Cryptocurrency trading is a valuable investment opportunity, but how can beginners get started? Lesson two of this course will provide solid steps for turning crypto profits.
Cryptocurrency trading offers financial freedom, but beginners might not know where exactly to begin. In lesson number two of this course, we’ll walk you through the basic steps to start trading crypto. As you gain more knowledge on the concept, you can trade more strategically. Avoid the confusion, stress, and potential losses from trial-and-error trading by reading on.
Let’s start with an overview of what crypto trading is.
What is crypto trading?
Crypto trading is the buying and selling of digital currencies or tokens on an online exchange. Many cryptocurrencies run on decentralized blockchains, an advanced Web3 technology. Others are centralized. Cryptocurrency offers speedy transactions, anonymity, security, versatile practical uses, and potentially high returns. All of this makes crypto trading a lucrative opportunity.
How to Choose a Cryptocurrency Exchange
The cryptocurrency exchange that you choose to trade on makes all the difference. A crypto exchange is a platform (and business) where traders can open an account, make transactions, and start investments. It’s like a digital marketplace, where you can buy or sell crypto and enact your trading strategy. As a beginner trader, finding a crypto exchange that is easy to navigate and use is also an advantage.
Before choosing your crypto exchange, it’s important to consider the following factors:
Reputation: Ensure your exchange has a strong reputation and a track record for security. They should be transparent about their policies, processes, and technology with their users. Transparency is a strong principle in the crypto world, where a tight-knit community often supports each other. You can research reviews from other crypto enthusiasts or read through the exchange’s resources to ensure it’s trustworthy. Walbi is a great example - the exchange proudly links all their social media, including a Discord and Twitter (X) community. Traders can connect with other Walbi clients, and even receive news and announcements directly from the exchange.
Fees: One of the most attractive advantages of crypto trading is how it can suit any budget. Even if you only have $20 to spare - you can buy a percentage of crypto and gain exposure. However, some crypto exchanges nullify this benefit by charging high fees. You could receive charges every time you buy, sell, or withdraw crypto from your account. Many crypto exchanges, like Walbi, are the opposite - charging their users meager transactional fees. Walbi bases its fees on its users’ success. When traders make a profitable exchange, Walbi will charge a positively correlated fee. Walbi only wins when their clients win, showing just how dedicated the exchange is to helping users. They even use an AI solution to help manage liquidity and predict demand, which directs beginners in crypto towards the right path.
Supported Currencies: There are almost 23,000 cryptocurrencies in circulation! However, only a handful of these are among the most popular and widely used. Not every exchange has an extensive range of cryptocurrencies available to buy or sell. This can limit your investment opportunities, and hinder you from diversifying your portfolio.
An exchange should offer you a large number of currencies to choose from. Walbi, for example, offers Bitcoin, Ethereum, BNB, Litecoin, Solana, and more. Traders can even dive into stablecoins or swap their crypto for fiat currency. This range of options enables traders to use their crypto for different purposes and gain more value from their investments. Remember that crypto can even act as a practical daily payment method. You can transfer crypto to your friends, online shops, or even businesses.
Create an Account and Fund Your Wallet
Once you’ve chosen a cryptocurrency exchange, you can proceed to the next step: creating an account! Creating an account on Walbi is easy. You just need to download the mobile app or use the web app. There is so sign up required. All you need to do is connect your wallet to get started.
You don’t store your funds in the exchange - it’s kept in your digital wallet even after linking. This means you can keep full ownership and authority over your funds. To fund your digital wallet, you can transfer fiat currency (like US dollars) to it from your bank or credit card. Then, you can use that money to buy cryptocurrency. You can also transfer cryptocurrency into the wallet and linked account from another exchange or wallet.
Choose A Cryptocurrency to Trade
With thousands of cryptocurrencies to choose from, you must find one that you think will increase in value. When it comes to choosing a cryptocurrency, there are several factors you can analyze.
For example:
Market capitalization: Also shortened to market cap, this represents the total value of all a crypto’s coins in circulation. A higher market cap usually indicates how popular and in-demand a cryptocurrency is. For example, Bitcoin, the most popular crypto worldwide, has a market cap of almost $520 billion. This is compared to a still-popular but smaller crypto like Solana, with only a $8 billion market cap.
Technological innovation: The heart of a cryptocurrency is the technology and developer team behind it. Research the kind of blockchain solutions that your cryptocurrency offers. This includes the technology that you, as a trader, might want to use as your investment grows. For example, Bitcoin uses a consensus mechanism called Proof of Work (PoW). Crypto investors called miners use an extensive setup of computers to validate new blocks of Bitcoin.
Community: The size and activity of a cryptocurrency community are great indicators. A large, active community is a great sign that the crypto has the potential to succeed. This includes communication from the cryptocurrency developer team as well. Their customer support will reflect their dedication to leading the cryptocurrency to success.
Liquidity: The more liquid an asset is, the easier it is to enter and exit trades. Hence, you want to find a coin with high liquidity and an active market. This means you will never have trouble closing your deals or buying and selling crypto.
Monitoring these characteristics can help you make more accurate predictions about a crypto’s future performance.
There are several sites with the above data to help you keep track of your favorite cryptocurrencies. CoinMarketCap is widely considered one of the best in the market.
How to Place A Trade
With a cryptocurrency in plan and your exchange account active, you can place your first order.
Step 1: Go to the exchange and connect your wallet
First, go to Walbi.com to connect your wallet and navigate to the marketplace page.
Click the blue button to connect your crypto wallet or sign in via socials (Google or Apple)
Step 2: Deposit funds
If you have funds in your wallet account, you must deposit them to the Walbi exchange for trading. Click the blue deposit button to do so. You can alternatively buy crypto with fiat onramps on the Walbi platform (pictured below).
After clicking the deposit button, choose your deposit or purchase method.
Now, please wait for the transaction to complete from your wallet to the Walbi app.
Step 3: Choose a cryptocurrency to trade and pick buy or sell
Search for an asset or ticker in the search box (see the red arrow above and pick which cryptocurrency pair you want to trade. Then, you can specify the order that you want to execute (buy or sell).
PRO TIP: Advanced crypto traders can experiment with leverage market orders or limit orders. Read THIS ARTICLE to learn more about what those are and how to use them! Beginners can experiment with leverage too. Read the rest of the article to learn about it.
Step 4: Execute the trade.
Follow the red arrow in the screenshot to see where your positions and orders are located.
Once you’ve placed your order with all the required details, you wait for it to be filled.
It’s important to note that the crypto market is volatile. Prices might change between the time you place and execute an order - known as slippage. Please keep that in mind while trading crypto.
After the order is filled, check the left-hand column (see the red arrow above). There, you can track and manage all your open positions and orders.
Step 5: Store your cryptocurrency
When using Walbi, your crypto is automatically stored in the platform. This is great for active trading. However, it’s always recommended to store the majority of your crypto funds in an offline, cold storage wallet for maximum security.
Conclusion
Cryptocurrency trading is a valuable way to get involved with investing in digital assets. There are so many exciting new cryptocurrencies and crypto-related projects you can become part of. However, it’s important to understand the risks involved in trading before you stake assets. Choosing the right cryptocurrency exchange is one of the best steps to take in your trading journey.
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