What to Look For When Trading Cryptocurrency?

Cryptocurrency trading became very popular in recent years as virtual currencies continue to attract a larger number of investors. The crypto market is expanding and many new users are trying to understand what they can do when trading cryptocurrency. 

In this post, we are going to be describing what cryptocurrency trading is, what you can expect form it and how it can help you earn some additional funds at the end of the year. Take into consideration that the market is very volatile and this could be risky but also an opportunity to bet on price movements in different digital assets and trading pairs. 

Disclaimer: this is not investment advice. We are not financial advisors. Never invest more than what you are able to lose. Always contact a professional financial advisor. This post is for educational purposes only. 

What is Cryptocurrency?

Cryptocurrency is a kind of asset that was created back in 2008 and it has been since then operating in a wide range of ways. There are more than 7,000 different cryptocurrencies in the world with Bitcoin (BTC), Ethereum (ETH) and Litecoin (LTC) being among the most popular.

Users can buy and sell digital assets when they want using exchange platforms. These online platforms are very useful also for traders that want to speculate with price fluctuations in the market. 

What to Look for When Trading Cryptocurrency?

If you started to trade in the cryptocurrency market and you do not know what to expect from it, then we have some tips that can be useful. Before we start, you should know that trading is a risky activity and you can lose all your funds. Thus never invest more than what you are able to lose. 

You can analyze the cryptocurrency market and different trading pairs. Some of them are going to help you get some profits on your trades. You can earn some money when trading in the market and in just a few hours. If Bitcoin skyrockets in 1 hour by more than $1,000 then this is certainly going to be a great opportunity for you to register gains. 

But there are different trading strategies that you will be able to implement and follow. For example, you can start daytrading if you are a user that has the time to do so. Be prepared to be looking at charts on a regular basis. You will be in front of a screen all the time analyzing trends, buying moments and exit points. 

Daytraders enter and leave the market on a daily basis trying to profit from fluctuations in the price of digital currencies. Daytraders are going to be happy with just a small profit that would allow them to end the day in green. 

You can also be a swing trader. This will give you more time to analyze the trend and understand how to better close your position with profits. You are not going to be worried on a daily basis about what will happen but instead you will be patiently waiting for the best moment to sell. 

However, swing traders will not way more than just a few weeks to close their positions. In general those users and traders that close their position in longer periods of time and considered to be holders rather than traders. 

Holders tend not to trade their funds because they do not feel comfortable doing so or because they do not make good and accurate decisions. Instead, holders tend to keep their funds for several months and years until they see the price of their digital asset has reached the price they were waiting for. 

At the moment, there are many crypto holders that are waiting for Bitcoin to reach $100,000 or Ethereum to skyrocket to over $2,000. In addition to it, Litecoin holders would like to see their coin surpassing $400. 

Conclusion

This post aimed at sharing with you which are the different possibilities the crypto market is now offering to users. Individuals can start day trading, swing trading or hodling for long periods of time. Their strategies are going to depend on what they are looking for, the time they can use or what they try achieving with their investments. 

There are thousands of virtual currencies in the market that would allow users to create a diversified portfolio. Furthermore, if you are a traditional investor, Bitcoin, Ethereum and Litecoin could be some of the coins you would select to expand and diversify your portfolio.