comprehensive guide will teach beginners all this foundational knowledge and prepare you to embark on your crypto trading journey.
What Is Cryptocurrency Trading?
Cryptocurrency trading, or the buying and selling of digital assets like Bitcoin (BTC) and Ethereum (ETH), has emerged as a dynamic and potentially lucrative endeavor. As cryptocurrencies continue to captivate global interest and more institutional investors join the sector, cryptocurrency trading is gaining increasing popularity.
Cryptocurrency trading often aims to capitalize on price fluctuations. Traders aim to buy these cryptocurrencies when prices are low and sell when prices surge, effectively profiting from the market's volatility. This fast-paced landscape presents both opportunities and challenges for beginners.
For those intrigued by the prospect of engaging in cryptocurrency trading, a comprehensive understanding of the market's intricacies is paramount. This guide aims to equip beginners with the foundational knowledge necessary to navigate this potentially rewarding landscape.
What Are Cryptocurrencies?
Cryptocurrencies have taken the financial world by storm, redefining how we perceive money and transactions.
Cryptocurrencies, like Bitcoin and Ethereum, are digital currencies that employ an innovative technology known as blockchain to ensure their security and integrity.
Unlike regular money from banks, cryptocurrencies aren't controlled by any one big company or government. Instead, cryptocurrencies are like public digital record books that anyone around the world can see and keep a copy of.
As a result, cryptocurrencies are global, secure, and transparent. You can generally send and receive these coins to anyone in the world, at a faster speed without extra fees or paperwork required by banks.
People often say that cryptocurrencies are decentralized, which is another way of saying that they are not controlled by a centralized entity. Essentially, you own your own digital wallet that gives you more freedom and control over your money.
How to Start Trading Cryptocurrency
Getting started with cryptocurrency trading requires a thoughtful approach and careful preparation.
Before diving into the world of cryptocurrency trading, it's crucial to invest time in learning. You can rely on Binance Academy’s educational courses to understand the basic trading concepts and specific cryptocurrencies you're interested in trading.
Selecting a reliable cryptocurrency exchange is critical. A good guideline is to opt for an exchange with a proven long-term track record, an excellent reputation, strong security protocols, and responsive customer support.
For newcomers, beginning with a centralized exchange is recommended. As you gain more experience in cryptocurrency trading, you can explore decentralized exchanges at a later stage."
Once you've chosen an exchange, the next step is to create your account. This usually involves providing your email, setting a password, and agreeing to terms. Sometimes, exchanges require identity verification to comply with regulatory standards. You would need to submit a government-issued ID, proof of residence, and any other documents to complete setting up your account.
A Beginner's Guide to Cryptocurrency Trading
After you create an account, you can deposit fiat currency into your account. Most centralized exchanges allow users to deposit fiat via bank transfers, bank wires, or other common money transfer methods.
If you happen to own some crypto already, you can deposit it into your exchange account. Remember to always send your coins to the associated address: send Bitcoin to your Bitcoin address, ether to your Ethereum address, and so on. Sending crypto to the wrong addresses could result in losses.
Now you’re set up for trading crypto, let’s quickly go through a few essential trading concepts for beginners.
1. Trading pairs
There are two main types of trading pairs: crypto-to-crypto trading pairs and crypto-to-fiat trading pairs.
Crypto-to-crypto trading pairs involve two different cryptocurrencies, such as the ETH/BTC trading pair. If the current value of one Ethereum (ETH) is 0.05 Bitcoin (BTC), this means you would need to exchange 0.05 BTC to acquire one ETH. The value of ETH is expressed in terms of BTC in this pairing.
Crypto-to-fiat trading pairs involve a cryptocurrency and a traditional fiat currency, such as the BTC/USD trading pair. If the current value of one Bitcoin (BTC) is $40,000 in US dollars (USD), this indicates that one Bitcoin is equivalent to $40,000.
2. Order books
An order book is a real-time, dynamic list of buy and sell orders placed by traders on a cryptocurrency exchange. It provides a snapshot of the supply and demand for a specific cryptocurrency at different price levels.
An order book is split into two main sections: the buy orders (bids) and the sell orders (asks). Buy orders list the orders from traders who want to buy the cryptocurrency at a certain price, organized from the highest bid price to the lowest.
Sell orders display the orders from traders who want to sell the cryptocurrency at a particular price, organized from the lowest ask price to the highest.
3. Market orders
A market order is the simplest type of order, in which you buy or sell crypto immediately at the best available price in the market. Let's say the current highest bid, or buy order, for one bitcoin is 35,000 dollars, while the lowest ask, or sell order, is 35,010 dollars in the order book. If you place a market order to buy bitcoins, your order would be matched with the lowest ask, which is 35,010 dollars. If you place a market order to sell bitcoin, your order would be matched with the highest bid at 35,000 dollars.
4. Limit orders
A limit order is an order to buy or sell a crypto at a specific price or better. For example, if you want to buy one bitcoin for $35,000 or less, you can set a buy limit order at $35,000. If the price drops to $35,000 or less, your limit order will be executed and you'll purchase bitcoin at that price. But if the price never drops to $35,000, your order won't be executed.
How To Use Crypto Wallets
A cryptocurrency wallet is a digital tool that enables you to store, send, and receive digital assets.
For beginners, a software wallet, often referred to as a hot wallet, is generally recommended. This type of wallet is user-friendly and easily accessible through desktop or mobile applications. It also offers a familiar and convenient user experience, and usually comes with customer support.
You can use hot wallets from crypto exchanges or download popular ones in the market, such as MetaMask. A hot wallet offers numerous benefits compared to your exchange account, including being able to do peer-to-peer transactions (without relying on an exchange) and exploring various decentralized finance (DeFi) services.
When using crypto wallets, it's essential to follow good security practices such as enabling two-factor authentication (2FA), using strong and unique passwords, and keeping backups of your recovery seed or private keys in a safe place.
As you become more comfortable with cryptocurrency, you can explore cold wallets that offer a different set of advantages and limitations.
Which Cryptocurrency You Should Buy?
As a beginner in the world of cryptocurrency trading, deciding which cryptocurrencies to buy can be daunting. Here are some tips.
Most people start with well-known and established cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH). These have a proven track record and are less risky options for beginners.
If you're considering exploring lesser-known cryptocurrencies, it's crucial to fully comprehend the associated risks, including the possibility of losing your entire investment.
Keep in mind that in the world of investing, risks and potential returns often go hand in hand. Taking on higher risks might lead to greater potential returns, although it also raises the likelihood of losing your invested capital.
Starting small is good for beginners, as this allows you to learn and gain experience without risking too much capital.
Lastly, a common mistake beginners should avoid is FOMO (Fear of Missing Out): Don’t rush into buying a cryptocurrency just because it's surging in price.
Different Types of Cryptocurrency Trading
There are many crypto trading strategies that you can employ, each with its own set of risks and rewards. Let’s go through some of the most popular crypto trading approaches.
Day trading
Day trading is a strategy that involves entering and exiting positions within the same day. Because cryptocurrency markets are open 24/7, day trading in cryptocurrency tends to refer to a trading style where the trader enters and exits positions within 24 hours.
In day trading, you’ll often rely on technical analysis to determine which assets to trade. Because profits in such a short period can be minimal, you may opt to trade across a wide range of assets to try and maximize your returns. That said, some might exclusively trade the same pair for years.
This style is a very active trading strategy. It can be highly profitable, but it carries with it a significant amount of risk.
Swing trading
In swing trading, you’re still trying to profit off market trends, but the time horizon is longer – positions are typically held anywhere from a couple of days to a couple of months.
Your goal will be to identify an asset that looks undervalued and is likely to increase in value. You would purchase this asset, then sell it when the price rises to generate a profit. Or you can try to find overvalued assets that are likely to decrease in value. Then, you could sell some of them at a high price, hoping to buy them back for a lower price.
Swing trading tends to be a more beginner-friendly strategy, mainly because it doesn’t come with the stress of fast-paced day trading.
Position trading (trend trading)
Position trading is a long-term strategy. Traders purchase assets to hold for extended periods (generally measured in months). Their goal is to make a profit by selling those assets at a higher price in the future.
Position traders are concerned with trends that can be observed over extended periods – they’ll try to profit from the overall market direction. Swing traders, on the other hand, typically seek to predict “swings” in the market that don’t necessarily correlate with the broader trend.
Like swing trading, position trading is an ideal strategy for beginners. Once again, the long time horizon gives them ample opportunity to deliberate on their decisions.
Scalping
Of all of the trading strategies discussed so far, scalping takes place across the smallest time frames. Scalpers attempt to game small fluctuations in price, often entering and exiting positions within minutes (or even seconds).
In most cases, they’ll use technical analysis to try and predict price movements and exploit bid-ask spreads or other inefficiencies to make a profit. Due to the short time frames, scalping usually has thin profit margins. Scalpers generally trade large amounts of assets in order to achieve sizable profits.
Scalping is generally more suitable for experienced traders. For beginner traders who know what they’re doing, however, identifying the right patterns and taking advantage of short-term fluctuations can be highly profitable.
HODLing
Long-term investors, also known as "HODLers," aim to benefit from the overall growth of the cryptocurrency market. They buy and hold cryptocurrencies for an extended period, often months or years.
HODLing is ideal for those who believe in the long-term potential of specific cryptocurrencies such as Bitcoin or Ethereum and are willing to weather short-term price fluctuations. While this strategy requires patience, it may provide substantial returns over time.
Technical Analysis and Chart Reading in Cryptocurrency Trading
Technical analysis is the art of interpreting price charts, recognizing patterns, and harnessing indicators to anticipate potential price movements. They are useful analytical tools that can greatly enhance your ability to make well-informed trading decisions.
1. What is a candlestick chart?
A candlestick chart is a graphical representation of the price of an asset for a given timeframe. It’s made up of candlesticks, each representing the same amount of time.
For example, a 1-hour chart shows candlesticks that each represent a period of one hour. A 1-day chart shows candlesticks that each represent a period of one day, and so on.
Daily chart of Bitcoin. Each candlestick represents one day of trading.
A candlestick is made up of four data points: the Open, High, Low, and Close (also referred to as the OHLC values). The Open and Close are the first and last recorded price for the given timeframe, while the Low and High are the lowest and highest recorded price, respectively.
2. What is a candlestick chart pattern?
A candlestick chart pattern is a visual representation of price movements in the form of candlesticks. It provides insights into the open, close, high, and low prices of a cryptocurrency or financial asset over a specific time period.
A candlestick consists of two main parts: the body and the wicks (also known as shadows). The body represents the price range between the opening and closing prices of the trading session.
If the closing price is higher than the opening price, the body is typically filled or colored in, often with green or white, to indicate a bullish session. Conversely, if the opening price is higher than the closing price, the body is empty or colored in red or black, signaling a bearish session.
The wicks, which extend from the top and bottom of the body, represent the price range between the highest and lowest prices reached during the trading session. The upper wick extends from the top of the body and indicates the session's highest price, while the lower wick extends from the bottom of the body and signifies the lowest price.
Candlestick charts offer valuable insights into market sentiment and price trends. Traders use patterns formed by multiple candlesticks to identify potential trend reversals or continuations. Common patterns include "Doji," "Hammer," "Shooting Star," and "Engulfing," each with its own implications for price movements.
3. What is a trend line?
Trend lines are a widely used tool by both traders and technical analysts. They are lines that connect certain data points on a chart.
The main idea behind drawing trend lines is to visualize certain aspects of the price action. This way, traders can identify the overall trend and market structure.
The price of Bitcoin touching a trend line multiple times, indicating an uptrend.
Some traders may only use trend lines to get a better understanding of the market structure. Others may use them to create actionable trade ideas based on how the trend lines interact with the price.
Trend lines can be applied to a chart showing virtually any time frame. However, as with any other market analysis tool, trend lines on higher time frames tend to be more reliable than trend lines on lower time frames.
Another aspect to consider here is the strength of a trend line. The conventional definition of a trend line defines that it has to touch the price at least two or three times to become valid. Typically, the more times the price has touched (tested) a trend line, the more reliable it may be considered.
4. What are support and resistance?
Support means a level where the price finds a “floor.” In other words, a support level is an area of significant demand, where buyers step in and push the price up.
Resistance means a level where the price finds a “ceiling.” A resistance level is an area of significant supply, where sellers step in and push the price down.
Support level (red) is tested and broken, turning into resistance.
Technical indicators, such as trend lines, moving averages, Bollinger Bands, Ichimoku Clouds, and Fibonacci Retracement can also suggest potential support and resistance levels.
Fundamental Analysis: Determining Intrinsic Value of Cryptocurrencies
Fundamental analysis involves a deep dive into the intrinsic value of a cryptocurrency project, examining its technology, team, adoption potential, and overall viability.
Generally, you should try to understand the underlying technology of a cryptocurrency project. Delve into its blockchain architecture, consensus mechanism, and scalability. A robust and innovative technology can indicate a project's ability to solve real-world problems and gain adoption.
You should also research the team behind the cryptocurrency project. Evaluate their expertise, experience, and track record. A talented and experienced team increases the likelihood of successful project execution.
A cryptocurrency’s tokenomics are of paramount importance, as they determine the cryptocurrency’s total supply, distribution, and its incentive mechanisms. These are factors that often have a direct impact on the cryptocurrency’s price movements.
Fundamental analysts also look into the project's adoption potential in the real world. Factors such as partnerships, use cases, community engagement, and market demand could also influence prices.
Fundamental analysis equips yourself with the tools to assess a cryptocurrency project's underlying value. This strategic approach enables you to navigate the complex cryptocurrency landscape with a long-term perspective, making trading decisions that align with a project's viability and potential.
Risk Management in Cryptocurrency Trading
Effective risk management is essential for your crypto trading success.
Risk management refers to predicting and identifying the financial risks involved with your investments, and minimizing them by employing a set of strategies.
There are numerous risks in cryptocurrency trading, including regulatory risk, market risk, operational risk, liquidity risk, and security risk. Fortunately, there are risk management strategies you can employ to help keep your risk exposure at a reasonable level. Let’s look at a few popular strategies.
1. Diversification
Diversifying your portfolio is one of the most popular fundamental tools to reduce your overall investment risk. You can hold a variety of different coins and tokens, keep each position at an appropriate size and constantly rebalance the portfolio, so you won't be too heavily invested in any one asset. This can minimize the chance of oversized losses.
2. Hedging
You can also hedge your holdings, which means taking a position in a related asset that is expected to move in the opposite direction of the primary position. The purpose is to offset potential losses.
If you own $10,000 worth of Bitcoin and want to hedge against a possible decrease in its price, you could buy a put option for a premium of $500 that gives you the right to sell bitcoin at $50,000 at a future date. If Bitcoin's price falls to $40,000, you can exercise your option and sell your bitcoin for $50,000, significantly reducing your losses.
3. Use advanced order types
You can utilize advanced order types to lock in profits or protect yourself from losses. For instance, stop-loss orders allow traders to limit losses when a trade goes wrong. Take-profit orders ensure that you lock in profits when a trade goes well.
4. Follow the 1% rule
Another strategy you can follow is the 1% rule, where you don’t risk any amount more than 1% of your total capital on a single position. For instance, if you have $10,000 to invest and want to adhere to the 1% rule, you could buy $10,000 of Bitcoin and set a stop-loss order to sell at $9,900. This way, you would limit your losses to 1% of your total investment capital.
5. Have an exit strategy
It’s always a good idea to plan for the worst. So having an exit strategy is an essential way to manage your risks. It's easy for us to get caught up in a bull market and its euphoria, but having a plan to exit your position can help lock in gains.
One way is to use limit orders to take profit or place a floor on maximum loss that you can stand. As a general rule of thumb, once you have your exit plan, you should stick to it.
6. Do Your Own Research (DYOR)
It's essential to emphasize the importance of "Do Your Own Research!" This principle is so vital within the crypto community that it's commonly referred to by its acronym, D-Y-O-R. Before investing in a token, coin, project, or other asset, you must do your due diligence. It's key that you assess essential information about an asset to fully understand its risks. If you want to invest in an ICO, ensure you read the white paper and understand the tokenomics, roadmap, and communities before you make the jump!
In summary, investing in crypto can be risky, but there are many ways you can manage those risks effectively.
Closing Thoughts
Congratulations on completing this comprehensive guide to cryptocurrency trading for beginners! You should be better prepared to begin your crypto trading journey, equipped with essential knowledge and tools to navigate this exciting landscape.
As you venture into the realm of cryptocurrency trading, remember that learning is an ongoing process. Markets can be unpredictable, and cryptocurrency markets are particularly volatile. With continued learning, however, you are well on your way to become a better crypto trader with each practical trading experience you gain.
Always prioritize research, education, and risk management in your trading journey. Stay informed about the latest developments in the crypto space, continue refining your skills, and adapt your strategies as needed.
Disclaimer and Risk Warning: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.
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Common Scams on Mobile Devices
Community Submission - Author: WhoTookMyCrypto.com
2017 was a remarkable year for the cryptocurrency industry as their rapid increase in valuations propelled them into mainstream media. Unsurprisingly, this garnered them immense interest from both the general public as well as cybercriminals. The relative anonymity offered by cryptocurrencies has made them a favorite amongst criminals who often use them to bypass traditional banking systems and avoid financial surveillance from regulators.
Given that people are spending more time on their smartphones than desktops, it is thus not surprising that cybercriminals have also turned their attention to them. The following discussion highlights how scammers have been targeting cryptocurrency users through their mobile devices, along with a few steps that users can take to protect themselves.
Fake cryptocurrency apps
Fake cryptocurrency exchange apps
The most well-known example of a fake cryptocurrency exchange app is probably the one of Poloniex. Prior to the launch of their official mobile trading app in July 2018, Google Play was already listing several fake Poloniex exchange apps, which were intentionally designed to be functional. Many users that downloaded those fraudulent apps had their Poloniex login credentials compromised, and their cryptocurrencies were stolen. Some apps even went a step further requesting the login credentials of users Gmail accounts. It is important to highlight that only accounts without two-factor authentication (2FA) were compromised.
The following steps can help protect you against such scams.
Check the exchange’s official website to verify if they indeed offer a mobile trading app. If so, use the link provided on their website.
Read the reviews and ratings. Fraudulent apps often have many bad reviews with people complaining about getting scammed, so make sure to check them before you download. However, you should also be skeptical of apps that present perfect ratings and comments. Any legitimate app has its fair share of negative reviews.
Check the app developer information. Look for whether a legitimate company, email address, and website are provided. You should also perform an online search on the information provided to see if they are really related to the official exchange.
Check the number of downloads. The download count should also be considered. It is unlikely that a highly popular cryptocurrency exchange would have a small number of downloads.
Activate 2FA on your accounts. Although not 100% secure, 2FA is much harder to bypass and can make a huge difference in protecting your funds, even if your login credentials are phished.
Fake cryptocurrency wallet apps
There are many different types of fake apps. One variation seeks to obtain personal information from users such as their wallet passwords and private keys.
In some cases, fake apps provide previously generated public addresses to users. So they assume funds are to be deposited into these addresses. However, they do not gain access to the private keys and thus do not have access to any funds that are sent to them.
Such fake wallets have been created for popular cryptocurrencies such as Ethereum and Neo and, unfortunately, many users lost their funds. Here are some preventive steps that can be taken to avoid becoming a victim:
The precautions highlighted in the exchange app segment above are equally applicable. However, an additional precaution you can take when dealing with wallet apps is to make sure brand new addresses are generated when you first open the app, and that you are in possession of the private keys (or mnemonic seeds). A legitimate wallet app allows you to export the private keys, but it is also important to ensure the generation of new key pairs is not compromised. So you should use a reputable software (preferably open source).
Even if the app provides you a private key (or seed), you should verify whether the public addresses can be derived and accessed from them. For example, some Bitcoin wallets allow users to import their private keys or seeds to visualize the addresses and access the funds. To minimize the risks of keys and seeds being compromised, you may perform this on an air-gapped computer (disconnected from the internet).
Cryptojacking apps
Cryptojacking has been a hot favorite amongst cybercriminals due to the low barriers to entry and low overheads required. Furthermore, it offers them the potential for long-term recurring income. Despite their lower processing power when compared to PCs, mobile devices are increasingly becoming a target of cryptojacking.
Apart from web-browser cryptojacking, cybercriminals are also developing programs that appear to be legitimate gaming, utility or educational apps. However, many of these apps are designed to secretly run crypto-mining scripts in the background.
There are also cryptojacking apps that are advertised as legitimate third-party miners, but the rewards are delivered to the app developer instead of the users.
To make things worse, cybercriminals have become increasingly sophisticated, deploying lightweight mining algorithms to avoid detection.
Cryptojacking is incredibly harmful to your mobile devices as they degrade performance and accelerates wear and tear. Even worse, they could potentially act as Trojan horses for more nefarious malware.
The following steps can be taken to guard against them.
Only download apps from official stores, such as Google Play. Pirated apps are not pre-scanned and are more likely to contain cryptojacking scripts.
Monitor your phone for excessive battery draining or overheating. Once detected, terminate apps that are causing this.
Keep your device and apps updated so that security vulnerabilities get patched.
Use a web browser that guards against cryptojacking or install reputable browser plug-ins, such as MinerBlock, NoCoin, and Adblock.
If possible, install mobile antivirus software and keep it updated.
Free giveaway and fake crypto-miner apps
These are apps that pretend to mine cryptocurrencies for their users but don’t actually do anything apart from displaying ads. They incentivize users to keep the apps open by reflecting an increase in the user’s rewards over time. Some apps even incentivize users to leave 5-star ratings in order to get rewards. Of course, none of these apps were actually mining, and their users never received any rewards.
To guard against this scam, understand that for the majority of cryptocurrencies, mining requires highly specialized hardware (ASICs), meaning it is not feasible to mine on a mobile device. Whatever amounts you mine would be trivial at best. Stay away from any such apps.
Clipper apps
Such apps alter the cryptocurrency addresses you copy and replace them with those of the attacker. Thus, while a victim may copy the correct recipient address, the one they paste to process the transaction is replaced by those of the attacker.
To avoid falling victim to such apps, here are some precautions you can take when processing transactions.
Always double and triple check the address you are pasting into the recipient field. Blockchain transactions are irreversible so you should always be careful.
It is best to verify the entire address instead of just portions of it. Some apps are intelligent enough to paste addresses that look similar to your intended address.
SIM swapping
In a SIM swapping scam, a cybercriminal gains access to the phone number of a user. They do this by employing social engineering techniques to trick mobile phone operators into issuing a new SIM card to them. The most well-known SIM swapping scam involved cryptocurrency entrepreneur Michael Terpin. He alleged that AT&T was negligent in their handling of his mobile phone credentials resulting in him losing tokens valued at more than 20 million US dollars.
Once cybercriminals have gained access to your phone number, they can use it to bypass any 2FA that relies on that. From there, they can work their way into your cryptocurrency wallets and exchanges.
Another method cybercriminals can employ is to monitor your SMS communications. Flaws in communications networks can allow criminals to intercept your messages which can include the second-factor pin messaged to you.
What makes this attack particularly concerning is that users are not required to undertake any action, such as downloading a fake software or clicking a malicious link.
To prevent falling prey to such scams, here are some steps to consider.
Do not use your mobile phone number for SMS 2FA. Instead, use apps like Google Authenticator or Authy to secure your accounts. Cybercriminals are unable to gain access to these apps even if they possess your phone number. Alternatively, you may use hardware 2FA such as YubiKey or Google's Titan Security Key.
Do not reveal personal identifying information on social media, such as your mobile phone number. Cybercriminals can pick up such information and use them to impersonate you elsewhere.
You should never announce on social media that you own cryptocurrencies as this would make you a target. Or if you are in a position where everyone already knows you own them, then avoid disclosing personal information including the exchanges or wallets you use.
Make arrangements with your mobile phone providers to protect your account. This could mean attaching a pin or password to your account and dictating that only users with knowledge of the pin can make changes to the account. Alternatively, you can require such changes to be made in person and disallow them over the phone.
WiFi
Cybercriminals are constantly seeking entry points into mobile devices, especially the ones of cryptocurrency users. One such entry point is that of WiFi access. Public WiFi is insecure and users should take precautions before connecting to them. If not, they risk cybercriminals gaining access to the data on their mobile devices. These precautions have been covered in the article on public WiFi.
Closing thoughts
Mobile phones have become an essential part of our lives. In fact, they are so intertwined with your digital identity that they can become your greatest vulnerability. Cybercriminals are aware of this and will continue to find ways to exploit this. Securing your mobile devices is no longer optional. It has become a necessity. Stay safe.
2017 was a remarkable year for the cryptocurrency industry as their rapid increase in valuations propelled them into mainstream media. Unsurprisingly, this garnered them immense interest from both the general public as well as cybercriminals. The relative anonymity offered by cryptocurrencies has made them a favorite amongst criminals who often use them to bypass traditional banking systems and avoid financial surveillance from regulators.
Given that people are spending more time on their smartphones than desktops, it is thus not surprising that cybercriminals have also turned their attention to them. The following discussion highlights how scammers have been targeting cryptocurrency users through their mobile devices, along with a few steps that users can take to protect themselves.
Fake cryptocurrency apps
Fake cryptocurrency exchange apps
The most well-known example of a fake cryptocurrency exchange app is probably the one of Poloniex. Prior to the launch of their official mobile trading app in July 2018, Google Play was already listing several fake Poloniex exchange apps, which were intentionally designed to be functional. Many users that downloaded those fraudulent apps had their Poloniex login credentials compromised, and their cryptocurrencies were stolen. Some apps even went a step further requesting the login credentials of users Gmail accounts. It is important to highlight that only accounts without two-factor authentication (2FA) were compromised.
The following steps can help protect you against such scams.
Check the exchange’s official website to verify if they indeed offer a mobile trading app. If so, use the link provided on their website.
Read the reviews and ratings. Fraudulent apps often have many bad reviews with people complaining about getting scammed, so make sure to check them before you download. However, you should also be skeptical of apps that present perfect ratings and comments. Any legitimate app has its fair share of negative reviews.
Check the app developer information. Look for whether a legitimate company, email address, and website are provided. You should also perform an online search on the information provided to see if they are really related to the official exchange.
Check the number of downloads. The download count should also be considered. It is unlikely that a highly popular cryptocurrency exchange would have a small number of downloads.
Activate 2FA on your accounts. Although not 100% secure, 2FA is much harder to bypass and can make a huge difference in protecting your funds, even if your login credentials are phished.
Fake cryptocurrency wallet apps
There are many different types of fake apps. One variation seeks to obtain personal information from users such as their wallet passwords and private keys.
In some cases, fake apps provide previously generated public addresses to users. So they assume funds are to be deposited into these addresses. However, they do not gain access to the private keys and thus do not have access to any funds that are sent to them.
Such fake wallets have been created for popular cryptocurrencies such as Ethereum and Neo and, unfortunately, many users lost their funds. Here are some preventive steps that can be taken to avoid becoming a victim:
The precautions highlighted in the exchange app segment above are equally applicable. However, an additional precaution you can take when dealing with wallet apps is to make sure brand new addresses are generated when you first open the app, and that you are in possession of the private keys (or mnemonic seeds). A legitimate wallet app allows you to export the private keys, but it is also important to ensure the generation of new key pairs is not compromised. So you should use a reputable software (preferably open source).
Even if the app provides you a private key (or seed), you should verify whether the public addresses can be derived and accessed from them. For example, some Bitcoin wallets allow users to import their private keys or seeds to visualize the addresses and access the funds. To minimize the risks of keys and seeds being compromised, you may perform this on an air-gapped computer (disconnected from the internet).
Cryptojacking apps
Cryptojacking has been a hot favorite amongst cybercriminals due to the low barriers to entry and low overheads required. Furthermore, it offers them the potential for long-term recurring income. Despite their lower processing power when compared to PCs, mobile devices are increasingly becoming a target of cryptojacking.
Apart from web-browser cryptojacking, cybercriminals are also developing programs that appear to be legitimate gaming, utility or educational apps. However, many of these apps are designed to secretly run crypto-mining scripts in the background.
There are also cryptojacking apps that are advertised as legitimate third-party miners, but the rewards are delivered to the app developer instead of the users.
To make things worse, cybercriminals have become increasingly sophisticated, deploying lightweight mining algorithms to avoid detection.
Cryptojacking is incredibly harmful to your mobile devices as they degrade performance and accelerates wear and tear. Even worse, they could potentially act as Trojan horses for more nefarious malware.
The following steps can be taken to guard against them.
Only download apps from official stores, such as Google Play. Pirated apps are not pre-scanned and are more likely to contain cryptojacking scripts.
Monitor your phone for excessive battery draining or overheating. Once detected, terminate apps that are causing this.
Keep your device and apps updated so that security vulnerabilities get patched.
Use a web browser that guards against cryptojacking or install reputable browser plug-ins, such as MinerBlock, NoCoin, and Adblock.
If possible, install mobile antivirus software and keep it updated.
Free giveaway and fake crypto-miner apps
These are apps that pretend to mine cryptocurrencies for their users but don’t actually do anything apart from displaying ads. They incentivize users to keep the apps open by reflecting an increase in the user’s rewards over time. Some apps even incentivize users to leave 5-star ratings in order to get rewards. Of course, none of these apps were actually mining, and their users never received any rewards.
To guard against this scam, understand that for the majority of cryptocurrencies, mining requires highly specialized hardware (ASICs), meaning it is not feasible to mine on a mobile device. Whatever amounts you mine would be trivial at best. Stay away from any such apps.
Clipper apps
Such apps alter the cryptocurrency addresses you copy and replace them with those of the attacker. Thus, while a victim may copy the correct recipient address, the one they paste to process the transaction is replaced by those of the attacker.
To avoid falling victim to such apps, here are some precautions you can take when processing transactions.
Always double and triple check the address you are pasting into the recipient field. Blockchain transactions are irreversible so you should always be careful.
It is best to verify the entire address instead of just portions of it. Some apps are intelligent enough to paste addresses that look similar to your intended address.
SIM swapping
In a SIM swapping scam, a cybercriminal gains access to the phone number of a user. They do this by employing social engineering techniques to trick mobile phone operators into issuing a new SIM card to them. The most well-known SIM swapping scam involved cryptocurrency entrepreneur Michael Terpin. He alleged that AT&T was negligent in their handling of his mobile phone credentials resulting in him losing tokens valued at more than 20 million US dollars.
Once cybercriminals have gained access to your phone number, they can use it to bypass any 2FA that relies on that. From there, they can work their way into your cryptocurrency wallets and exchanges.
Another method cybercriminals can employ is to monitor your SMS communications. Flaws in communications networks can allow criminals to intercept your messages which can include the second-factor pin messaged to you.
What makes this attack particularly concerning is that users are not required to undertake any action, such as downloading a fake software or clicking a malicious link.
To prevent falling prey to such scams, here are some steps to consider.
Do not use your mobile phone number for SMS 2FA. Instead, use apps like Google Authenticator or Authy to secure your accounts. Cybercriminals are unable to gain access to these apps even if they possess your phone number. Alternatively, you may use hardware 2FA such as YubiKey or Google's Titan Security Key.
Do not reveal personal identifying information on social media, such as your mobile phone number. Cybercriminals can pick up such information and use them to impersonate you elsewhere.
You should never announce on social media that you own cryptocurrencies as this would make you a target. Or if you are in a position where everyone already knows you own them, then avoid disclosing personal information including the exchanges or wallets you use.
Make arrangements with your mobile phone providers to protect your account. This could mean attaching a pin or password to your account and dictating that only users with knowledge of the pin can make changes to the account. Alternatively, you can require such changes to be made in person and disallow them over the phone.
WiFi
Cybercriminals are constantly seeking entry points into mobile devices, especially the ones of cryptocurrency users. One such entry point is that of WiFi access. Public WiFi is insecure and users should take precautions before connecting to them. If not, they risk cybercriminals gaining access to the data on their mobile devices. These precautions have been covered in the article on public WiFi.
Closing thoughts
Mobile phones have become an essential part of our lives. In fact, they are so intertwined with your digital identity that they can become your greatest vulnerability. Cybercriminals are aware of this and will continue to find ways to exploit this. Securing your mobile devices is no longer optional. It has become a necessity. Stay safe.
📌
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Your Guide to Binance Spot Trading
Key Takeaways
Spot trading is among the simplest and most traditional ways of buying and selling financial assets.
Binance Spot trading platform offers a user-friendly interface with low fees and high liquidity. It’s suitable for all kinds of traders.
The guide covers the basics of spot trading and shows you how to use Binance Spot so you can easily buy or sell cryptocurrencies anytime.
Introduction
When people first begin their journey into cryptocurrency trading and investing, they often start with spot trading, which is among the simplest ways of buying and selling financial assets.
Binance Spot is a spot trading platform that offers a user-friendly interface, allowing users to easily buy and sell assets with low fees and high liquidity, making it ideal for both beginners and experienced traders.
In this article, we will cover the basics of spot trading, how it differs from other forms of trading, and some of its advantages. After that, we will learn how to do spot trading on Binance.
What Is Spot Trading?
Spot trading is a direct and immediate form of trading, with transactions settling instantly and without any kind of leverage. It’s one of the most basic forms of trading and can be done with a variety of asset classes, such as cryptocurrencies, stocks, commodities, forex, bonds, and more.
Although spot trading may occur directly between traders, transactions are usually facilitated by an exchange like Binance.
What’s the Difference Between Spot Markets and Futures Markets?
Spot markets execute instant or short-term trades with immediate delivery, while futures markets involve contracts that set delivery for a future date. Spot trading relies on the current market price based on supply and demand. Futures contracts, on the other hand, are based on agreements between buyers and sellers.
What’s the Difference Between Spot Trading and Margin Trading?
Spot trading requires full asset purchase and immediate delivery, while margin trading allows borrowing funds to enter larger positions. Margin trading amplifies both potential profits and losses, offering increased risk and reward.
Advantages of Spot Trading
Lower risk: Spot markets rely solely on buy and sell orders without concerns of liquidation or margin calls. It’s ideal for users who want to buy and hold.
Simplicity: Spot trading is straightforward, making it accessible for everyone and ideal for beginners.
Immediate entry and exit: Traders can enter or exit a trade at any time.
How to Spot Trade on Binance?
In this example, we will go through the Binance Spot interface. Then, we will illustrate how to buy BTC with USDT using a limit order, followed by an example of how to sell BTC for USDT using a market order.
How to access the Binance Spot interface
1. Log in to your Binance account and find [Trade] → [Spot].
2. You will be redirected to the Binance trading interface.
3. On the left side is the order book. Sell orders (asks) are in red, while buy orders (bids) are in green.
4. The trading chart at the center is an interactive chart of the selected trading pair. In this example, BTC/USDT.
5. The trading pair list is on the right side. It contains all available trading pairs on Binance. You can use the Search function to find specific pairs.
6. Below the chart is where you can create buying and selling orders. But to do so, you need to fund your Spot Wallet.
7. For example, if you are buying BTC with USDT, you need to first add USDT to your Spot Wallet. Click the [+] icon to fund your account and choose your preferred method.
How to buy BTC with USDT
1. The first step is to choose an order type. A limit order allows you to set a specific price for your order (not necessarily the current price). A market order will try to fulfill your order as soon as possible at the current available price.
2. If you are using a limit order, specify the price and amount you want to buy and click [Buy BTC] to create the order.
3. You will get a notification at the top right corner of your screen.
Note that you can track your open orders at the bottom of your trading interface.
4. If BTC reaches your order price, your order will be filled.
How to sell BTC for USDT
The process for creating selling orders is very similar. Let’s see how you can sell your BTC for USDT. In this example, we will use a market order.
1. Choose your order type, set the amount, and click [Sell BTC].
2. Since we are using a market order, the selling order will be created and filled immediately at market price.
How to view my order details
You can view your order history, trade history, and other details at the bottom of your trading interface.
You can also edit open orders by clicking the edit button near Price and Amount.
On the right side, you can click the bin icon to cancel orders individually or the [Cancel All] button to cancel all open orders.
Closing Thoughts
Embarking on the exciting journey of cryptocurrency trading often starts with the simplicity and accessibility of spot trading. Binance Spot, with its user-friendly interface, low fees, and high liquidity, is the ideal platform for both novice and seasoned traders.
Further Reading
Your Guide to Binance Launchpad and Launchpool
An Introduction to BNB Smart Chain (BSC)
What Are Bitcoin Layer 2 Networks?
Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.
Spot trading is among the simplest and most traditional ways of buying and selling financial assets.
Binance Spot trading platform offers a user-friendly interface with low fees and high liquidity. It’s suitable for all kinds of traders.
The guide covers the basics of spot trading and shows you how to use Binance Spot so you can easily buy or sell cryptocurrencies anytime.
Introduction
When people first begin their journey into cryptocurrency trading and investing, they often start with spot trading, which is among the simplest ways of buying and selling financial assets.
Binance Spot is a spot trading platform that offers a user-friendly interface, allowing users to easily buy and sell assets with low fees and high liquidity, making it ideal for both beginners and experienced traders.
In this article, we will cover the basics of spot trading, how it differs from other forms of trading, and some of its advantages. After that, we will learn how to do spot trading on Binance.
What Is Spot Trading?
Spot trading is a direct and immediate form of trading, with transactions settling instantly and without any kind of leverage. It’s one of the most basic forms of trading and can be done with a variety of asset classes, such as cryptocurrencies, stocks, commodities, forex, bonds, and more.
Although spot trading may occur directly between traders, transactions are usually facilitated by an exchange like Binance.
What’s the Difference Between Spot Markets and Futures Markets?
Spot markets execute instant or short-term trades with immediate delivery, while futures markets involve contracts that set delivery for a future date. Spot trading relies on the current market price based on supply and demand. Futures contracts, on the other hand, are based on agreements between buyers and sellers.
What’s the Difference Between Spot Trading and Margin Trading?
Spot trading requires full asset purchase and immediate delivery, while margin trading allows borrowing funds to enter larger positions. Margin trading amplifies both potential profits and losses, offering increased risk and reward.
Advantages of Spot Trading
Lower risk: Spot markets rely solely on buy and sell orders without concerns of liquidation or margin calls. It’s ideal for users who want to buy and hold.
Simplicity: Spot trading is straightforward, making it accessible for everyone and ideal for beginners.
Immediate entry and exit: Traders can enter or exit a trade at any time.
How to Spot Trade on Binance?
In this example, we will go through the Binance Spot interface. Then, we will illustrate how to buy BTC with USDT using a limit order, followed by an example of how to sell BTC for USDT using a market order.
How to access the Binance Spot interface
1. Log in to your Binance account and find [Trade] → [Spot].
2. You will be redirected to the Binance trading interface.
3. On the left side is the order book. Sell orders (asks) are in red, while buy orders (bids) are in green.
4. The trading chart at the center is an interactive chart of the selected trading pair. In this example, BTC/USDT.
5. The trading pair list is on the right side. It contains all available trading pairs on Binance. You can use the Search function to find specific pairs.
6. Below the chart is where you can create buying and selling orders. But to do so, you need to fund your Spot Wallet.
7. For example, if you are buying BTC with USDT, you need to first add USDT to your Spot Wallet. Click the [+] icon to fund your account and choose your preferred method.
How to buy BTC with USDT
1. The first step is to choose an order type. A limit order allows you to set a specific price for your order (not necessarily the current price). A market order will try to fulfill your order as soon as possible at the current available price.
2. If you are using a limit order, specify the price and amount you want to buy and click [Buy BTC] to create the order.
3. You will get a notification at the top right corner of your screen.
Note that you can track your open orders at the bottom of your trading interface.
4. If BTC reaches your order price, your order will be filled.
How to sell BTC for USDT
The process for creating selling orders is very similar. Let’s see how you can sell your BTC for USDT. In this example, we will use a market order.
1. Choose your order type, set the amount, and click [Sell BTC].
2. Since we are using a market order, the selling order will be created and filled immediately at market price.
How to view my order details
You can view your order history, trade history, and other details at the bottom of your trading interface.
You can also edit open orders by clicking the edit button near Price and Amount.
On the right side, you can click the bin icon to cancel orders individually or the [Cancel All] button to cancel all open orders.
Closing Thoughts
Embarking on the exciting journey of cryptocurrency trading often starts with the simplicity and accessibility of spot trading. Binance Spot, with its user-friendly interface, low fees, and high liquidity, is the ideal platform for both novice and seasoned traders.
Further Reading
Your Guide to Binance Launchpad and Launchpool
An Introduction to BNB Smart Chain (BSC)
What Are Bitcoin Layer 2 Networks?
Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.
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A Beginner's Guide to Candlestick Charts
Introduction
As a newcomer to trading or investing, reading charts can be a daunting task. Some rely on their gut feeling and make their investments based on their intuition. While this strategy might temporarily work in a bullish market environment, it most likely won’t in the long run.
Essentially, trading and investing are games of probabilities and risk management. So, being able to read candlestick charts is vital to almost any investment style. This article will explain what candlestick charts are and how to read them.
What is a candlestick chart?
A candlestick chart is a type of financial chart that graphically represents the price moves of an asset for a given timeframe. As the name suggests, it’s made up of candlesticks, each representing the same amount of time. The candlesticks can represent virtually any period, from seconds to years.
Candlestick charts date back to about the 17th century. Their creation as a charting tool is often credited to a Japanese rice trader called Homma. His ideas were likely what provided the foundation for what is now used as the modern candlestick chart. Homma’s findings were refined by many, most notably by Charles Dow, one of the fathers of modern technical analysis.
While candlestick charts could be used to analyze any other types of data, they are mostly employed to facilitate the analysis of financial markets. Used correctly, they’re tools that can help traders gauge the probability of outcomes in the price movement. They can be useful as they enable traders and investors to form their own ideas based on their analysis of the market.
How do candlestick charts work?
The following price points are needed to create each candlestick:
Open — The first recorded trading price of the asset within that particular timeframe.
High — The highest recorded trading price of the asset within that particular timeframe.
Low — The lowest recorded trading price of the asset within that particular timeframe.
Close — The last recorded trading price of the asset within that particular timeframe.
Collectively, this data set is often referred to as the OHLC values. The relationship between the open, high, low, and close determines how the candlestick looks.
The distance between the open and close is referred to as the body, while the distance between the body and the high/low is referred to as the wick or shadow. The distance between the high and low of the candle is called the range of the candlestick.
How to read candlestick charts
Many traders consider candlestick charts easier to read than the more conventional bar and line charts, even though they provide similar information. Candlestick charts can be read at a glance, offering a simple representation of price action.
In practice, a candlestick shows the battle between bulls and bears for a certain period. Generally, the longer the body is, the more intense the buying or selling pressure was during the measured timeframe. If the wicks on the candle are short, it means that the high (or the low) of the measured timeframe was near the closing price.
The color and settings may vary with different charting tools, but generally, if the body is green, it means that the asset closed higher than it opened. Red means that the price moved down during the measured timeframe, so the close was lower than the open.
Some chartists prefer to use black-and-white representations. So instead of using green and red, the charts represent up movements with hollow candles and down moves with black candles.
What candlestick charts don’t tell you
While candlesticks are useful in giving you a general idea of price action, they may not provide all you need for a comprehensive analysis. For instance, candlesticks don’t show in detail what happened in the interval between the open and close, only the distance between the two points (along with the highest and lowest prices).
For example, while the wicks of a candlestick do tell us the high and low of the period, they can't tell us which one happened first. Still, in most charting tools, the timeframe can be changed, allowing traders to zoom into lower timeframes for more details.
Candlestick charts can also contain a lot of market noise, especially when charting lower timeframes. The candles can change very quickly, which can make them challenging to interpret.
Heikin-Ashi candlesticks
So far, we have discussed what is sometimes referred to as the Japanese candlestick chart. But, there are other ways to calculate candlesticks. The Heikin-Ashi Technique is one of them.
Heikin-Ashi stands for “average bar” in Japanese. Such candlestick charts rely on a modified formula that uses average price data. The main goal is to smooth out price action and filter out market noise. As such, Heikin-Ashi candles can make it easier to spot market trends, price patterns, and possible reversals.
Traders often use Heikin-Ashi candles in combination with Japanese candlesticks to avoid false signals and increase the chances of spotting market trends. Green Heikin-Ashi candles with no lower wicks generally indicate a strong uptrend, while red candles with no upper wicks may point to a strong downtrend.
While Heikin-Ashi candlesticks can be a powerful tool, like any other technical analysis technique, they do have their limitations. Since these candles use averaged price data, patterns may take longer to develop. Also, they don’t show price gaps and may obscure other price data.
Closing thoughts
Candlestick charts are one of the most fundamental tools for any trader or investor. They not only provide a visual representation of the price action for a given asset, but also offer the flexibility to analyze data in different timeframes.
An extensive study of candlestick charts and patterns, combined with an analytical mindset and enough practice may eventually provide traders with an edge over the market. Still, most traders and investors agree that it’s also important to consider other methods, such as fundamental analysis.
As a newcomer to trading or investing, reading charts can be a daunting task. Some rely on their gut feeling and make their investments based on their intuition. While this strategy might temporarily work in a bullish market environment, it most likely won’t in the long run.
Essentially, trading and investing are games of probabilities and risk management. So, being able to read candlestick charts is vital to almost any investment style. This article will explain what candlestick charts are and how to read them.
What is a candlestick chart?
A candlestick chart is a type of financial chart that graphically represents the price moves of an asset for a given timeframe. As the name suggests, it’s made up of candlesticks, each representing the same amount of time. The candlesticks can represent virtually any period, from seconds to years.
Candlestick charts date back to about the 17th century. Their creation as a charting tool is often credited to a Japanese rice trader called Homma. His ideas were likely what provided the foundation for what is now used as the modern candlestick chart. Homma’s findings were refined by many, most notably by Charles Dow, one of the fathers of modern technical analysis.
While candlestick charts could be used to analyze any other types of data, they are mostly employed to facilitate the analysis of financial markets. Used correctly, they’re tools that can help traders gauge the probability of outcomes in the price movement. They can be useful as they enable traders and investors to form their own ideas based on their analysis of the market.
How do candlestick charts work?
The following price points are needed to create each candlestick:
Open — The first recorded trading price of the asset within that particular timeframe.
High — The highest recorded trading price of the asset within that particular timeframe.
Low — The lowest recorded trading price of the asset within that particular timeframe.
Close — The last recorded trading price of the asset within that particular timeframe.
Collectively, this data set is often referred to as the OHLC values. The relationship between the open, high, low, and close determines how the candlestick looks.
The distance between the open and close is referred to as the body, while the distance between the body and the high/low is referred to as the wick or shadow. The distance between the high and low of the candle is called the range of the candlestick.
How to read candlestick charts
Many traders consider candlestick charts easier to read than the more conventional bar and line charts, even though they provide similar information. Candlestick charts can be read at a glance, offering a simple representation of price action.
In practice, a candlestick shows the battle between bulls and bears for a certain period. Generally, the longer the body is, the more intense the buying or selling pressure was during the measured timeframe. If the wicks on the candle are short, it means that the high (or the low) of the measured timeframe was near the closing price.
The color and settings may vary with different charting tools, but generally, if the body is green, it means that the asset closed higher than it opened. Red means that the price moved down during the measured timeframe, so the close was lower than the open.
Some chartists prefer to use black-and-white representations. So instead of using green and red, the charts represent up movements with hollow candles and down moves with black candles.
What candlestick charts don’t tell you
While candlesticks are useful in giving you a general idea of price action, they may not provide all you need for a comprehensive analysis. For instance, candlesticks don’t show in detail what happened in the interval between the open and close, only the distance between the two points (along with the highest and lowest prices).
For example, while the wicks of a candlestick do tell us the high and low of the period, they can't tell us which one happened first. Still, in most charting tools, the timeframe can be changed, allowing traders to zoom into lower timeframes for more details.
Candlestick charts can also contain a lot of market noise, especially when charting lower timeframes. The candles can change very quickly, which can make them challenging to interpret.
Heikin-Ashi candlesticks
So far, we have discussed what is sometimes referred to as the Japanese candlestick chart. But, there are other ways to calculate candlesticks. The Heikin-Ashi Technique is one of them.
Heikin-Ashi stands for “average bar” in Japanese. Such candlestick charts rely on a modified formula that uses average price data. The main goal is to smooth out price action and filter out market noise. As such, Heikin-Ashi candles can make it easier to spot market trends, price patterns, and possible reversals.
Traders often use Heikin-Ashi candles in combination with Japanese candlesticks to avoid false signals and increase the chances of spotting market trends. Green Heikin-Ashi candles with no lower wicks generally indicate a strong uptrend, while red candles with no upper wicks may point to a strong downtrend.
While Heikin-Ashi candlesticks can be a powerful tool, like any other technical analysis technique, they do have their limitations. Since these candles use averaged price data, patterns may take longer to develop. Also, they don’t show price gaps and may obscure other price data.
Closing thoughts
Candlestick charts are one of the most fundamental tools for any trader or investor. They not only provide a visual representation of the price action for a given asset, but also offer the flexibility to analyze data in different timeframes.
An extensive study of candlestick charts and patterns, combined with an analytical mindset and enough practice may eventually provide traders with an edge over the market. Still, most traders and investors agree that it’s also important to consider other methods, such as fundamental analysis.
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koinmilyoner
--
Ανατιμητική
Top 9 Unheralded Cryptocurrencies to Consider for March 2024 Portfolios
1. PolkaDot
Polkadot, anyone? No need to be shy, come on! When it comes to facilitating communication and information sharing across blockchains, DOT is engaged. At its heart lies technical innovation and a thriving ecosystem, making it an ideal match for daredevils who love taking risks.
2. Chainlink
"Chainlink," you inquire? The integration of smart contracts with APIs, payments, and real-world data is a step in the right direction. Bringing the cryptoverse into contact with the real world?
3. Uniswap
This workhorse is too good to pass up. Because of its innovative protocol that allows users to trade straight from their wallets, Uniswap has become the decentralized exchange on Ethereum that everyone is talking about.
4. Cardano
Cardano like that towering geek who, out of the blue, starts playing quarterback for his high school. Its revolutionary Proof of Stake algorithm revitalizes blockchain safety and sustainability.
5. Avalanche
The environment offered by Avalanche is very scalable and compatible with other systems. Maybe AVAX, which receives less media attention than Ethereum but has greater potential for development, will be your ticket to the moon.
6. NULS
With microservices, you may design your system around your company's capabilities and scale up or down far more rapidly. Similar to a building site where many tasks are being carried out simultaneously, you may arrange your organization around autonomous cross-functional teams
7. KSM
The wilder cousin of Polkadot: Kusama! The activity is in KSM, thanks to its speedier governance and lower entrance hurdles. It is untamed and ready to flourish since it is under less scrutiny.
8. ORN
Orion Protocol is the business-to-business (B2B) entry point to the whole cryptocurrency industry. Potentially taking ORN to new heights, its platform is both powerful and decentralized.
9. VET
Last but not least, VeChain simplifies tracking in the supply chain by bringing blockchain technology to the corporate sector.
#HotTrends #NULS #cardano
1. PolkaDot
Polkadot, anyone? No need to be shy, come on! When it comes to facilitating communication and information sharing across blockchains, DOT is engaged. At its heart lies technical innovation and a thriving ecosystem, making it an ideal match for daredevils who love taking risks.
2. Chainlink
"Chainlink," you inquire? The integration of smart contracts with APIs, payments, and real-world data is a step in the right direction. Bringing the cryptoverse into contact with the real world?
3. Uniswap
This workhorse is too good to pass up. Because of its innovative protocol that allows users to trade straight from their wallets, Uniswap has become the decentralized exchange on Ethereum that everyone is talking about.
4. Cardano
Cardano like that towering geek who, out of the blue, starts playing quarterback for his high school. Its revolutionary Proof of Stake algorithm revitalizes blockchain safety and sustainability.
5. Avalanche
The environment offered by Avalanche is very scalable and compatible with other systems. Maybe AVAX, which receives less media attention than Ethereum but has greater potential for development, will be your ticket to the moon.
6. NULS
With microservices, you may design your system around your company's capabilities and scale up or down far more rapidly. Similar to a building site where many tasks are being carried out simultaneously, you may arrange your organization around autonomous cross-functional teams
7. KSM
The wilder cousin of Polkadot: Kusama! The activity is in KSM, thanks to its speedier governance and lower entrance hurdles. It is untamed and ready to flourish since it is under less scrutiny.
8. ORN
Orion Protocol is the business-to-business (B2B) entry point to the whole cryptocurrency industry. Potentially taking ORN to new heights, its platform is both powerful and decentralized.
9. VET
Last but not least, VeChain simplifies tracking in the supply chain by bringing blockchain technology to the corporate sector.
#HotTrends #NULS #cardano
#helpful
LIVEAliya Ibrar
--
Ανατιμητική
Always Keep Some Money Available
I notice many people feeling worried because the crypto market is going down. But it's actually a good thing! This is a great chance to buy more crypto.
Most people do the opposite of what they should do. They buy when the market is doing well and sell when it's not. Instead, you should buy when the market is down. These moments are when you can make the most profit.
You should always keep some USDT (a type of cryptocurrency) in your Binance account. Try to have at least 20% of your total money in USDT. This way, when the market goes down, you can use this money to buy more crypto.
Also, whenever you make a profit from your investments, keep 20% of it in USDT too. Don't spend it when the market is doing well. In a strong market, you'll make more money by buying when the prices are low.
Investing is serious, so it's important to listen to those who know what they're doing. Follow their advice, and you'll do better in the long run.
This is just my opinion. Thanks for reading. If you found it helpful, please like, comment, and share. And if you want to support me, you can tip me. It's the only way I earn for teaching you about the crypto market. Thanks to those who do!
I notice many people feeling worried because the crypto market is going down. But it's actually a good thing! This is a great chance to buy more crypto.
Most people do the opposite of what they should do. They buy when the market is doing well and sell when it's not. Instead, you should buy when the market is down. These moments are when you can make the most profit.
You should always keep some USDT (a type of cryptocurrency) in your Binance account. Try to have at least 20% of your total money in USDT. This way, when the market goes down, you can use this money to buy more crypto.
Also, whenever you make a profit from your investments, keep 20% of it in USDT too. Don't spend it when the market is doing well. In a strong market, you'll make more money by buying when the prices are low.
Investing is serious, so it's important to listen to those who know what they're doing. Follow their advice, and you'll do better in the long run.
This is just my opinion. Thanks for reading. If you found it helpful, please like, comment, and share. And if you want to support me, you can tip me. It's the only way I earn for teaching you about the crypto market. Thanks to those who do!
LIVEBinance Academy
--
How to Invest in Bitcoin and Cryptocurrencies
TL;DR
Bitcoin may be one of the most popular coins to invest in, but it’s not the only one. Altcoins provide a great alternative when buying crypto that can increase the diversity of your portfolio.
Your choice of crypto should also take into account whether you are investing or trading, as well as your risk profile and the type of analysis you want to make. You could choose fundamental or technical analysis or even a mixture of both. With all this in mind, you’ll be ready to start investing or trading on Binance.
Introduction
Investing in Bitcoin and other cryptocurrencies is a great way to diversify your investments, but it also involves high risk. So before you jump in, it’s essential to understand some basic concepts and principles. There’s more to it than just buying some crypto and hoping for the best.
An informed investment decision involves careful research and analysis. Ideally, you should have a strategy based on your risk profile, and you should never invest more than you can afford to lose.
Bitcoin or altcoins?
For newcomers to crypto, Bitcoin is usually the first stop when it comes to investing. It’s the most famous blockchain project and the largest cryptocurrency by market capitalization.
However, there are thousands of different cryptocurrencies (altcoins) out there. Some altcoins have their own blockchain, while others use a pre-existing network (such as BNB Smart Chain or Ethereum). Every project has a different proposal, each with its own potential risks and benefits.
Whether you want to invest in BTC only or multiple cryptoassets is totally up to you. Some prefer to stick to BTC; others prefer to diversify their holdings with altcoins.
On the one hand, asset diversification removes the risks of investing in only one project. If you have multiple assets, you are less likely to lose significant amounts if one of them fails. On the other hand, altcoin investments can be risky and, unfortunately, there are many scams around. So it’s very important to do your own research before taking risks.
With the massive amount of coins available, it’s hard to know where to start. Take a look at What Crypto Should I Buy Aside From Bitcoin? for more information on some of the different types of cryptocurrencies.
Should I trade or invest?
A decision on what to buy also needs to take into account if you are investing or trading. The two are easily confused, but there’s a difference. Put simply, investing involves picking assets that you believe in and holding over a longer time. Such a strategy involves a less active time commitment and usually carries much less risk.
In contrast, trading aims to make short or medium-term gains through regular buying and selling. Becoming a good trader takes a lot of time and practice. A trader needs to develop more complex strategies, dedicate more time to analyzing markets and trading platforms, and handle more risk. They also need to consider the money spent on trading and transaction fees.
Keep in mind that cryptocurrency markets sometimes present more volatility than traditional ones. While traders need volatility to make profits, high levels of volatility may also bring high risk.
For beginners, investing is by far the easiest and safest option. Investors are usually thinking in terms of years, so short-term price changes aren’t that important. A decision to invest is based more on the fundamentals of a coin (how solid is the project and how likely it is to succeed in the long run).
Some prefer to invest and not worry about short-term fluctuations. Others prefer to trade often in an attempt to maximize profits. Some even do both at the same time. It all depends on your strategy, profile, and risk tolerance.
Again, the decision is yours, but you should never invest or trade with funds that you cannot afford to lose.
With all that said, if you want to learn more about crypto day trading and swing trading, you can find more information in our Complete Guide to Cryptocurrency Trading for Beginners.
Fundamental analysis vs. technical analysis
Deciding on what will make a good investment needs some analysis work. The type of analysis will depend primarily on investing or trading, but both fundamental and technical analyses can be useful.
As mentioned, short to medium-term price changes aren’t so important when investing (or HODLing). In general, long-term investment is more concerned with the intrinsic value of a coin or project, which relates to fundamental analysis (FA).
Fundamental analysis involves assessing the potential of an asset based on the project as a whole, including its utility, team, whitepaper, development, marketing, management, reputation, long-term goals, and other factors.
In contrast, technical analysis (TA) considers previous price action and volume data to try and predict future price movements. The technique usually involves candlestick charts and TA indicators, such as moving averages and trend lines.
Buying your first bitcoin on Binance
You can easily buy bitcoin and other altcoins on the Binance crypto exchange.
1. Create an account by heading to the Binance homepage and clicking [Register] at the top right corner.
2. Next, you will have to verify your Binance account. This KYC process helps us make sure you are who you claim to be and fulfill our legal requirements.
3. The easiest method to buy some crypto is to use your credit card or debit card with the Convert feature.
You can also transfer fiat currency from your bank account to buy digital assets with the trading view. See the Binance Beginner's Guide for complete instructions on both methods.
Buying your first altcoin on Binance
You can begin diversifying your portfolio by buying an altcoin like BNB, which is a utility token with many use cases.
1. Log in to your Binance account, hover over the [Buy Crypto] button, and click [Credit/Debit Card].
2. Next, you’ll be able to choose from a variety of cryptocurrencies. Make sure to select the correct fiat currency as well. In this example, we chose to buy BNB with EUR.
3. Fill in your card details to finalize the purchase and wait for the crypto to be credited to your account.
What should I do with my cryptocurrency?
Buying, selling, and holding crypto are some of the strategies you can use when investing or trading crypto. When it comes to long-term holding, you can choose to keep your cryptocurrencies in your Binance account or transfer them to an external cryptocurrency wallet.
If you opt to keep your crypto in your Binance account, you may consider exploring the many options provided by Binance Earn. You can think of it as a savings account that allows you to earn passive income while holding your crypto.
Closing thoughts
It takes some time to learn how to invest or trade cryptocurrencies. Improving your knowledge is a good way of reducing your overall investment risk, leading to more informed decisions. It's easy to panic-sell an asset based on emotion, but the chances of this happening are much lower when you study up on investment and trading. For more on this, check out The Psychology of Market Cycles.
Bitcoin may be one of the most popular coins to invest in, but it’s not the only one. Altcoins provide a great alternative when buying crypto that can increase the diversity of your portfolio.
Your choice of crypto should also take into account whether you are investing or trading, as well as your risk profile and the type of analysis you want to make. You could choose fundamental or technical analysis or even a mixture of both. With all this in mind, you’ll be ready to start investing or trading on Binance.
Introduction
Investing in Bitcoin and other cryptocurrencies is a great way to diversify your investments, but it also involves high risk. So before you jump in, it’s essential to understand some basic concepts and principles. There’s more to it than just buying some crypto and hoping for the best.
An informed investment decision involves careful research and analysis. Ideally, you should have a strategy based on your risk profile, and you should never invest more than you can afford to lose.
Bitcoin or altcoins?
For newcomers to crypto, Bitcoin is usually the first stop when it comes to investing. It’s the most famous blockchain project and the largest cryptocurrency by market capitalization.
However, there are thousands of different cryptocurrencies (altcoins) out there. Some altcoins have their own blockchain, while others use a pre-existing network (such as BNB Smart Chain or Ethereum). Every project has a different proposal, each with its own potential risks and benefits.
Whether you want to invest in BTC only or multiple cryptoassets is totally up to you. Some prefer to stick to BTC; others prefer to diversify their holdings with altcoins.
On the one hand, asset diversification removes the risks of investing in only one project. If you have multiple assets, you are less likely to lose significant amounts if one of them fails. On the other hand, altcoin investments can be risky and, unfortunately, there are many scams around. So it’s very important to do your own research before taking risks.
With the massive amount of coins available, it’s hard to know where to start. Take a look at What Crypto Should I Buy Aside From Bitcoin? for more information on some of the different types of cryptocurrencies.
Should I trade or invest?
A decision on what to buy also needs to take into account if you are investing or trading. The two are easily confused, but there’s a difference. Put simply, investing involves picking assets that you believe in and holding over a longer time. Such a strategy involves a less active time commitment and usually carries much less risk.
In contrast, trading aims to make short or medium-term gains through regular buying and selling. Becoming a good trader takes a lot of time and practice. A trader needs to develop more complex strategies, dedicate more time to analyzing markets and trading platforms, and handle more risk. They also need to consider the money spent on trading and transaction fees.
Keep in mind that cryptocurrency markets sometimes present more volatility than traditional ones. While traders need volatility to make profits, high levels of volatility may also bring high risk.
For beginners, investing is by far the easiest and safest option. Investors are usually thinking in terms of years, so short-term price changes aren’t that important. A decision to invest is based more on the fundamentals of a coin (how solid is the project and how likely it is to succeed in the long run).
Some prefer to invest and not worry about short-term fluctuations. Others prefer to trade often in an attempt to maximize profits. Some even do both at the same time. It all depends on your strategy, profile, and risk tolerance.
Again, the decision is yours, but you should never invest or trade with funds that you cannot afford to lose.
With all that said, if you want to learn more about crypto day trading and swing trading, you can find more information in our Complete Guide to Cryptocurrency Trading for Beginners.
Fundamental analysis vs. technical analysis
Deciding on what will make a good investment needs some analysis work. The type of analysis will depend primarily on investing or trading, but both fundamental and technical analyses can be useful.
As mentioned, short to medium-term price changes aren’t so important when investing (or HODLing). In general, long-term investment is more concerned with the intrinsic value of a coin or project, which relates to fundamental analysis (FA).
Fundamental analysis involves assessing the potential of an asset based on the project as a whole, including its utility, team, whitepaper, development, marketing, management, reputation, long-term goals, and other factors.
In contrast, technical analysis (TA) considers previous price action and volume data to try and predict future price movements. The technique usually involves candlestick charts and TA indicators, such as moving averages and trend lines.
Buying your first bitcoin on Binance
You can easily buy bitcoin and other altcoins on the Binance crypto exchange.
1. Create an account by heading to the Binance homepage and clicking [Register] at the top right corner.
2. Next, you will have to verify your Binance account. This KYC process helps us make sure you are who you claim to be and fulfill our legal requirements.
3. The easiest method to buy some crypto is to use your credit card or debit card with the Convert feature.
You can also transfer fiat currency from your bank account to buy digital assets with the trading view. See the Binance Beginner's Guide for complete instructions on both methods.
Buying your first altcoin on Binance
You can begin diversifying your portfolio by buying an altcoin like BNB, which is a utility token with many use cases.
1. Log in to your Binance account, hover over the [Buy Crypto] button, and click [Credit/Debit Card].
2. Next, you’ll be able to choose from a variety of cryptocurrencies. Make sure to select the correct fiat currency as well. In this example, we chose to buy BNB with EUR.
3. Fill in your card details to finalize the purchase and wait for the crypto to be credited to your account.
What should I do with my cryptocurrency?
Buying, selling, and holding crypto are some of the strategies you can use when investing or trading crypto. When it comes to long-term holding, you can choose to keep your cryptocurrencies in your Binance account or transfer them to an external cryptocurrency wallet.
If you opt to keep your crypto in your Binance account, you may consider exploring the many options provided by Binance Earn. You can think of it as a savings account that allows you to earn passive income while holding your crypto.
Closing thoughts
It takes some time to learn how to invest or trade cryptocurrencies. Improving your knowledge is a good way of reducing your overall investment risk, leading to more informed decisions. It's easy to panic-sell an asset based on emotion, but the chances of this happening are much lower when you study up on investment and trading. For more on this, check out The Psychology of Market Cycles.
