Is Cryptocurrency Trading Safe
Cryptocurrency trading is not risk-free from a variety of perspectives, it’s important that you understand the steps that you can take to remain safe.
First and foremost, the majority of cryptocurrency trading platforms are unlicensed. As such, in using an unlicensed platform, your funds are at risk.
This is why we like eToro – which is regulated by several tier-one licensing bodies and approved to offer cryptocurrency brokerage services to US residents.
Next, you need to think about the risks of losing money from your trading activities. We discussed these earlier in terms of bankroll management and ensuring that both stop-loss and take-profit orders are always deployed.
Another safety measure that you need to think about is the storage of your cryptocurrencies. After all, when using a trading platform, the provider will be responsible for keeping your digital currencies safe.
This is why it’s important to assess what security controls the platform offers. For example, eToro offers a custodial wallet service that utilizes institutional-grade security practices.
This means that you do not need to worry about keeping your own private keys safe. eToro also has an internal risk management department that is tasked with keeping its customers safe from financial crime.
Cryptoassets are a highly volatile unregulated investment product.
Do I Need To Do Crypto Taxes
Disclaimer: We are no tax bureau nor tax consultants. If you have issues with taxes, and if large sums are at stake, you better ask your local tax consultant.
Right now there are only a few tax consultants who know how to deal with cryptocurrencies. But it can be safely assumed that the number is growing quickly and that cryptocurrencies will soon be a standard issue for tax experts like securities, shares, ETFs and real estates are.
All we can provide here is an overview of the typical issues with cryptocurrencies and taxes.
Pros And Cons Of Day Trading Cryptocurrency
Any investment in crypto is high risk, high reward. Crypto is a new class of digital assets, and investors should always consider the possibility that their crypto investments are capable of evaporating.
Traders should set time aside to familiarize themselves with the upcoming rules and regulations taxing profits earned from crypto. Crypto is not exempt from short-term capital gains tax, for example. For day traders, the sale of any crypto held for less than a year is taxed as marginal income. Make sure to include your crypto gains when reporting earnings online or with your accounting professional.
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Leading Vs Lagging Indicators
As weve discussed, different indicators will have distinct qualities and should be used for specific purposes. Leading indicators point towards future events. Lagging indicators are used to confirm something that has already happened. So, when should you use them?
When it comes to trading and technical analysis, leading indicators can also be used for their predictive qualities. However, no special indicator can predict the future, so these forecasts should always be taken with a grain of salt.
Lagging indicators are used to confirm events and trends that had already happened, or are already underway. This may seem redundant, but it can be very useful. Lagging indicators can bring certain aspects of the market to the spotlight that otherwise would remain hidden. As such, lagging indicators are typically applied to longer-term chart analysis.
Short Selling: Sell Bitcoin Before The Fall
- Who its for: Advanced students
- Price: On sale
This course teaches you short-selling when to sell bitcoins when everyone else is buying. This course appeared when Bitcoin showed bubble attitude.
A lot of people who have taken this course might have made some big hits on Bitcoins fall. Bitcoin has already dropped but the information could apply to other cryptocurrencies. The course covers:
- How to aim high with lower risk
- How to discover price climax on the chart
- Adding short-selling to your trading toolbox
This course is a more advanced course because it teaches you how to trade against the overall trade, which is a very advanced approach itself. Short-selling cryptocurrency in bubbles requires some dedicated studying ahead of time.
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Use Leverage With Extreme Caution
Leverage enables you to hold a much higher stake in a trade than the actual capital in your account would otherwise allow. Though this may seem appealing, and can indeed lend itself to significant profit, it can also lead to huge losses if a leveraged trade was to turn against you.
Successful use of leverage is a balancing act between risk and reward and takes practice to master.
For bitcoin beginners, leverage is best used with extreme caution and preferably avoided altogether, at least until you have developed your confidence and trading style.
Only the most experienced traders with sound market knowledge should adopt leverage as part of their bitcoin trading strategy.
A Beginner’s Guide To Currency Trading
The first step in cryptocurrency trading is to find a suitable cryptocurrency trading platform and create an account. Different cryptocurrency traders have different needs and goals when it comes to trading. Fortunately, there are a variety of trading platforms to choose from on the internet. There are various factors to consider before choosing a platform such as security, ease of use, number of assets supported and many others.
After selecting a reliable platform, the next step is to create an account. Most platforms will provide you with a registration form to complete. You will need to enter a valid email address, choose a strong password and then click register. You will then be required to verify your account: an email will be sent to your address with a code that you use to verify your account.
After successful verification, the next step is to deposit your initial capital and begin your cryptocurrency trading journey. There are several methods of depositing funds such as credit/debit cards, Skrill, bank transfer, etc.
Trading cryptocurrencies might sound simple. However, there are many factors that determine whether you will be successful or not. Cryptocurrency trading is not a get-rich-quick scheme, but a wealth building and income generating method that requires discipline, patience and skills. Here are some tips to help you become a good cryptocurrency trader:
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The Different Types Of Cryptocurrency Trading
The first step is to decide between long-term or short-term cryptocurrency trading. Both are very different.
Long-term traders buy and hold cryptocurrencies over a long period of weeks, months or even years, with the intention of selling at a profit or using it later.
If you believe the value of a cryptocurrency will grow in the long run, and dont want the stress of actively trading, then this might be your style, and a good first step may be learning how to safely buy and hold cryptocurrency.
Short-term trading is about taking advantage of short term cryptocurrency price swings by creating and executing a trading strategy.
Its more active, stressful and risky than long-term trading, but it also offers faster and larger potential returns for those who do it right, and lets you profit from cryptocurrency prices dropping as well as rising.
If this is what youre looking for, you can either read on for a beginners guide or compare cryptocurrency trading platforms to get started.
Choose a trading method
The second step is choosing a trading method. This is important, because all of them are quite different and require different techniques. In some cases, the same cryptocurrency exchange will offer several different types of trading.
- Not so good for: High-risk high-reward strategies, profiting from markets dropping.
Learn how to trade cryptocurrencies against each other.
2. Trade cryptocurrency derivatives
Read The Projects Whitepaper
When youve found a cryptocurrency you like, the first thing you need to do is read the whitepaper.
A white paper is an authoritative report or guide that informs readers concisely about a complex issue and presents the issuing bodys philosophy on the matter. It is meant to help readers understand an issue, solve a problem, or make a decision.
Reading the whitepaper will give you two tremendous benefits:
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Who This Course Is For:
- If you are serious about Making Money Online by investing in the Cryptocurrency Market, this course is for you!
- If you want to Create a New Source of Passive Income, you’ve come to the right place!
- If you want to find a Trading Strategy that Actually Works, you should not ignore this course!
- If you are learning everything about Cryptocurrency Trading, this course will be a Shortcut!
- This course is for EVERYONE, who wants to Get Rich by Investing in the Cryptocurrency Market.
What Drives The Financial Markets
The price of an asset is simply determined by the balance of supply and demand. In other words, its decided by the buyers and sellers. Where supply meets demand, theres a market. But what else can drive the value of a financial asset?
However, these are just that factors to consider. What really determines the price of an asset in a given moment is simply the balance of supply and demand.
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Similarities Between The Crypto And Stock Market
- Stock trading and investing tools are more or less the same. This is especially true for technical traders using tools such as charts to analyze the market. You can use the same tools to perform TA ” rel=”nofollow”> Technical Analysis) for trades on either market.
- Assets denominated using fiat currencies. The crypto market may be innovative and revolutionary with the assets designed to append the current financial system. However, the denominations in the marketplace are still valued compared to fiat currencies similar to the stock market.
- Trading and investing strategies are similar. In the stock market, traders can choose to day trade, swing, or position trade. They can also opt to buy and hold their assets for the long term. Similarly, traders and investors in the crypto market can do the same things.
- Similar market products. The stock market has been around for generations, leading to innovative products such as derivatives and techniques such as using leverage to inflate gains Those same products and techniques have been ported over to the new age cryptocurrency market. You can now trade Bitcoin futures, options, and leveraged tokens. You can use leverage on most of your trades on most leading cryptocurrency exchanges, such as Binance, Bitfinex, or BitMEX. The full list of digital asset exchanges with a leverage trading here.
Please note: DO NOT trade cryptocurrencies with leverage unless you are fully aware of what you are doing and what risks you face.
Best Value: Cryptocurrency Foundations
Accredited certificates not available
No lifetime access
Lynda.com was launched in 2002 by Lynda Weinman and bought by LinkedIn in 2015 which rebranded it as LinkedIn Learning. Its Cryptocurrency Foundations is a popular course that gives students access to over 16,000 other business and marketing courses, making it our choice as the best value.
Cryptocurrency Foundations is taught by Jonathan Reichental, an award-winning technology leader whose innovative work in government has been recognized by the White House. Since its launch in 2018, the course has enrolled over 54,000 students.
Although Cryptocurrency Foundations is a fairly short course that covers the fundamentals of cryptocurrency, mining, and trading, it offers students access to eight other cryptocurrency courses consisting of almost 50 videos. The course itself consists of one project file and three quizzes that cover blockchain databases, hashing, cryptography, and more.
After completing Cryptocurrency Foundations, students will receive a certificate of completion which can be printed and shared on their LinkedIn profile. The course also fulfills 1.4 National Association of State Boards of Accountancy continuing professional education credits .
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Cryptocurrency Trading: Candlestick Trading Masterclass 2019
- Who its for: Advanced students
- Price: On sale
This is another technical analysis course for cryptocurrency but it only covers candlestick patterns, which is particularly useful if youre planning to day trade. The course is very comprehensive because it includes candle patterns.
Youll learn how to use the best candle patterns for cryptocurrency trading, fundamentals in reading and analyzing candle patterns and long body candle patterns.
This course will also cover spinning tops and bottoms, Doji candlesticks, pin bar, hammers, Marubozu and more.
Crypto Investing Vs Crypto Trading
As you learn how to buy and sell these digital assets, you need to differentiate what is cryptocurrency trading and what is investing in cryptocurrencies. Which one is better? No matter the differences, in the end the goal is always the same: making a profit. However, the expected outcome times are quite different: in investing, the outcome time ranges from medium to long term, while in trading, it ranges from the short to medium term.
Cryptocurrency investors buy and hold their assets for a long time ranging from several months to years. On the other hand, cryptocurrency traders hold their positions ranging from a few seconds, to several weeks.
This article will guide you on how you can start trading cryptocurrencies as a beginner, according to Bitcoin Prime experts.
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Keep Up To Date With Crypto News Stories
Making informed decisions means keeping abreast with the latest crypto news stories that could influence prices. Even something as innocuous as a tweet from an influencer can have an almost instant impact on prices, which is why CryptoParrot aims to publish the latest news stories as soon as we hear about them.
What You Should Know Before You Start Trading Cryptocurrency
If all you know about crypto trading is the above, you know enough to get started trading cryptocurrency.
However, there are a few things to know about trading cryptocurrency beyond what was noted above that can help you go into crypto trading prepared:
In other words, if you understand order types, security, and what you are trading, you are ready to start trading.
NOTE: For more tips and tricks, check out our crypto investing tips and tricks page.
TIP: There are a few sides to cryptocurrency. 1. you can trade and invest in it, 2. you can use it for transactions , 3. you can break out a graphics processing unit and some software and mine coins , 4. you can develop for it, etc. All those and more are valid and interesting ways to interact with the crypto space, but with that in mind, this page is focused on trading cryptocurrency . With that said, even if you want to do the other things with cryptocurrencies, you still need to be set up for trading .
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What Is The Dow Theory
The Dow Theory is a financial framework modeled on the ideas of Charles Dow. Dow founded the Wall Street Journal and helped create the first US stock indices, known as the Dow Jones Transportation Average and Dow Jones Industrial Average .
Though the Dow Theory was never formalized by Dow himself, it can be seen as an aggregation of the market principles presented in his writings. Here are some of the key takeaways:
- Everything is priced in Dow was a proponent of the efficient market hypothesis , the idea that markets reflect all of the available information on the price of their assets.
- Dow is often credited with the very notion of market trends as we know them today, distinguishing between primary, secondary, and tertiary trends.
- The phases of a primary trend in primary trends, Dow identifies three phases: accumulation, public participation, and excess & distribution.
- Cross-index correlation Dow believed that a trend in one index couldnt be confirmed unless it was observable in another index.
- The importance of volume a trend must also be confirmed by high trading volume.
- Trends are valid until reversal if a trend is confirmed, it continues until a definite reversal occurs.
Its worth remembering that this isnt an exact science its a theory, and it might not hold true. Still, its a theory that remains hugely influential, and many traders and investors consider it an integral part of their methodology.
Best For Advanced Strategies: Algorithmic Cryptocurrency Trading
Udemy Career Coaching Certification
Accredited certificates not available
No quizzes or assessment tools
Udemy doesnt just teach beginning courses in cryptocurrency trading. Its Algorithmic Cryptocurrency Trading course offers five fully manual and automatic strategies for trading cryptocurrencies. Combined with five downloadable EAs, the course ranks as the best for advanced strategies.
Algorithmic Cryptocurrency Trading is taught by professional Forex and cryptocurrency trader Petko Zhivkov Aleksandrov whose Udemy course enrolled 10,000 students in just one year .
Despite its advanced techniques, Algorithmic Cryptocurrency Trading is perfectly suited for both beginner and experienced traders. The course consists of 2.5 hours of on-demand video, one article, and 13 downloadable resources and can be easily accessed on Udemys mobile app.
Algorithmic Cryptocurrency Trading teaches students five manual and automatic strategies that diversify the risk between cryptocurrencies and remove emotions from the trading process. At the backbone of the course are five free, downloadable EAs that let users try advanced algorithmic cryptocurrency trading without any programming skills.
Algorithmic Cryptocurrency Trading costs just $99.99. At the time of writing, however, it was only $10.99 due to the specials Udemy regularly runs on its courses. The course includes full lifetime access, a 30-day money-back guarantee, and a certificate of completion.
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