You have probably heard of crypto trading before. Whether on social networks or in crypto communities, trading makes people talk. Passion for some, nightmare for others, trading is more complex than it seems. In this article, we explain the challenges of crypto trading and the best platforms to do it !
Mis à jour le 12/01/2022 à 10:55
To talk about crypto trading, you have to start by talking about trading in general. Trading is an investment activity that consists of “betting” on the price of a financial asset.
In trading, the principle is to allocate an amount on the movement of the price of an asset. For example, you think that gold will increase in value in the next few months, you decide to place 1000€ on the rise in gold. If it increases in value, your capital will increase in value.
Trading has always existed. Finally, the first forms of trading appeared with the Romans from -750 BC. At that time, some traders bought rare commodities outside the cities to resell them in the city at much higher prices.
The very principle of trading is very simple: buy something and resell it at a higher price while making a profit. Trading is therefore a form of trading.
Today, when we talk about trading, we are talking about investment, speculation on assets whose value is studied and quoted. The emergence of the Internet has been decisive for trading because many platforms have emerged and have democratized access to trading to make it something almost common.
However, trading is a profession in its own right and requires a certain level of knowledge to have a chance of making a profit. Unfortunately, many people think it’s easy and web dream sellers often use trading to make it look like easy and guaranteed earnings.
In general nowadays, trading is done on these main financial assets :
It didn’t take long for cryptos to become a popular asset in trading. Their volatility makes it possible to dream of big gains but also increases the risk of big losses.
The course of any financial asset is obviously impossible to predict, this is the trader’s job. The courses sometimes follow the same mechanisms. News can also obviously have a weight and move the price of an asset.
However, in crypto, this can be even more difficult because it is a very young market and, therefore, very unpredictable.
Crypto has been talked about a lot since its arrival. Many investors have found, in this new form of money, a way to get rich massively after the few bull runs that the market has experienced.
This had the effect of giving the impression that cryptocurrencies were the new way to get rich easily. An image that many influencer entrepreneurs have used (and still use) to sell dreams to their audience.
There are many investment techniques in trading. One of them is day trading. As its name suggests, day trading is a technique that involves trading over a day.
In trading, it is common, for example for company shares, to trade over the long term. The investor buys a certain amount of shares by betting on the evolution of the company over several years.
Day trading is very different since it consists of making movements whose entry and exit are made over short periods. To make it attractive in terms of earnings, day traders apply leverage.
Leverage is used to multiply the movement of an asset. This is very important for day traders because price movements are often not significant enough in one day to make real gains with reasonable sums. With leverage, it can get interesting (but dangerous).
Most current traders and trading influencers day trade because it’s faster and doesn’t involve tying up your capital for a long time.
The risk is that with leverage, the capital wagered can both quickly increase, but it can disappear very quickly too.
If you are familiar with trading, you should know about SL (Stop Loss) and TP (Take Profit). These are instruments that are used to frame a trade. As explained above, leverage effects can take on disproportionate proportions.
The use of SL and TP smoothes gains and minimizes losses. The principle is to say “if the price falls to this level, the trade closes automatically” and vice versa for the TP.
These tools are essential to avoid too big losses and to preserve part of your capital in case your trade does not take the desired direction.
Automated trading is also a fairly popular technique that is widely used. This consists of using an algorithm that places trades automatically without any analysis and human actions.
This type of trading has advantages since it does not require human action and therefore you can trade day and night without having to be reactive.
In general, trading robots are set up and used by traders. These robots are set up with algorithms to trade according to numerous conditions and indicators.
Some influencer traders create their own robot and sell its access to their community in exchange for a subscription payment or membership in a VIP area.
Another form of crypto auto trading is copy trading. This system is not based on a robot but on experienced traders. The principle is to copy all the trades of traders whose results and experience are known.
With some platforms, it is possible to copy trades automatically and make them 100% automatic trading. Otherwise, many investors do copy trading manually by extracting information and following the trades they want.
There are many ways to do crypto trading. First in relation to investment techniques, then in relation to platforms.
To do crypto trading, all you have to do is find an appropriate platform that matches your level of knowledge and the tools you are looking for.
If you have no knowledge of trading or crypto, it is better to be very careful and start by finding platforms that offer demo accounts.
If you are interested in trading and want to learn more, you can start with the demo accounts. These are accounts where you can register and trade with real prices but without real money.
This step is essential if you want to learn to trade. If you just want to invest in crypto or other assets and you have no notions, you can follow influencers and use their knowledge.
Obviously, you have to be very careful with what you hear. Not everyone is an expert in trading as they tell you. If you want to follow an influencer, be sure of their legitimacy and interest in sharing their trades.
Often, you will need to join a VIP or register on a platform in partnership with the influencer.
There are many platforms that allow crypto trading. Here are the best crypto trading platforms according to the editor:
All of these platforms are actually brokers that offer access to many financial assets in addition to cryptocurrency. These brokers provide their users with numerous trading tools.
Crypto trading can be a way for you to invest in crypto. As we explained above, long-term buying of crypto is a form of trading. Holding cryptos for the long term is called holding and is probably the easiest and safest crypto trading technique.
The holding is done on cryptos whose project is very solid and will probably continue to develop in the long term. Bitcoin trading is often practiced in holding because it is the mother of cryptos and will most likely continue to be.
Holding can be combined with other techniques that optimize and maximize an investment. For example, you can do staking or lending with a crypto that you want to keep for the long term.
Compared to automatic crypto trading and day trading, we advise you to be very careful. If it may seem like an easy and safe investment, it is absolutely false. We can quickly believe it because trading is “only” capital manipulation for speculative purposes and therefore we can quickly have the impression “that it is enough”.
In any case, as with any form of investment, trading should be done with caution and knowing the risks. Even on “safe” trades, you can lose everything.
Also be very careful of dream sellers who tell you that you can get rich by following their trades and without any risk.
⚠️ This article is published for informational purposes and should not be considered as investment advice. Crypto-currency trading involves risk and it is important not to invest more than you can afford to lose.
InvestX is not responsible for the quality of the products or services presented on this page and shall not be held liable, directly or indirectly, for any damage or loss caused as a result of using any goods or services highlighted in this article. Investments related to crypto-assets are risky by nature, readers should do their own research before taking any action and only invest within the limits of their financial capabilities. This article does not constitute investment advice.
Web editor for many years and SEO specialist, Thomas became an editor for InvestX when the site was launched. Passionate about the field of crypto and Web3, Thomas has made it his mission to deliver maximum value and introduce readers to the world of blockchains, considered for him as the world of tomorrow.
Risk Warning: Trading financial instruments and/or crypto-currencies involves high risks, including the risk of losing all or part of your investment, and may not be suitable for all investors. Crypto-currency prices are extremely volatile and can be affected by external factors such as financial, regulatory or political events. Trading on margin increases financial risk.
Before deciding to trade in financial instruments or crypto-currencies, you should be fully informed of the risks and fees associated with trading in the financial markets, carefully consider your investment objectives, level of experience, and tolerance for risk, and seek professional advice if necessary.
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