My Crypto Trading Experience
Despite how recently they appeared, and although many financial experts warn against investing in them, cryptocurrencies have still taken up a large space on the economic scene and, on the back of their strong gains, drawn the attention of every kind of investor.
If you want to know what other traders went through in the cryptocurrency market before trying it yourself, keep reading. Easy Trade will walk you through its own experience with crypto trading. Ready to hear the story? Let’s go.
My Experience With Currency Trading
Before I explain the details of my experience with currency trading, I should cover a few terms tied to the process. Currency trading simply means buying one currency against another.
In the foreign exchange (forex) market, a trader speculates on a pair of currencies rather than on a single currency by itself.
You buy one currency against another, so a forex trader speculates on a currency pair, not just one currency on its own.
Here is an example to make the idea clear: when a trader operates in the currency-pair (forex) market, they might buy the British pound against the US dollar, aiming to profit from the difference in price.
Currency prices in the foreign exchange market are set by supply and demand, and the price difference between the two currencies is known as the “spread”.
Now let’s talk about cryptocurrencies and explain what these widely discussed digital coins actually are.
Cryptocurrencies: a group of encrypted, intangible digital currencies. They have no physical existence and behave more like data and digital assets.
Cryptocurrencies can be traded between people all over the world, and trading them tends to be faster than moving cash currencies, which go through banks.
That is because cash transfers require certain conditions, such as a minimum fee and so on, while cryptocurrencies need no such conditions and require no intermediary during trading.
Now that we have covered the basics, let me explain my own experience trading currencies.
The Main Steps I Followed in My Currency-Trading Experience
At first I treated currency trading like a part-time job: I set a fixed start time and a finish time, allowing a window of roughly 5 to 6 hours.
Before I started, I looked into other traders’ experiences and the main opportunities and methods they recommended. I also studied the market carefully and kept up with political and economic developments, since these affect trading heavily.
I bought a coin through one of the trusted trading platforms, the best known being Binance.
Professionals in the crypto field advised me to move the coins I bought into my own digital wallet, which is similar to a flash drive. That keeps the coin stored safely and separate from the trading platform, and when you decide to sell you move it from your personal wallet back onto the platform.
From my experience, I found that trading platforms act as intermediaries and are handled in much the same way as banks.
There are several conditions when you open an account: you have to provide your real details and your ID, along with other checks the platform sets to confirm you are a real person with valid documents.
I followed a strategy of picking a safe, well-reputed platform, given how many platforms have appeared, each one promising quick wins and fast profit.
My advice is to stay away from any platform that promises you fast profit, because that is a sign of a scam. No platform can hand you a quick profit; at best it helps you manage the risks of trading, especially in cryptocurrencies, which are riskier than most other types of trading.
To answer a question many people ask, does crypto trading let you make large profits? A rise in a cryptocurrency’s market value can produce gains, but that depends on how much you invest, and the price can move against you just as easily.
My advice: do not put in all of your savings, your tuition money, or money you need right now, because you could lose it. Only invest money you would not be upset to lose if it went against you.
Some financial analysts say that, when trading currencies in general, the amount you invest should not exceed 10% of your savings.
In the end, yes, you may profit and you may take a loss, so you should expect losses just as much as you expect gains.
The Best Ways to Trade Currencies, From My Experience
Before I went into currency trading I did a lot of research on the best methods, and here is what I found.
Trading Through the Exchange
Trading currencies through the exchange is one of the oldest and best-known methods.
It is very similar to trading ordinary stocks: you wait for the economic swings over the day or the week that affect a currency’s price.
So, from my own experience, I would use a rise in a crypto coin’s price to sell it, or hold it when its price is falling. I also prefer to trade shares of companies whose core business is permissible and that do not place part of their money in interest-based banks to earn interest.
Trading Through Futures Contracts
This is a process in which currencies are traded at a set price to be delivered in the future at a specific, agreed time.
This type is called derivative contracts, because the financial value of the instruments being traded is usually derived from other assets of some kind.
Trading Through Binary Options
This type works through two choices. First, you set the expected price of the currency over a certain period; when that period ends, you have the option to buy the currency after its value has risen.
Second, you do not complete the purchase if the currency’s price is far below what was expected, though most people prefer to hold their currency positions rather than sell.
The Best Currency-Trading Platforms
Binance
Binance is one of the strongest and best-known currency platforms. It carries a large number of coins, especially newer cryptocurrencies.
Its main advantages: it is easy to use, highly secure, the fees charged on coins are low, and it supports many languages, including Arabic.
The platform holds a large number of cryptocurrencies, especially newer encrypted coins, and its transaction fees are very low compared with other platforms.
FXTM
This platform has attracted more than 2 million clients from 150 countries since it was founded, and it specializes in leveraged trading.
It lets traders take positions whether prices rise or fall, across forex and indices as well as commodities, stocks and cryptocurrencies.
IC Markets
This platform is a global broker for trading contracts for difference (CFDs) on forex. It was founded in 2007 in Sydney, Australia, offering raw-spread pricing and solutions aimed at active traders.
The company states that its goal is to close the gap between the features and tools available to individual traders and those of large institutions, creating a strong trading environment.
Key Rules for Currency Trading
Be careful when following the news. Keeping up with economic news matters for tracking the market and reading its direction, but constant monitoring can confuse you and push you into a wrong decision, so treat it with care.
Plan well. Good planning is one of the most important steps a trader should take before entering the market; it helps you anticipate the possible outcomes and prepare for them.
Expect losses as much as gains. When you start trading, do not think only about the large profits of the forex market. Yes, it can be profitable, but in the end you are putting your money into a risky market, so you should expect losses just as you expect gains.
Advantages of Trading in the US Market
It has the largest exchanges in the world: it is home to the biggest exchanges in the world, the New York Stock Exchange and the Nasdaq, which makes it easier to buy and sell US-listed stocks on the public market, such as Amazon, McDonald’s, Nike, Wal-Mart and others.
A huge market with constant liquidity: although the total value of the US stock market swings a lot each day, since it depends on buy and sell volume, the total value of the US stock market exceeded $53 trillion on December 31, 2021.
It holds shares of the world’s strongest companies: the strength of the US economy comes from having leading global companies with high market value, such as Amazon, Tesla, Microsoft, Facebook, Apple, McDonald’s and Starbucks.
To close, the experience I have shared here is a personal one. You are not obliged to follow it when you start trading, but it is important to understand all the details of the market before you go through it yourself.
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