How To Make Money Online Trading Cryptocurrency
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Trying to invest in crypto can be overwhelming with so many different crypto coins, advice, and strategies out there. It’s hard to even know where to start.
Let’s get started the first thing I want to show you guys is how much money you can expect to gain or lose from trading cryptocurrency on a daily basis. Even with massive selloffs and market dips, you can still make lots of money as long as you have the right strategy.
I know it’s really harsh and pressuring if you’re a beginner in this game experiencing these massive selloffs and price manipulation for the first time. I too felt the same way when my portfolio was like dropping down ten thousand dollars in one day.
But if you change your mindset from I’m going to panic sell, to how can I maximize the opportunity of these market discounts right now, that’s when you actually learn to play the game strategically.
So don’t narrow yourself down to the short-term gains or short-term losses. But also look at the bigger picture and what you can learn from it.
With that in mind, I also wanted to show you websites where you can look up all the prices of different cryptocurrencies, the markets, and what trends are currently happening.
There is a website called coin market cap and I use it almost every day to analyze where the markets are at. It’s also a great place to discover new cryptocurrencies because there are thousands of different coins to choose from.
Alternatively, you can also check these prices at coin gecko, coin base, binance, or even coin desk. One of the biggest mistakes that I see beginners make when investing in crypto is by simply looking at the price for one bitcoin which looks way more expensive than two dollars for one cardano for example.
The truth is, it’s really important to look at the total market cap and how much the markets are moving on a 24-hour chart, and on a seven-day chart.
What I like most about coin market cap is that it displays these numbers in a very clear and elegant way, and you can also press on it to see which coins went up the most in the past 24 hours.
It also shows which coin sold the most in the past 24 hours, and you can do the same thing for the seven day chart. I highly encourage you to play around with it because it can be beneficial when you’re trying to see what time or momentum, is the best to buy a certain cryptocurrency to maximize your gains.
What cryptocurrency should you invest in? Or which one should you buy especially if you have a limited budget to spend? I think there are two main areas to this.
The first area is to buy the most common and most popular cryptocurrencies and on this level, I think we have two main cryptocurrencies those are bitcoin and Ethereum.
The main difference between bitcoin and Ethereum is that bitcoin sort of acts like gold, whereas, Ethereum is sort of like electricity. This is because Ethereum is a ledger technology that companies are using to build programs.
Both bitcoin and Ethereum operate on what is called blockchain technology. However, Ethereum's blockchain is known to be far more robust and advanced.
The second area is to buy altcoins and emerging coins. Usually, these coins are less popular, lower in market cap, or they can even be newer coins which makes them more risky.
Personally, I hold both bitcoin and Ethereum and I also have a portion for portfolio and small cap altcoins. But currently, the majority of my portfolio more than like 80% of it is in bitcoin, Ethereum, and cardano.
What strategy should you use when investing in cryptocurrency? I think the very basic strategy that’s easy to understand, effective and that’s most commonly used is playing long-term versus short-term. There’s also leverage trading.
How does leverage work?
Leverage is a key feature of a cryptocurrency trading platform and can be a powerful tool for a trader. You can use it to take advantage of comparatively small price movements, ‘gear’ your portfolio for greater position size, and to make your capital grow faster.
Leverage works by using a deposit, known as margin, to provide you with increased exposure. Essentially, you’re putting down a fraction of the full value of your trade and the trading platform is providing you with the rest.
As a trader, this allows you to gain exposure to major cryptocurrencies, such as Bitcoin and Ethereum and others without tying up lots of your capital. You can access a vast array of trading instruments and build a diverse trading portfolio, without tying up lots of capital.
BTC/USD trade example;
For example, you want to buy 10 Bitcoins at a price of $10,000. To open such trade with a traditional exchange, you would be required to pay 10 x $10,000 for a position of $100,000 (ignoring any commission or other charges).
If the Bitcoin price goes up by 5%, your 10 Bitcoins are now worth $10,500 each.
If you choose to sell, then you’d have made a $5,000 profit from your original $100,000 investment.
With 1:100 leverage trade;
Here you’d only have to pay 1% of your $100,000 position or $1,000 to open such trade. If the Bitcoin price rises by 5%, you would still make the same profit of $5,000, but at a considerably reduced cost. That means that profits can be hugely multiplied.
Trade Digital Currency, Indices, Commodities with up to 500x leverage. Actively trade the most popular cryptocurrencies such as Bitcoin, Ethereum, Ripple, Litecoin, and more. Profit from market rallies and declines, or hedge your existing cryptocurrency holdings.
Short-term trading basically means that you make trades quick. You buy and sell and your profits are garnered within a matter of days or even hours.
Comparatively, long-term investing means that you’re not too concerned about how the market crashes in like the past six hours for example. This is because you’re invested to check maybe every month or for the next year or the next 10 years.
You just leave it there. In this case, most people hold bitcoin as a long-term investment because it’s been here for the longest time ever. With the long-term strategy, the benefits include saving a lot in trading fees and having an easier time with less emotional trading.
You could also make a lot of money over time without having to watch over it. But the risk is that it’s hard to predict the future of any cryptocurrency. This is because the markets move really fast. The cryptocurrency market is really volatile, and therefore, you could also lose a lot of money.
Some short-term trading strategies may include scalping day trading and swing trading. But the main premise behind short-term strategies is that you’re always staying informed about the latest crypto news, the market the value of crypto, and you know what’s happening with those prices.
With this information, you’re more active. Personally, I use a mixture of both long and short-term strategies. Right now, about 40% of my crypto portfolio which consists of mostly bitcoin is invested for the long-term in the next 10 years.
Whereas the other 60% of my portfolio is used to do active trading and strategic moves in the market. I also have this rule where I move a portion of my active profits to the 40% of that long-term investment.
This is to build up my investment and make more money in the long-term. I think the reason this strategy really works for me right now, is because I’m actively involved in the markets and the crypto space. This helps me profit for the short-term and it also helps in better risk management.
How can you get started investing in cryptocurrency? There are two main things that you need. You need a wallet to store your cryptocurrency and you need an exchange that you can buy and sell those cryptocurrencies.
Most major cryptocurrencies have wallets that allow you to store your crypto coins within the exchange. For example, I personally use binance to store my bitcoin and you can also use coinbase if your country is supported by the app.
There are also lots of other cryptocurrency exchanges that you can use but those are the two most popular exchanges as of right now.
Now in practice of course you want to secure your account and do things like enable two-factor authentication. And if you want to add an extra layer of security, you can buy things like cold physical wallets if you have millions of dollars worth of bitcoin.
At the end of the day, I think the crypto space is one of the largest opportunities we have that is going to make a lot of people rich and I want you to be part of this journey.
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