Mastering Cryptocurrency Trading from Scratch: A Complete Beginner's Guide

Three Essential Points to Quickly Get Started with Cryptocurrency Trading

The core of cryptocurrency trading is simple - making a profit by buying and selling digital assets. But to truly make money, you need to: choose a reliable trading platform, learn to understand trading pairs and order types, and master at least one or two trading strategies. In addition, technical and fundamental analysis can help you make better decisions, while risk management is the key to surviving in the long term.

What is Cryptocurrency Trading?

Buying and selling cryptocurrencies on digital asset exchanges aims to make a profit from the price difference—this is the essence of trading de criptomonedas. Unlike traditional financial markets, the crypto market operates 24 hours a day, providing traders with more flexibility, but it also means you may face significant price fluctuations at any time.

There are thousands of cryptocurrencies on the market, but only a few are well-known. Bitcoin (BTC) and Ethereum (ETH) are the two with the largest market capitalization. Bitcoin runs on its own blockchain, while Ethereum is an open blockchain platform that supports various decentralized applications.

Long Position vs Short Position: Two Basic Operations

In cryptocurrency trading, there are really only two directions:

• Long: Buy an asset and wait to sell for a profit after the price rises.
• Short: Sell the asset first, expecting to buy it back at a lower price after the price drops.

Some people prefer to hold for several months or even years, while others frequently enter and exit. Your trading cycle depends on your own strategy and risk tolerance.

The choice of trading pairs is also crucial - you can trade cryptocurrencies with fiat currencies (such as USD, EUR), or you can trade one cryptocurrency for another. The choice of platform and cryptocurrencies will directly affect your trading experience.

Preparation Before Starting Cryptocurrency Trading

Step 1: Learn the Basics

Don't rush to spend money. Take time to understand the basic concepts of cryptocurrency trading — what an order book is, market orders and limit orders, how to calculate returns. There are plenty of free tutorials online, so recharge your knowledge before jumping in.

Step 2: Choose a suitable trading platform

A good trading platform should:

• Has a good security record and reputation
• Provide comprehensive user services
• There are strict funds security measures.
• Support for your region

For beginners, it is recommended to start with centralized exchanges. Once you have gained experience, consider moving to decentralized exchanges (DEX).

Step 3: Register an account and complete the verification.

Registering an exchange account is straightforward—fill in your email, set a password, and agree to the terms. However, most platforms require identity verification (KYC). You need to upload government-issued ID, proof of address, and other documents. Although the process is a bit cumbersome, it is to protect the safety of your funds.

Steps to Start Trading Cryptocurrencies

Deposit funds

After your account is registered, you can deposit fiat currency into the platform. Most exchanges support:

• Bank Transfer
• Wire Transfer
• Buy coins with credit card
• If you already have cryptocurrency, you can deposit it directly.

Important Reminder: When depositing, make sure to use the correct address. Bitcoin must be deposited to a Bitcoin address, and Ethereum must be deposited to an Ethereum address. If you make a mistake, you will lose everything, and no one can help you recover it.

Understand trading pairs and prices

Cryptocurrencies are traded in pairs, such as BTC/USDT (Bitcoin against Tether stablecoin) or ETH/BTC. The format of the trading pair is “what you want to buy / what you want to use.”

For example: The price of BTC/USDT shows 92,175 USDT, which means one Bitcoin is worth the equivalent of 92,175 US dollars in stablecoins. Want to buy 0.5 BTC? Just spend half the money. The good news is, you can buy a small part of Bitcoin for just 5 euros.

If it is a cryptocurrency to cryptocurrency pair, such as ETH/BTC, the numbers will be smaller. Currently, 1 ETH is approximately equal to 0.02285 BTC.

Understand the order book

The order book shows all pending buy and sell orders. It can tell you:

• Bid: The highest price that a buyer is willing to pay (arranged from high to low)
• Ask: The lowest price that sellers are willing to accept (arranged from low to high)

The order book reflects the real-time supply and demand relationship in the market, helping you to determine the possible price trends that may follow.

Master the two most commonly used order types

Market Order: Execute immediately at the current best price. Fast execution, but the price may not be what you ideally want.

• Want to buy quickly? Use a market order, and you will execute at the lowest selling price.
• Want to sell quickly? Use a market sell order, and you will execute at the highest buying price.

Limit Order: Specify the price you want and wait for it to be reached before the transaction is executed. The advantage is cost control, while the disadvantage is that it may never be executed.

• For example, Bitcoin is currently $100,000, but you only want to buy at $98,000. Set a limit buy order at $98,000 and wait. If it really drops to $98,000, your order will be executed automatically.

Four Major Cryptocurrency Trading Strategies

Day Trading: Daily in and out, high risk and high reward

Day Trading means buying and selling on the same day. This practice relies on technical analysis to capture small fluctuations within the day.

It sounds simple, but in reality, the risks are high. You need to monitor the market all day, the psychological pressure is great, and you have to pay a considerable amount in fees. Strongly not recommended for beginners to try.

Swing Trading: Holding positions for days to months, more suitable for office workers.

Swing Trading has a longer time frame, typically holding positions for several days to a few months. The goal is to capture medium-term trends and rebounds.

Compared to Day Trading, Swing Trading is much less stressful, as you don't have to stare at the screen every day, making it more suitable for people with jobs. This is the first choice for many beginners.

Scalping: Second-level trading, a true expert's gameplay

Scalping is the shortest-term trading, sometimes entering and exiting within minutes or even seconds. Scalpers make money by taking advantage of price differences or exploiting minute inefficiencies in the market.

Because the trading cycle is so short, the money earned each time is very small. Scalpers either need to trade in very large volumes or make dozens of trades a day to accumulate significant profits. This is even less suitable for beginners.

HODLing: Buy and hold for the long term

HODLing is not trading, it's investing. Holders believe in the long-term value of crypto assets, buying in and just leaving them there, regardless of price fluctuations. It could be held for a few months or even several years.

This strategy is the easiest and least stressful. It is suitable for those who believe in the long-term prospects of Bitcoin or other assets. As long as you can withstand short-term fluctuations, HODLing often yields considerable returns, especially for those who buy and hold Bitcoin.

Using Technical Analysis to Guide Trading

K-line chart basics

K-line chart (also known as candlestick chart) depicts price changes over a period of time using four data points:

• Opening Price (O): The price at the start of the period
• Highest Price (H): The highest price during the period
• Lowest Price (L): The lowest price during the period
• Closing Price ©: The price at the end of the period.

Each line on the 1-hour chart represents 1 hour of trading, while the daily chart represents an entire day. The same logic applies to any time frame.

support level and resistance level

• Support Level: When the price falls, there is a “floor” where there is usually a large amount of buying to catch the bottom, pushing the price back up.
• Resistance Level: When the price is pushing upwards, there is a “ceiling” where there will be a large number of sell orders hitting the market, pushing the price down.

Finding these key price levels is crucial for decision making.

technical indicators and tools

Common analytical tools used by traders include:

• Trend Line: Connects a series of highs or lows to see the direction of the trend.
• Moving Average (MA): Smooths price data to identify trends
• Bollinger Bands: Show the price's fluctuation range, possible support and resistance.
• Ichimoku Kinko Hyo: A complex indicator invented by the Japanese that combines multiple moving averages.
• Fibonacci Retracement: Predicts possible support and resistance levels based on mathematical ratios.

These indicators help you see the big picture and find the right timing for entry and exit.

Using Fundamental Analysis to Determine Long-term Value

The goal of fundamental analysis is to determine the true value of a crypto project. You need to study:

• Technology: Is the design of the blockchain good? Does it have practical applications?
• Team: Who are the developers and founders? What is their experience?
• Adoption Rate: How many people are actually using this coin?
• Ecology: How are the ecological applications and partners?

You can also check out crypto projects:

• On-chain data: Number of active addresses, trading volume, distribution of holders, etc.
• Roadmap and News: What is the project going to do next? Any major moves?
• Community and Development: Is the community active? How is the development progress?

The Path of Risk Management in Cryptocurrency Trading

No matter how good the strategy is, it may still incur losses. Learning to control risks is more important than anything else.

Only use spare money, set a stop loss

Golden Rule: Never invest money you can't afford to lose. Use “disposable income” for cryptocurrency trading, so even if you lose, it won't affect your life.

Setting a Stop Loss order can automatically close positions and limit losses. Setting a Take Profit order can automatically sell to lock in profits after earning a certain percentage.

Develop a clear exit plan

Before entering the market, you need to think about how to exit. Without a plan, it is easy to be driven by market emotions—chasing highs and cutting losses. A simple approach is:

• Sell half after a 20% increase
• Continue to rise, then sell 30%.
• Hold on to the rest for long-term gains.

Or use limit orders to automatically take profits. The most important thing is to stick to your plan.

Diversify your investments, don't bet on a single cryptocurrency.

Distributing money across multiple currencies and investment directions can reduce the fatal damage from a single collapse. Positions should also be reasonably allocated—such as 40% in large currencies, 30% in medium currencies, and 30% in small currencies. Regular rebalancing is necessary to prevent any single currency from becoming too dominant.

Advanced Gameplay: Use Hedging to Protect Positions

If you hold a large amount of Bitcoin but are concerned about a short-term decline, you can buy a “put option”—paying a small insurance premium gives you the right to sell at a certain price. If Bitcoin does drop, you can exercise this right. If it doesn't drop, you only lose the insurance premium and can still benefit from the potential upside.

Final Suggestions

The crypto market is full of volatility and opportunities, but also full of traps. To survive longer and earn more steadily in trading de criptomonedas:

• Keep learning and continuously improve the trading system.
• Prioritize risk management
• Record every transaction, identify your strengths and weaknesses.
• Flexibly adjust strategies based on market changes

Start small and gradually increase your position. Remember, long-term stable small profits are always better than a sudden liquidation overnight.