Cryptocurrencies are a virtual currency that cuts out the middleman. With no banks or governments controlling it, the speed of transactions is sped up considerably. Without centralized middlemen ready to take a cut out of every transaction, you are more in charge of your money.
Trying to get into crypto trading? We’ve compiled a list of everything you need to know.
Understand The Process
Wondering how it all works with nobody to check transactions? Well, the short version is that all the transactions are broadcast to a network, and this transaction needs to be verified by every single peer on said network. This is called a blockchain, and cryptominers are people who verify and record these transactions.
Mining used to be one of the most secure ways of earning cryptocurrency. However, due to the high level of competition and the huge cost of required hardware, it is much less accessible. That is where crypto trading comes in.
With only a small amount of capital, you can start investing and trading in cryptocurrencies. However, you have to stay on top of a lot of things: patterns of the currency’s value change, how interested large businesses are in it, and how the government’s regulations affect it. Only then can you get an idea of how to go about earning profits.
For many laypeople, however, this is a steep learning curve. Thus, the need arises for automated crypto trading.
Learn How to Automate Trading
Automated crypto trading occurs when computer programs carry out the trading process instead of brokers and middlemen. These programs are called bots, and there are many of them to choose from.
Eliminating the human element makes the process much faster. Bots don’t get tired from staring at a screen for hours. They don’t have mood swings. They are made to analyze the market and make the most efficient calculations, and they are scarily good at it.
Do Bots Really Work?
Logic states that if a bot could predict the decisions to earn you a fortune, why would people share them? The authors of Cryptohopper or Haasbot should have hoarded these bots and made millions. Why would they share them with you? Does that mean they don’t work?
The hype will have you believe that bots can do all the work for you. However, a bot is only as good as you can use it. Bots are an insanely powerful tool, but they are just that — a tool. They don’t have insider knowledge, neither are they aware of breaking news or a thousand other factors that determine the profitability of a market. You can’t simply set them up and forget them. That’s the secret. Find out more about trading bots from this Cryptohopper review.
Use Different Ways To Maximize Profits
This section will discuss a few simple strategies to help you maximize your profits from crypto trading.
Following the Trend
The most common strategy for beginners is to simply follow the trend. Following the decisions of others will give you insight and experience into how markets work. As a rule of thumb, sell when the market fails and store up when it seems to be flourishing.
Lending Coins Out
The crypto trading world works a lot like traditional banks. If you have coins and are unsure what to do with them, you can lend them out like loans. This helps you earn a passive income via interest.
Diversifying
You don’t have to invest everything in crypto. If you are knowledgeable about traditional stock markets, you should invest some money there. In an economic slump, you can buy a lot of stock for very little. Governments always have measures in place to revive the economy, and this means your stock value will also rise.
Why Should You Trade Crypto?
So, now we come to the most important question: Why trade in crypto? Here is a simple breakdown for you:
24/7 Open Market
Thanks to the lack of a centralized government or structure, the market is open all day, every day. Transactions happen directly between people, giving you unrestricted access.
Better Liquidity
Liquidity means how fast and easily a cryptocurrency can be converted into cash. Due to the decentralized nature of the market, your transactions will come through much faster and at a far lower cost.
Market Volatility
Because it’s relatively new, many people speculate on the market, making price fluctuations throughout the day very unpredictable. This gives you more chances to make a wider profit margin — with increased risk. Be sure to do solid research!
Final Thoughts
Trading in cryptocurrency is an exciting, rewarding, and profitable experience. The freedom and speed it offers make it popular, but please make use of all the tools available to you.
