What Is Crypto Trading And How Do You Trade Cryptocurrencies?

In anticipation of the 2025 bull run, Crypto trading is gaining prominence in Nigeria and around the world. While several traders are making a fortune, others are securing their positions to create the pathway to generational wealth. However, the secret to being a successful trader is to make informed decisions. In this article, I will answer the following questions: What is crypto trading, and how do you trade cryptocurrencies? Whether you are a crypto beginner or a veteran, this article is perfectly suited for you.

What’s Cryptocurrency Trading?

Cryptocurrency trading refers to the buying and selling of cryptocurrencies. It follows the same principle of trading—-buying at a low price and selling at a higher price to make profits.

Think of it like trading stocks. However, instead of trading the company shares, you are trading digital coins. It can be risky, as prices can change very quickly, but it also has the potential for big gains.

Smiles! The potential for creating generational wealth with just one crypto token is truly exciting and can be a major motivator for your journey into cryptocurrency trading.

How do cryptocurrency markets work?

Cryptocurrency markets are digital places where people buy, sell, and trade cryptocurrencies like Bitcoin or Ethereum. Unlike traditional currencies, cryptocurrencies are not controlled or regulated by governments or banks. Instead, they use a decentralized technology called blockchain, which is like a shared, secure digital record of every transaction. You will need a digital wallet to store your crypto.

What moves cryptocurrency markets?

Supply and demand dictate cryptocurrency prices. Their decentralized nature shields them from many economic and political influences affecting traditional currencies. However, several factors can also move the cryptocurrency markets. They include;

Supply and Demand

Like any market, the fundamental principle of supply and demand affects it. If there are more buyers than sellers, the price tends to rise, and vice versa. Some cryptocurrencies, like Bitcoin, have a fixed maximum supply. When there is less scarcity, demand, and price can increase over time.

Market Sentiment

Market sentiment is often because of media news and traders’ reaction. Fear of missing out (FOMO), recent adoptions, and whale network activities can cause buying frenzies, while panic selling, regulatory functions, and expert predictions can trigger sell-offs.

As a technological network, more advancements in blockchain, new features, or upgrades to a cryptocurrency’s network can attract investors and drive demand.

Regulation

Regulatory decisions can have a major impact on its price. For example, Nigeria’s ambiguity in crypto regulations creates uncertainty and discouragement as people can only trade via the peer-to-peer structure.

Competition

The emergence of new cryptocurrencies with innovative features can draw investors away from existing ones. In this era of newer projects and meme coins, alternative cryptocurrencies (altcoins) can outperform Bitcoin and shift market dynamics. Also, people see presale events as the perfect opportunity to get in early and make tangible profits.

Macroeconomic Factors

While cryptocurrencies are designed to be decentralized, they can still be influenced by broader economic trends, such as inflation or recessions. Changes in interest rates can affect investor sentiment and the flow of capital into or out of cryptocurrencies.

Whales

Whales are individuals or institutions that hold significant amounts of a particular cryptocurrency. Their buying activity can serve as validation, while their selling activity can increase the selling pressure.

Learn Why People Trade Cryptocurrencies.

People trade cryptocurrency for a mix of compelling reasons. It is a volatile market, and the potential for tangible profit is a major draw. For others, they are genuinely interested in the technology itself and the transformative power of blockchain and decentralized systems. The future looks promising, and cryptocurrency has shown how it can be a major part of this future.

How To Trade Cryptocurrency As A Beginner

In crypto trading, speculation is a key factor, with traders trying to anticipate market trends and capitalize on price swings. However, you need to understand the basics of crypto trading as a beginner.

1. Pick A Cryptocurrency To Trade.

Active traders want immediate gains within a short timeframe. They don’t mind the menial profits. Hence, they target the short-term gains. The HODLers, on the other hand, are in it for the long haul. They buy and hold the cryptocurrencies for a long period till they don’t believe in the token anymore.

To trade, you have to choose a cryptocurrency to trade. As a beginner, you can start as an active trader. Top considerations can include;

Bitcoin
Ether
Bitcoin Cash
Litecoin
Cardano

2. Open a Trading Account

You need a trading account to get started. Similarly, there is no obligation to fund your account until you are ready to trade. You can open an account with Binance, ByBit, or other credible platforms.

3. Find Your Crypto Trading Opportunity

This is the technical part of trading. You have to decide if a crypto token is poised for a price rally or otherwise. As a newbie, you can make informed decisions using Expert Analysis or Technical Indicators. You can decide to go long or short.
‘Going long’ means you expect the token’s value to rise. In this case, you are to ‘buy’ the market. On the other hand, ‘Going short’ means you expect the selected cryptocurrency’s price to fall, and you are to ‘sell’ the market.

4. Take steps to manage your risk and place your trade.

The cryptocurrency market can be volatile, meaning losses can happen quickly. To protect yourself, use a stop-loss order. This will automatically sell your position if the price falls to a level you specify, limiting your potential losses. You can also use a limit order to automatically sell and lock in profits when the price rises to your desired level.

5. Monitor and close your position.

Closing your position is to either sell or buy. Depending on the market sentiment, this action could be to “take profit” or “stop loss.”

Frequently Asked Questions.

Question 1: How do I start trading cryptocurrency?

All you need to do is create an account, carefully choose crypto to trade, and follow the instructions above.

Question 2: How much money do I need to start trading cryptocurrency?

You can begin with as low as $10 to get started. This low entry barrier ensures that cryptocurrency trading is accessible to everyone, regardless of their financial situation, and can be a great way to start your investment journey.

Question 3: What is the best way to trade cryptocurrency?

The best way to trade cryptocurrency is to make informed decisions. While this is not financial advice, it is advisable for a beginner to follow an expert’s analysis.

Question 4: What moves the cryptocurrency markets?

Supply and demand, market sentiment, and regulation are some of the major factors that impact the cryptocurrency market.

Question 5: Can crypto trading be profitable?

Yes, it can be. Similarly, it could go the other way and incur loss.

Question 6: Can I day-trade cryptos?

Yes, you can. Active traders sometimes day-trade to get small profits. Also, they are able to control how much loss they experience.

Conclusion.

Cryptocurrency trading offers endless opportunities, but success comes with knowledge and strategy. Whether you are a beginner or an experienced trader, staying informed is key. Start your crypto trading journey today, and check our blog page for more insights.