A complete cryptocurrency guide for beginners

Over the past several years, cryptocurrencies have grown in popularity; as of 2018, there were more than 1,600 of them! Furthermore, the number keeps rising.

Over 10 crore Indians, according to a recent newspaper story, are cryptocurrency owners. Cryptocurrency trading is nevertheless rife with risks and difficulties, much like trading in stocks and commodities. Market aficionados must create tactics that may make trading exciting and secure at the same time if they want to reap the long-term rewards of cryptocurrency trading.

However, let's first establish the fundamentals of the trading instrument before analyzing the tactics for trading cryptocurrencies.

What is cryptocurrency?

Cryptocurrency, sometimes known as crypto-currency or crypto, refers to any type of virtual or digital currency that employs encryption to protect transactions. Without a central issuing or regulating body, cryptocurrencies use a decentralized mechanism to track transactions and create new units.

The very first cryptocurrency was Bitcoin, which was created in 2009 and is still the most well-traded today. The primary reason people are interested in cryptocurrencies is to trade them for profit, with speculators occasionally driving values extremely high. You can find some of the best apps for cryptocurrency in India.

Traditional Currencies vs. Cryptocurrencies: The Future

A normal online money transfer can go wrong in many ways:

The financial institution may be experiencing a technical problem, such as a system outage or malfunctioning equipment.
There may have been a breach of your or your friend's account, such as a denial-of-service attack or identity theft.
The transfer limits on your or your friend's accounts may have surpassed.

And the center of these issues is: Bank

Because of this, cryptocurrencies are the form of currency of the future.

Imagine a similar exchange taking place between two users of a bitcoin. When someone is ready to send bitcoins, a notice asks them whether they are sure. If so, processing begins: The system verifies the user's identification, determines whether the user has the necessary balance to complete the transaction, and so forth. The payment is then transmitted, and the funds are deposited into the recipient's account. Within a few minutes, everything is cleared.

Cryptocurrency removes the problems that are usually experienced when transacting through modern banks.

Cryptocurrency trading strategies

Let's now reel back and start talking through tactics that can provide you favorable results when trading in crypto.

High-Frequency Trading (HFT)

Quant traders utilize a type of algorithmic trading approach called HFT. This entails creating trading bots and algorithms that provide speedy entry and exit from a cryptocurrency asset. Such bots require the development of sophisticated market concepts as well as a solid foundation in mathematics and computer science. As a result, experienced traders would benefit from it more than newbies.

Range Trading

Market participants often look to seasoned experts, who provide daily levels of support and resistance. A price above the present price is referred to as a "resistance level" since it is the highest level at which the price may climb. Contrarily, a "Support" level is one below which a cryptocurrency price is not intended to fall; as a result, a support level is always lower than the present price.

Day Trading

This trading method entails placing trades and closing them on the same day. A trader who uses such a strategy hopes to profit from intraday price fluctuations in the cryptocurrency of their choosing. Investors frequently use technical indicators to determine entry and exit points for specific cryptocurrencies to execute trades successfully.

Scalping

To book profit, this trading method uses higher trading volume. Despite the danger, a smart trader observes the margin requirement and other crucial guidelines to prevent negative trading outcomes. Scalpers research the cryptocurrency asset, historical patterns, and volumes before deciding on an entry and exit position within a day.

Although cryptocurrency is quite popular right now, keep in mind that it is still in its relative infancy and is seen to be highly speculative. Be ready for obstacles while making a new investment. Do your initial investments and research cautiously if you choose to join the crowd of crypto traders.