With high hopes for the forthcoming bull run in 2024, the crypto world will surely welcome a lot of newcomers seeking to make a profit. For these curious newcomers, navigating the erratic market requires a great deal of caution and cunning. Hence, beginners need to learn the basics of crypto trading before entering the market. If you are a newbie seeking to enter the world of crypto and become an active trader, then you need this guide to help you understand how to trade crypto in 2024.
What is crypto trading?
Crypto trading is simply the act of buying and selling digital tokens to make a profit. For crypto traders, there are primarily two approaches to trading digital coins. These approaches include:
i. Spot trading
Spot trading involves the actual buying and selling of the crypto asset. With spot trading, you buy and sell cryptocurrencies at current market prices.
ii. Derivatives trading
In this kind of trading, traders don’t actually own the cryptocurrency. Rather, their work is to speculate on its future price trends via contracts, potentially gaining profits without ever needing to hold the cryptocurrency itself. This kind of trading is more risky since traders will be left with nothing at all if the trade doesn’t end well.
What should I watch out for while trading cryptos in 2024?
Before you learn how to trade crypto in 2024, you should know that trading these digital assets incurs a lot of risks and challenges. Here are a few things to watch out for while trading cryptos in 2024:
1. Volatility
By nature, cryptocurrencies are very volatile and this is one of their most attractive qualities, however, it also makes them very risky. Double-digit intra-day asset price swings are common in the crypto market, and drastic shifts can occur in just a few minutes.
2. Inaccurate patterns
Markets may sometimes follow trading patterns and may sometimes not follow them. So no pattern is guaranteed in the crypto market due to the volatile nature of cryptocurrencies.
3. Getting over-exposed
Don’t invest more money than you can afford to lose in the market. You can limit your exposure and try to set up “take profit” and “stop loss” orders to help limit your exposure if drastic swings occur.
4. Using excessive leverage
A considerable number of cryptocurrency exchanges offer users up to 100x leverage, which drastically magnifies the potential risks. The volatile nature of cryptos together with leverage trading, can cause positions to liquidate very quickly.
5. Unregulated, manipulated markets
The cryptocurrency market is primarily unregulated, unlike the traditional markets. Because of this, the market is susceptible to getting manipulated by well-moneyed “crypto whales” and other prominent influencers. In fact, crypto exchanges themselves are often accused of manipulating their own crypto markets against their own users.
6. Not knowing when to fold
Whether you’re up or down in the market, it’s very important to know when to fold. You have to figure out when to close a position and decide to either take profits or just cut your losses and move on.
Check this out: 5 tips for crypto trading today
What should I know before trading crypto in 2024?
Before you enter the crypto market this new year, here are a few questions to ask yourself:
a. Conduct in-depth research and seek advice from professionals to figure out whether crypto trading is suitable for you
As stated earlier, cryptocurrencies are an extremely volatile asset, and active trading them may result in significant losses. Hence, before you get started as a crypto trader, you need to understand how the crypto you want to buy works. Ensure that you read about the project and also explore the blockchain, observing different moves made by skilled traders. This way, you will be able to tell if crypto trading is suitable for your long and short-term investment goals. Also, don’t forget NEVER to trade an amount of money that you can’t afford to lose.
b. Decide whether you prefer to do long-term or short-term crypto trading
Crypto trading is generally divided up into 2 groups: long- and short-term traders. Both of these groups are very different and will require different trading strategies. If you want to buy and sell crypto assets within one year, then you are a short-term trader and should use a strategy that aligns with short-term goals.
However, if you plan to hold onto your digital assets for more than one year, then you are a long-term crypto trader and should choose a strategy that is suitable for long-term goals. Your duration in the market as a trader will determine the crypto strategy to use.
c. Learn how to place crypto trades and read charts
Before you start learning how to trade crypto in 2024, you need to have a basic understanding of how to place crypto trades and read charts. You can decide to take a course on how to read technical graphs and the fundamentals of the different order types anf how they work.
d. Choose an exchange and start trading
The last thing to do is to choose a suitable exchange for your crypto trading. When selecting a cryptocurrency trading platform, ensure that you consider factors like:
- What sort of order types the platform allows
- Whether the platform offers derivatives or leverage
- How easily the platform integrates with different cryptocurrency trading bots.
If you are a high-volume trader, you may also want to consider the fees charged by these exchanges and how they may affect your profit margins.
Step-by-step guide on how to trade crypto in 2024
Highlighted below is a step-by-step guide on how to trade crypto in 2024:
1. Sign-up on a cryptocurrency exchange platform
The first step is to sign up on a reputable crypto exchange platform that you can use to trade. To do this, you just have to provide your basic information and satisfy the Know Your Customer (KYC) requirements. Also, ensure that the exchange you use offers a wide variety of crypto tokens so it will be easy for you to diversify your portfolio.
Bitmama is easily the best crypto exchange platform for instant purchases and P2P trading. Download the app to get started now.
2. Fund your account
Once you have successfully signed up with a reputable crypto exchange, the next step is to fund your account on the exchange. You can do this through bank deposits, direct transfers, peer-to-peer (P2P), or any other supported payment method.
3. Invest in a cryptocurrency
After transferring money into your account on the exchange, you can choose the quantity of crypto that you want to buy to trade further and earn a profit.
4. Start trading
After purchasing a substantial amount of cryptos, you can now start trading your tokens according to your chosen trading strategy. You can buy or sell crypto on the Bitmama app through instant order or P2P.
5. Store your crypto asset safely in digital wallets
If you actively trade crypto, then you may need to store your cryptos on the exchange to have easy access to them. Also, you can buy an external crypto wallet and use it to store your tokens. Ensure that whichever wallet you decide to buy is very secure.
Fortunately, Bitmama app offers free wallets to its users to store over 10 cryptocurrencies.
What is the best way to trade cryptocurrency?
No strategy is considered the best way to trade cryptocurrency, as the best way to trade solely depends on the trader’s goals. A short-term crypto trader will need to adopt a different trading strategy from a long-term crypto trader. As such, you must focus on developing and implementing a trading strategy that aligns well with your needs.
How do I start trading cryptocurrency?
Start your crypto trading this 2024 by setting a trading goal and developing a proper strategy. This will make it easier for you to take the next steps, like choosing an exchange that meets your needs and figuring out which cryptos to trade.
You’ll love this: 3 effective trading strategies for crypto traders
Is crypto trading profitable?
Yes, trading cryptocurrencies can be profitable. In fact, some experienced crypto traders make a lot of money by just trading digital currencies. However, trading digital coins is also extremely risky and not appropriate for everyone.
Crypto markets are especially volatile, meaning it’s easier to accrue substantial losses, especially if you’re trading with leverage. Like any investment, don’t invest more than you can afford to lose.
With the forthcoming bull run, trading crypto is a good way to make money this year, especially for experienced traders. There are different trading strategies available for you to use, so you just have to pick the one that best aligns with your investment goals. Now that we’ve shared knowledge on how to trade crypto in 2024, remember to never trade with more money than you don’t mind losing. Also, consider talking to an experienced financial adviser before you start your journey of trading cryptocurrencies.
Bitmama offers a secure marketplace for crypto enthusiasts. Perform activities like crypto trading and creating virtual dollar cards for online payment. Get started today by downloading the Bitmama app.
