A complete guide to learning crypto trading is crucial for beginners or for those who are considering delving into the world of digital assets.
Moreover, in recent years crypto prices have constantly increased rapidly in line with the development of digitalization technology.
For a record, nowadays crypto trading has become one of the profitable investment instruments which attract lots of enthusiasts. That’s because many people have gained huge profits from crypto.
However, high gain, high profit also applies in crypto. In line with the huge profits traders or investors can obtain, comes high risks in crypto trading. However, this does not turn down the interest of people to go in for this investment instrument.
For crypto trading enthusiasts who want to try their luck as a trader, let’s take a look at the following guide.
Learning Crypto Trading : What is it about?
Crypto trading is basically similar to stock trading. The difference is in the asset or object of the transaction. In crypto trading, the asset is of course in the form of crypto.
To date, there are several crypto assets that are popular and have high prices—even reaching hundreds of millions of rupiah— including Bitcoin, Ethereum, and so on.
In trading activities, each trader will buy and sell (trading) crypto assets they own. However, keep in mind that crypto assets have a very high level of volatility so traders, especially beginners, must understand the risks that may occur.
Unlike the stock market, the crypto market is open 24/7 or around the clock. Therefore, if you enter crypto trading, you must consistently monitor price fluctuations or changes.
Get Familiar With Cryptocurrency
Basically, cryptocurrency or crypto asset is a digital asset that uses a public ledger with strong cryptography to secure online transactions that take place in it.
This crypto asset works by utilizing blockchain, which is a decentralized technology with functions to manage and record crypto asset transactions.
What’s interesting about the blockchain technology is the level of security. The CoinMarketCap site notes, so far there are more than 10,000 types of crypto assets listed and traded publicly.
How Crypto Asset Works—Learn Crypto Trading
Regarding how crypto asset works, since it is supported by the blockchain, the ledger of every crypto asset transaction on each node that drives the blockchain will be stored by the blockchain.
Nodes are computers that are connected to a blockchain network for mining crypto assets, such as Bitcoin. If any of the miners try to enter a fake transaction then the transaction will be cancelled by the correct ledger.
For information, the correct ledger is determined by most record miners. Meanwhile, to make transactions or trade using crypto assets, you must have a set of public and private keys.
Both keys are passwords generated by your crypto asset wallet. This public key is linked to your wallet address and can make it easier for anyone to send crypto assets to you.
Meanwhile, the private key will be used to approve transactions sent from your wallet and only you have access to your private key
Advantages of Investing and Trading Crypto Assets
The main advantage of crypto trading lies in its high profitability.
In addition, crypto can be learned easily and it will also provide significant profits, especially if you are familiar with the trading strategy.
Another advantage of crypto trading lies in its guaranteed level of security. Thus, you do not need the help of a third party to transact crypto.
In addition, as mentioned earlier, the trading time of the crypto market is also not limited. This makes it different from the stock market because the crypto market is open 24/7.
Learn Crypto Trading: Why Are Crypto Assets Important?
So, why is this crypto asset so important at this time around? Here’s why:
- Crypto assets are becoming an important part of technological innovation.
- Crypto assets are still in their infancy (development in a more advanced direction).
- Crypto assets have the potential to change another line of industry.
- Crypto assets have a promising future.
Terms Frequently Used in Crypto Trading
When trading crypto, you will come across a number of terms that are often used in it. Here is the review.
- Coin: a crypto asset created using encryption techniques so that it can be stored for a long period of time. These coins usually have their own blockchain. For example: Bitcoin, Ethereum, and others.
- Altcoin: this term stands for all types of coins other than Bitcoin. Altcoin is an acronym of “alternative coin”. The purpose of its creation is an effort to improve a number of shortcomings in Bitcoin.
- Token: is an access token from a decentralized application built on a blockchain system. Not only as a means of payment, tokens are also created for certain features made by related crypto projects.
- Decentralization: decentralization is a transaction that does not involve a third party. This type of transaction is usually peer-to-peer.
- DeFi: an abbreviation of decentralized finance, this means the move from a traditional/centralized financial system to a peer-to-peer financial system enabled by decentralized technology.
- DApps: stands for decentralized applications, these are applications (digital programs) that use blockchain technology and are decentralized.
- Gas: costs incurred when using the Ethereum network. Usually, this gas fee varies, according to the traffic in the block processing process.
- Halving: this occurs when the reward received when mining cut in half. Referring to the Bitcoin Halving Day, this occurrence will take place every 4 years.
- Wallet: is a place where traders store all their crypto assets.
- ICO: Initial Coin Offering or ICO is an effort made to obtain investment in order to increase capital. The ICO is done by launching a new coin on the blockchain.
- Mining: the process of mining or finding new crypto assets to be circulated to the crypto asset market. Mining requires powerful, high-powered computers to solve complex and complex mathematical problems.
- Staking: a way to make profits in the world of digital assets by storing crypto assets to earn some interest.
Mistakes Often Made by Novice Traders
Novice traders, who have not mastered crypto trading techniques, often make these mistakes when trading crypto. Here are some of them.
1. Giving Up When Suffering From Losses
A common mistake and often made by novice traders is to give up quickly when they have just suffered from losses. For beginners, suffering a loss will greatly impact their emotional aspect.
2. Failed to Maintain Balance
Crypto novice traders often fail to maintain the balance of their portfolios. If that condition occurs, they must immediately rebalance their portfolio, by returning the assets in accordance with their planned asset allocation target.
3. Taking Too Many Risks
Novice crypto traders usually take too many risks. In terms of crypto assets trading, every trader thinks of getting as much profit as possible.
As a result, they will also take a lot of risks in hope of earning high profits. This is fatal as it can result in great losses instead.
4. Fear of Missing Out (FOMO)
Novice crypto traders are often trapped in the Fear of Missing Out (FOMO), in the sense of following the market trends too much. Usually, experienced traders will stay away from assets that attract too many enthusiasts.
This strategy is also considered very smart because focusing too long on an asset keeps traders away from other opportunities.
How to Invest Crypto Assets
Here are some ways to invest in crypto assets that you can try as a novice trader.
- Find a Trusted Crypto Exchange
First, if you want to invest in crypto assets, you have to look for the best and most trusted crypto exchanges, one of which is Indodax.
- Deposit Funds
If you have created an account on a trusted crypto exchange, then you can start deposit funds in the account you created.
- Pick Crypto Assets
There are thousands of crypto assets that you can choose from. You can pick assets that can make you gain profits.
- Choose Strategy
Next, you can choose a trading strategy. This is also an important step in learning crypto trading.
- Store Crypto Assets Safely
You also have to store crypto assets in a safe place. In this case, you can choose a digital wallet in the form of software.
- Do Buy and Sell Transactions
If you already have crypto assets, then you also have to consistently check the price movement.
Check out other recent articles about the world of digital assets only at Indodax Academy.