What is cryptocurrency trading?

The cryptocurrency market revolutionized trading worldwide, incorporating new digital assets that would make up several million dollars in transaction volume. The concept of decentralized tokens gave many users the opportunity to participate in these negotiations, thus establishing a strong supply and demand index within the crypto market.

Cryptocurrency trading is based on investing in these assets through a CFD (Contracts For Difference) trading account, or buying and selling the underlying cryptocurrencies in a trading market. The prices of these tokens are usually volatile, so those who buy/sell at the right time will get profits.

How to trade cryptocurrencies?

After understanding what cryptocurrency trading is, we have to know how to carefully carry it out. The first thing we must do to trade cryptocurrencies will be to subscribe to some Crypto Exchange company with policies that fit our needs as an investor. After having a fund trading account, we must analyze the market and look for long (buy) or short (sell) opportunities, in order to buy just before the price of an asset increases and sell before it collapses.

The profit margin obtained will be added to our balance once the price reaches our target. For example, if you place a long order on the BTC/USD pair at $8,000 USD and buy 1 BTC, you will earn every penny that increases from your entry price. When you reach your target price (For example, $8,500) you will be able to sell and make profit from the price variation.

Cryptocurrency trading methods

Cryptocurrency CFD trading (Margin trading)

CFD trading is based on buying or selling crypto derivatives. In other words, you are buying contracts underlying the real token, with the same value. For example: If 1 Bitcoin costs $10,000 USD, the perpetual contract of the BTC/USD pair will have this price. Even if you are not buying or selling the tokens directly, you will earn benefits as if you were.

CFDs are traded with leverage, which means that you can opt for a higher trading power than you really have. Your own, since the price can turn against you and liquidate your position. Your gains and losses will be calculated based on the size of your order. If you have $100 and placed a $10,000 order, you can earn (and lose) money as if you had $10,000 and not $100.

Buy and sell cryptocurrencies through a trading market (Spot trading)

The Spot market allows you to acquire cryptocurrency tokens and save them in their corresponding wallet. The idea behind this is to buy tokens at a good price to sell at the right time, making it more of an investment technique than trading. In addition to owning the tokens as such, this method is a bit more secure, as if the price challenges your analysis you will only need to be patient until the asset returns to an acceptable price and you can trade it without loss.

What cryptocurrency trading intends is that you deeply analyze the market to determine a solid trend, which will make us obtain better results.

Where to trade cryptocurrencies?

Depending on what type of cryptocurrency trading you want to carry out, there are different platforms that can be adjusted to your needs.

For cryptocurrency futures trading you can use companies like BitMEX, Binance Futures, Kraken Futures and Bakkt, while for margin trading it is preferable to use platforms like Bitfinex, Overbit and Bittrex.

In short, each exchange company offers different cryptocurrencies and market policies, so it is up to the user which one to choose. However, experience will make you decide with what type of platforms best suit your interests as a trader.

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The AltSignals writing team consists of experts dedicated to the world of finance and technology, with a particular focus on cryptocurrencies and forex. Our writers bring a broad range of knowledge and experience, cultivated through years of arduous and direct involvement in financial markets, as well as intense technological collaboration.

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At AltSignals, we believe that transparency and education are the key to empowering our readers. Therefore, our content is meticulously researched to ensure its accuracy and thoroughness. Each of our articles is created with the aim of providing educational insights and in-depth analysis, helping both beginners and experienced traders.

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Our mission is to provide analysis that informs as well as guides users and enthusiasts through the complexities of the cryptocurrency and forex markets. In line with our motto of “quality over quantity”, we guarantee that only the highest quality trading signals are published.

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