Crypto Trading: Complete Guide to Success in Crypto Trading
The Stock Exchange offers a wide variety of financial opportunities: forex, stocks, indices, commodities or even crypto currencies. CFD brokers compete with innovations, attractive commercial offers and qualitative services to offer a pleasant and profitable stock exchange experience.
In this guide, SafeNetTrading takes an interest in the issue of crypto trading. How does it work? How to choose the best forex broker to trade crypto? What investment strategies or cryptocurrency trading tutorial to use? We are doing a full inventory so that all traders can make money through crypto trading.
Choosing the best crypto trading platform
Crypto trading is a very special activity in all financial markets accessible to retail traders. It follows very specific rules that are to be known before starting: mining, exchange platform, blockchain, etc. The choice of your crypto trading platform is therefore essential to minimise the risk of failure, and increase your chances of making money. Our opinion on 4 popular platforms / opportunities in the cryptocurrency segment: eToro, Coinbase, XTB and Kraken.
EToro Review: Best Crypto Trading Platform?
eToro is one of the most popular forex / CFD brokers on the market today. Thanks to effective marketing around its strengths - social trading platform, wide range of financial assets and reduced brokerage fees (0% commission on stock trading for example) - eToro has established itself as a leader in a highly competitive market. What about crypto trading?
We must admit that the broker has excellent arguments to make:
The catalog of crypto currencies is one of the most impressive, any market combined (forex, CFD ...). There are 16 cryptocurrencies that can be traded online, from an eToro crypto trading account: Bitcoin, Bitcoin Cash, Cardano, Dash, Dogecoin, Binance Coin, EOS, Ethereum and Ethereum Classic, IOTA, Litecoin, Stellar, Neo, Monero, Tron, ZCash and Ripple (or XRP);
The eToro cryptocurrency trading platform is very intuitive, responsive and reliable. The integrated tools are numerous and allow excellent risk management in one click (eg: Stop Loss) and take advantage of the best prices at the best time;
The social trading is also extended to the negotiating crypto currencies (Bitcoin among others), which allows traders beginners to make money, not master all the subtleties of crypto trading;
The possibility of trading crypto-currencies in the form of CFDs (derivatives)
It is good to note, in our opinion, that the broker eToro is sometimes a little heavy on the side of brokerage fees on cryptocurrencies, in the form of more or less important spreads. This is a great option to start trading cryptocurrencies. Both novices and experienced find all the necessary tools in a user friendly platform, with a wide range of opportunities on the stock market.
Coinbase Reviews: Best Crypto Trading Platform?
The Coinbase crypto trading platform has everything to appeal to fans of virtual currencies. It offers a simple and uncluttered interface, which has the enormous advantage of being ergonomic, even for a newcomer. This is why it is often said that it is the online crypto exchange platform to not miss when starting out in this market. It is one of the major references: available in more than 100 countries, several million customers and secure transaction protocols (purchase, sale, exchange). The choice is wide with around thirty crypto currencies available, including Ethereum and Bitcoin. Ordering is very intuitive from the graph or the transaction interface.
The biggest criticisms to be made at Coinbase concern the rather high brokerage fees vis-à-vis other crypto brokers. There must be charges for capital deposits in euros, capital withdrawals and each order placed. Coinbase is also said to be an ideal crypto trading platform for newbie investors as the built-in indicators are quite limited. They correspond to the first needs, but can quickly become insufficient for more sharp traders. Despite these 2 flaws, Coinbase is a quality choice for a successful crypto trading experience.
What cryptocurrencies to buy?
This is surely the question that burns the lips of all traders: in which cryptocurrencies to invest your money? There are so many opportunities, with varying levels of reliability and profitability, that it is interesting to measure the level of risk from one crypto asset to another, and its sustainability. Focus on Bitcoin (BTC), Ripple (XRP), Litecoin (LTC) and Ethereum (ETH).
67% of retail investor accounts lose money when trading CFDs with this provider. You have to ask yourself if you can afford to take the high risk of losing your money.
Crypto trading platforms generally have ultra-simplified interfaces that are accessible to everyone - Source: Coinbase.com
Tutorial for trading cryptocurrencies
Let's engage the strategic dimension about crypto currency trading. Here is a tutorial on the right behaviours to have to reduce the risk of loss of capital, and increase the chances of gains. If you are lost, do not hesitate to consult our lexicon on cryptocurrencies.
Technical indicators are central elements to be mastered within the framework of a stable and reasonable financial strategy. All CFD brokers (or more specific such as coin trading platforms) offer technical indicators to help determine the presence of an opportunity to be seized. Here is a selection of technical indicators to consider carefully in crypto trading:
Moving averages: with a Japanese candlestick chart, it is then possible to define the price variations of an asset by taking as reference its opening price, closing price, the highest price reached and the lowest price achieved. Moving averages smooth the price of a cryptocurrency, ignoring outliers. This technical indicator is ideal for finding supports and resistances. Essential indication to see a bullish (buy) or bearish (sell) trend;
The volume profile or Volume Profile is a financial indicator that summarises all the information relating to the volume of purchases and sales of a particular asset. Investors can thus see at what prices a cryptocurrency was bought and sold. This is another way to define supports and resistances. So it is simpler, in this statistical graph, to determine the areas of interest of investors to position themselves in the trend;
Volume is an indicator that allows you to anticipate the continuity of a trend or a change of course. Schematically, if the volume increases on an uptrend, the price of the asset continues to rise. On the other hand, if the volume of transactions drops, very often the price of the asset ends up falling.
Technical and fundamental analysis
In no case should we neglect technical and fundamental analysis to trade crypto currencies well.
Technical analysis is based on technical indicators (charts, statistics, price measurements, etc.). It is a central element in the life of the crypto trader since it offers precise and quantified information on a trend and the price movements of a crypto. The goal is to position yourself correctly (order opening or closing) in order to earn money and minimise the risk of loss. Technical analysis has even more weight when practicing day trading on crypto CFDs because the goal is to take advantage of micro price variations. Relevant positioning over a limited period of time.
Fundamental analysis occupies a special place when considering a medium to long-term investment strategy. It is based on the known economic calendar and economic news which may be more unexpected. We often speak of feeling or feeling when it comes to fundamental analysis. It is a forecast of the likely consequences of an event on the price of crypto, stocks or indices.
Surround yourself with experts
We may not say this often enough. It is very important to carry out an investment plan to know how to strengthen your strategy with advice and analysis from crypto experts. Brokers are not stingy when it comes to issuing trading signals from their own financial advisers. Some brokers, offering social trading, include the sharing of stock market signals, via the exchange platform and / or copy trading. Other specialist sites offer excellent quality trading signals to help with decision making. There is no shortage of information sources to get the best possible shot at crypto trading.
What is the best crypto trading strategy?
Crypto trading, although by nature much more uncertain than traditional trading, shares most of its strategies with the latter. Here are some of the most interesting.
Crypto trading and money
How much money to get into crypto trading?
It is sometimes mistakenly considered that crypto trading is only for the biggest wallets. It is true that when we see the price of a single Bitcoin the question is legitimate. However, with CFDs and coin shard mining, it is not necessary to have colossal capital. It should be remembered that the presence of leverage can make it impossible to open a position in crypto since the margin is insufficient.
Now we can say that even small amounts of money allow you to get into crypto. Never forget that you should only invest the capital in euros that you do not need.
Crypto trading: how much does it earn?
Several elements to take into account:
The capital invested in virtual currencies;
The type of strategy applied;
The use or not of leverage.
On a long-term investment, the ROI can be really interesting. Especially if the purchase was made in a strong downtrend, and the sale is made at the highest price. In day trading / scalping, CFDs allow you to earn small profits regularly. Cumulated over a long period of time, it can pay off big. Like any stock market asset, the more you invest, the more chances you have of making money. Cryptos are sufficiently volatile and liquid that anyone can profit from them.
The price of a crypto like Bitcoin fluctuates enormously. But for the more skilled, there can be a lot of money to be made ...
Taxation and crypto-trading
Before January 1, 2019, digital currencies are classified as movable property. They therefore benefited from the same system. Namely, that only capital gains were taxed. The tax rate was set at 36.2% for each transaction. From now on, a flat tax is in place with a tax of 30% of realised capital gains (12.8% taxes and 17.2% social security contributions).
Warning on crypto trading platforms
Important criteria to watch
The reputation of the platform;
Operating costs: brokerage / management / exchange;
Payment methods available for deposits and withdrawals;
Security: transactions / identification / authentication;
Accessible through the geographic connection area.
Crypto trading platform scams
Given the importance of the crypto money market, many scams have emerged. Mainly miracle algorithms, in the form of automatic trading robots, which guarantee near-perfect success rates. No running costs or commission. Generally, this type of offers is a scam to be avoided at all costs, with no hope of regaining the invested capital. They often have the word Bitcoin in their name, to give them more credibility, and associate names of celebrities, without their consent.
If you are not comfortable with crypto terms, feel free to consult our cryptocurrency lexicon. I hope you enjoyed our trading platform comparison. We hope we've selected relevant trading platform for beginners with some of our trading platform fee comparison on show.