Photo by Tima Miroshnichenko from Pexels

There is no other industry that can bring you huge profits in less time compared to crypto. That’s why there are many people who are putting their money in hoping for profits.

But the crypto market doesn’t only bring profit, but it also brings a huge risk. Hence, as a new investor or trader, you have to be careful with your steps. So the question is, how to become a successful crypto trader?

To help you out with this question, crypto experts from research platform TheMoneyMongers.com have shared a couple of points that you should keep in your mind while you start trading crypto.

Things to Learn Be a Successful Crypto Trader

1. Use A Reputed Exchange

Before you start trading crypto, the first thing you need to do is choose a reputed exchange. It is extremely important because of a wide range of reasons. Among them, the top reason is definitely security.

We have seen multiple news stories in the past where hackers looted billions of worth of cryptocurrency from exchanges. And you surely don’t want the same thing happening to you.

Apart from security, you need to look for an exchange that supports almost all the known cryptocurrencies and not a few ones. This gives you variety, and you would be able to trade in multiple pairs.

You also need to look for trading and withdrawal fees. If the trading fee or withdrawal fee is way high, then you would be paying a majority of your revenue as trading fees only.

2. Use Cold Wallet to Store excess funds

One of the best ways to earn money out of crypto is to HDOL or hold. But keeping your digital assets in your crypto exchange wallet can be risky. Or, if you are planning to hold your digital assets for a longer period of time, then cold wallets are the best option.

Cold storage is the best way to hold cryptocurrency offline. As a result, hackers will not be able to access your assets in any manner.

3. Have accounts on Multiple exchanges

Another way to earn money on crypto is arbitrage, and for this, you will need to have accounts on multiple accounts.

Talking about arbitrage, it is a concept of selling your crypto from one exchange to another. As you probably have noticed that different exchanges have different prices for the same crypto coin.

As a result, you can transfer your coins from one exchange to another and sell your crypto coins at a profit.

Also, by having multiple accounts on different exchanges, you would have the opportunity to trade in a wide range of coins and currency pairs.

4. Choose between Spot or Derivatives Trading?

Spot trading is the most basic trading activity you can do in a crypto market. This means you are purchasing cryptocurrencies and holding them for future profits. Also, you are free to buy/sell your crypto assets against any FIAT currency.

On the other hand, there is Derivative trading which is also known as trading of leverage contracts. It is a bit different compared to spot trading.

In this case, you don’t own any crypto assets. Instead, you need to trade contracts. For instance, if you are considering a BTCUSD contract, then when you are trading it, you are not really buying Buying/Selling Bitcoin.

But the value of the contract is designed to follow the price of Bitcoin. This means, if the price of BTC rises or drops, it will affect the value of the contract.

The benefit of this one is that it provides you the highest liquidity. Plus, you can sell derivatives short, which can be pretty useful for making profits when the market goes down.

5. Learn about market analysis

Lastly, you should learn about market analysis. When you know how the market operates, making a trading decision would be easier for you. One of the popular market analyses is known as technical analysis, which is to predict the market move based on previous data.

But apart from technical analysis, you should also have knowledge about fundamental analysis. Plus, you need to find good sources to gain news or information about the crypto market.

Also, as you start trading, you should focus on learning about trading strategies. You need to learn how to use different tools and indicators, and other methods. For instance, when it comes to trading indicators like RSI, Bollinger Bands, candlestick patterns are among the highly used ones.

You should have proper knowledge about these indicators and how to use them accurately to predict the market move.

Final Words:

So that was the answer to your how to become a successful crypto trader question. Overall, you must understand the market and predict how it is going to move. Only then you would be able to make profitable trading decisions.