One way to make money from cryptocurrency is trading cryptocurrencies on a Crypto Exchange like Binance.
The Crypto market is highly volatile and it makes it possible for traders to leverage on the price swing to make profit off the market.
At the same time, you can lose a lot of money if you don’t know how to take advantage of the market volatility. In other words, understanding Market volatility is very important if you want to make profit trading on any crypto market.
As a beginner trader, you want to make sure you’re trading with the required guidelines to enable you minimize your losses and maximize your profits.
While there are several exchanges out there, I personally recommend Binance to the beginner trader for the following reasons;
Binance is a cryptocurrency exchange that provides a platform for trading various cryptocurrencies. It was founded in 2017, and as of April 2021, Binance was the largest cryptocurrency exchange in the world in terms of trading volume.
Liquidity: Binance exchange has the greatest market and asset liquidity. Liquidity is simply the ability of traders and investors to convert their assets to cash.
Great Interface: This is very important, especially newbies to crypto trading on an exchange. Binance Exchange has a very friendly and interactive interface designed to meet easy flexibility and accessibility.
Low Transaction Fees: Transaction fees on Binance are quite low and using BNB (Binance native token) as transaction fees attracts a 25% discount in fees.
Secured Platform: Binance has a good security system that can guarantee the safety of your crypto assets in your wallet while trading.
Great support Team: With the Binance support team, at any point you encounter a problem with trading on Binance you can easily assess the Binance support team and get quick assistance.
Powerful Community: Binance has powerful communities that helps maintain market liquidity and drive market trading volume. Also, Binance has communities doing a great deal towards global crypto adoption through mass education.
Generally, cryptocurrency exchangers are market places that matches buyers and sellers order. On the crypto market place, you will find both traders and investors seeking for gains.
However, while investors are long-term gain seekers, traders thrives to make profits within a short period of price swing.
Here are a few reasons why you should trade cryptocurrencies?
Volatility: The change in price of crypto assets happens rapidly, you can make great profit if you are well positioned for the ride.
7Days - 24 Hours Market: Unlike the traditional market, cryptocurrencies are traded 24/7 days a week around the clock. The crypto market never sleeps like other financial markets.
Liquidity: Traditionally, this is the ability to convert assets to cash. Trading crypto assets with high liquidity like Bitcoin on a crypto exchange is a great deal.
As a beginner trader, trading on Binance or any preferred exchange, you need to be able to make good price projections to enable you enter or exit from the market. To achieve a good price projection, you need the knowledge of Fundamental and Technical Analysis.
This looks at the technical side of development of the token, news, regulations, team and issues affecting the price. These guys are focused on the technology, ideology and team.
The Price of an asset can be affected positively or negatively through fundamentals like news, regulations or adoption. More people will be willing to buy when there is positive news about a particular cryptocurrency asset.
This side study price chart patterns, trading volume, and statistics, since price movement speaks for themselves and tells you a story of what will happen.
There are candlestick patterns and technical indicators you can use to determine price action. You need to get yourself familiar with them.
One thing to bear in mind is that you can never have a 100% market prediction accurately because the market can change direction at any time. You should never bet on any market regardless of how good the analysis may be.
However, it’s very important that as a beginner trader you acquire proper education of Trading Analysis to determine Price Action before trading the market.
COMMON MISTAKES TO AVOID AS A BEGINNER TRADER
Risking More Than you can Afford to Lose
Only risk an amount of money you can afford to lose in order to enable you to have a sound mental disposition to make good decisions while trading. A lot of newbies run into frustration after losing so much money from the market.
Trading Pump and Dump Markets
These markets are highly manipulated. Most people who trade on this kind of market are just seeking for quick profits so they sell off quickly and if you’re not fast with the trend, you’ll be badly wounded on this market.
Wanting to make all the Profits before exiting the market
Don’t be greedy! If you have made profit from a trade, you don’t need to wait to make all the profits before exiting, sell off the trade, except if you’re holding for a long period of time.
Trading Without Using Proper Stop loss
Chances are that a trade may not go as expected but reverses, without a proper stop loss you stand the risk of losing your capital on that trade if the market dumps massively. The bottom line is that always use proper stop loss to safeguard your trade from bigger losses.
Not Setting Clear Trading Plan
A clear trading plan should guide you on how to diversify your trading portfolio, your risk to reward ratio and your do’s and don’t. Strict adherence should be giving to them if you want to trade successfully.
FOMO and FUD
The Fear of Missing out (FOMO) and Fear of Uncertainty and Doubt
(FUD) is undoubtedly the two emotional setbacks the beginner trader is likely to face.
As a beginner trader, you can easily be carried away by the feeling of “missing out” to buy the peak of a market. The danger of this is that you might end up catching a falling knife.
On the other hand, the fear of uncertainty and doubt will constrain you from taking action. You’ll only make profit when you are able to cautiously risk your money in the market.
Not Investing in your Education
To trade successfully on any financial market, you need some level of education which requires your investment in personal research or tutoring.
Joining a Crypto Community gives you an opportunity to learn more about crypto trading, Blockchain technology and a lot more.
Most beginner traders who skip this step end up learning it the hard way in the market.
I personally use Binance and can highly recommend it.
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