Cryptocurrency trading platforms have multiplied in recent times. If you are a beginner, you may feel a bit hesitant in diving into this space. Here is the quick guide on cryptocurrency trading for beginners to familiarize them with the trading essentials.
There is no physical exchange platform as such. You need to open an online crypto trading account to start. Exchanges like WazirX are quite easy to understand and setting up account is a real quick process.
It is entirely up to the traders. The cryptocurrency experts in India can be of good help in understanding the correct investment amount. They understand from the investors the time horizon, areas of investment of their interest, returns expected, risk appetite, etc. Accordingly, they suggest the amount to put aside for trading in cryptocurrencies.
Diversification is the best strategy for cryptocurrency trading for beginners. They can mitigate the risk and spread it across various avenues to have the overall returns on the plus side. Some of the promising avenues that are making place to discussions surrounding crypto trading are tokens, NFTs, gaming, entertainment, Layer1 and Layer2, real estate, high crypto yield products, etc.
The cryptocurrency space has become enriched since its inception. Hence, there is ample data available to the cryptocurrency experts in India for suggesting the correct strategy. A few of the promising and safe strategies are:
All these are the basic things to know if your instincts are taking you to trying crypto trading. The cryptocurrency experts in India can provide you with the right support as a beginner and instill you with confidence.
This article explains everything there is to know about trading cryptocurrencies in India. Getting into cryptocurrency trading in India can be challenging because it is an uncharted area for many people. But, as you study, know and get advice on blockchain technology and how it is revolutionizing the financial sector, you will be able to understand its potential.
Every day, more people join the crypto universe in search of investment opportunities and profits. So if crypto trading catches your eye and you want to start immersing yourself in this topic, read on.
Cryptocurrencies, also known as digital currencies, are a means of payment since they fulfil the same function as money. In addition, they represent a new investment option in the market as a valuable asset. These assets can be simply traded (purchase-sale), held or traded as cryptocurrency futures on the crypto exchange.
Since the creation of the first cryptocurrency (Bitcoin) in 2009 by Satoshi Nakamoto, whose true identity is unknown, cryptos and cryptocurrency trading have not stopped growing worldwide. To the point that today there are already some 17,000 different versions of cryptocurrencies operating in the market.
Digital currencies are created from a complex mathematical protocol through the blockchain. This encrypted network or accounting ledger allows for keeping a secure, decentralized, synchronized and distributed record of digital operations. Cryptocurrencies are mined or created; they are added to the blockchain network. The blockchain protocols are decentralized, and experts can review the codes. This ensures that some of the cryptocurrencies are independent and do not require the intermediation of third parties, as is the case with fiduciary money. However, lately, governments are working on creating their digital currencies, the CBCDs (Central Bank Digital Currencies).
Cryptocurrencies are classified into several types: Bitcoins, Altcoins and Tokens.
It is the largest cryptocurrency in the world by market capitalization. It allows you to make electronic payments without the need for financial intermediaries such as banks or other traditional payment platforms.
Since its launch, the trading of bitcoin (BTC) and cryptocurrencies, in general, has grown a lot. BTC became a payment alternative (houses, cars or other goods) and an investment option that boosted cryptocurrency trading in India.
They are alternative digital currencies to bitcoin, hence their name (alternative coins). Each of these coins is also based on its blockchain technology and has different applications. Altcoins operate independently on their blockchain or distributed ledger technology (DLT) networks.
By having their technology, all Altcoins compete with each other to attract more enthusiasts who invest in them and support their development and growth. The top altcoins include Ethereum, Litecoin, Ripple (XRP), Bitcoin Cash, Binance Coin, Cardano, Solana, and more.
Lastly, in the crypto universe and crypto trading, there are tokens. Although they are also cryptocurrencies, they do not work within the blockchain network of another cryptocurrency. In other words, the tokens do not have their blockchain. However, Ethereum does host other cryptocurrencies such as USDCoin, Chainlink, Tether (USDT), Neo (nash and gas) or Tron (BitTorrent) on its network.
Similarly, tokenization is all the rage in cryptocurrency trading and other digital assets. Tokenization is also being applied successfully in trading other non-digital assets such as commodities, fiat currencies or properties.
Cryptocurrency trading in India has been gaining popularity due to its rapid adoption among people, professionals and institutional investors. Fundamentally, cryptocurrency online trading is really where you trade.
Crypto trading encompasses the direct buying and selling of crypto through a crypto platform, online peer-to-peer (P2P) cryptocurrency trading, and futures contracts for Bitcoin and other cryptocurrencies, which you can purchase through a mutual fund that invests in cryptocurrencies.
One of the fundamental characteristics of cryptocurrency trading is obtaining returns from price fluctuations during a specific period. Traders analyze the price movements of cryptocurrencies in the market (up or down) and forecast the variation over time. The profits are proportional to the volume of the trade carried out.
In online cryptocurrency trading, price fluctuations are constant, as is high volatility. The crypto investor can take advantage of this volatility to increase the performance of his operation. Some prefer to trade short and make immediate profits; others play long term.
Investors who want to get started in crypto trading should first prepare themselves on how to trade cryptocurrency in India. This requires first studying the market, developing an effective online cryptocurrency trading strategy, and then opening an account with a crypto exchange.
Before starting cryptocurrency online trading on a crypto platform, investors should know that cryptocurrency trading in India is not entirely regulated. Therefore, trades are made at the risk of the investor himself since there is no protection from the state or the nation in case of loss of money due to bankruptcy or fraud of the crypto platform used. You will have heard of users making a lot of money through cryptocurrency online trading, but countless users have lost all of their money by trading rashly. Using leverage for trading crypto is one of the biggest no-nos for an early or beginner trader, because it is one of the fastest way to get your account liquidated
Hence choosing the best Indian crypto exchange for beginners is a crucial task. Especially if you are just starting in the crypto space. India has several safe, liquid and reliable crypto exchanges with affordable fees. These companies offer a good user experience, and you can start trading with little money.
The biggest and best exchanges trading cryptocurrencies in India include WazirX, Coinbase, CoinSwitch Kuber, Unocoin, CoinDCX, Zebpay and others. Each has its pros and cons, depending on the investor’s cryptocurrency online trading needs.
The purchase-sale of digital currency is the exchange of one crypto for another. The process is straightforward, similar to FOREX or purchase – selling one currency for another (Indian rupees for dollars, for example). You are looking for a pair of cryptocurrencies to exchange or a cryptocurrency for a fiat currency.
Traders can do cryptocurrency trading in India through the exchange of their choice. Or, as mentioned before, two traders agree on a peer-to-peer market to directly exchange two types of cryptocurrencies through their respective virtual wallets.
For trading cryptos, it is necessary to have already opened an account in a crypto exchange or a wallet to store your funds. Opening an account on an encryption platform is also a straightforward process. You must fill in a series of requested user personal data and then choose the cryptocurrency and buy it.
Most exchanges accept payments in Indian rupees or cryptocurrencies to facilitate buying and selling. After buying the chosen cryptocurrency, you can transfer it to your wallet and dispose of your funds as you prefer whenever you want.
For proper management and use of cryptocurrencies in India, it is essential to keep these digital assets stored in safe places. You cannot entrust your money to any platform, so you must also choose a secure wallet.
Expert recommendations on how to trade cryptocurrencies in India safely state the need to adopt measures to avoid theft or scams.
After reading this complete guide on trading cryptocurrencies in India, you will have a complete picture of this critical financial option that generates high returns. Cryptocurrency in India has become an essential financial instrument in any diversified investment portfolio. Take your initial steps carefully and do comment on the article if you need a more detailed guide on how to trade cryptocurrencies in India.
Any trading in a community, currency or stock is a risky proposition. Along with returns, you need to be careful about your exposure and your ability to manage risks. Whether you are involved in stock trading, commodity trading, or the cryptocurrency industry, you should always take safe steps to minimize such risks.
Cryptocurrency trading has opened up a wide range of possibilities to new and old investors worldwide. In India, cryptocurrency experts always advise the best crypto traders to adopt proven effective trading strategies.
Only then you will be able to start your journey to the crypto space more safely and securely and maximize the chances of obtaining higher returns on your investment while not losing your capital.
There are five basic trading strategies with any type of currency, including cryptocurrencies: scalping, day trading, swing trading, position trading and trend trading.
They all depend on the time and duration that the trade will remain open. Below we briefly explain each of these strategies recommended by cryptocurrency experts in India:
It is a form of high-frequency intraday trading, and its goal is to make small profits over a high number of trades. It requires opening online positions that present a trend, where the crypto trader will enter and exit the market several times, depending on its oscillations and the proposed trading strategy.
This is a short-term trading strategy where trades are made in minutes or seconds. This strategy is used to trade highly volatile assets, precisely like cryptocurrencies, efficiently. Profits from scalping are made when the market moves favourably, and the crypto trader quickly closes a position when the market takes a different direction.
This short-term trading strategy also consists of opening and closing trades on the same day. Thus, the trader will be able to make faster profits according to intraday price movements.
The best crypto trader will avoid incurring higher costs by not keeping positions open when the markets are on 24/7. It also minimizes the risks that arise while you are not keeping an eye on overnight market movements.
However, it is a strategy that requires thorough analysis and attention. It means dedicating the necessary time to observe open positions and the course of the market.
It is focused on playing with the price swings that occur within the same trend. This strategy pursues the maximum use of market volatility by carefully observing the upward or downward movements as a trend evolves.
Swing trading is a strategy for the short and medium-term that offers the trader many more profit opportunities. However, it is less likely that you can trade precisely at the moment when the price movement is at its highest or lowest.
It is often necessary for a partial trend reversal to occur in order to identify a new trend reversal or swing. This strategy requires that the trader fully understand the reading of the technical indicators and the factors that cause movements in the markets.
Trading with trends
It is a highly recommended trading strategy by cryptocurrency experts in India. It consists of opening a position online following a trend, as occurs with scalping. However, to maximize profits, instead of opening and closing positions, the investor needs to keep the position open for as long as possible during the price movement.
It works as a short, medium, and long term trading strategy as trends develop over a set period. It is also necessary to have a solid knowledge of the functioning of the market. Manage technical indicators and analyze the environment to identify any emerging trends.
Investors look to spot long-term price movements to try and make the most profit when the price of the asset fluctuates. Consequently, they are operations that can last months or years.
Position traders and top crypto traders often do weekly or monthly chart-based price analyses, allowing them to make a detailed assessment of markets. They use both technical indicators and fundamental analysis to be able to determine when to enter or exit.
Investors do not need to be monitoring their positions because they are not worried about the ups and downs of the market. They only do it occasionally to ensure their investment is going in the right direction.
However, the cryptocurrency experts in India mention other additional trading strategies that the crypto investor can use.
The automated cryptocurrency trading strategy requires appropriate software that executes the orders dictated by the trader. The complexity of the system used will depend on the degree of preparation of the investor. So they can be very simple or quite complex. Many of the software is customizable by the trader for optimum results.
Automated trading can allow the investor to monitor the markets during the day permanently. Trades can be opened or closed at the right time to reduce risks while the trader is away.
For proper use of these systems, the investor needs to supervise them properly. Although they are pretty reliable software, they could fail due to various points of failure at any moment and generate an unwanted loss for the investor.
Best crypto traders consider “dollar cost averaging” (DCA) a very safe strategy. The DCA consists of investing a fixed amount of money during a certain period.
In this way, the crypto trader does not have to be synchronizing their systems with the market to make long-term profits. But this strategy has a disadvantage for the rookie investor that it requires an excellent study of market trends and cycles.
Before taking a call, you need to monitor oversold and overbought areas of the market closely. Likewise, it is essential to take regular readings of the technical charts to leave a position at the right time.
It refers to the strategy followed by the best crypto trader to buy cryptocurrencies in one market and sell them in another. Take advantage of the difference between the purchase price and the price known as ‘spread’.
Investors can profit from trade because of liquidity and trading volume difference. Cryptocurrency experts in India state that the way to take advantage of this opportunity is by opening accounts on the best cryptocurrency platforms in India. The price differences between the cryptos operating at that time are shown.
Bet on Bitcoin volatility
Some of the best crypto traders also make bold moves to boost their profits. Of course, this requires a healthy dose of confidence in what you are doing.
Bitcoin (BTC) is one of the most volatile virtual currencies. There are sessions in which BTC prices have varied up to 30%. Buying in a bear market (Buy the dip) can bring significant profits to the investors, and if the trend goes the other way, it can create substantial losses.
One way to bet on volatility is to trade Bitcoin futures. A call and put option is purchased on the same cryptocurrency ETF. Volatility traders bet on a cryptocurrency expected to rise or fall over a specified period.
Cryptocurrency experts in India also warn about the advantages and disadvantages of this type of investment. They depend on the time established for said investment and the objectives pursued by the crypto trader.
some of the best crypto traders in the world have found it beneficial to invest in crypto assets in the long term. Especially in the world’s largest cryptocurrencies by market capitalization (BTC, ETH, SOL, ADA).
This strategy requires carefully selecting the most promising cryptos on the market. Those projects have proven their solidity, given their resistance to volatility and constant growth.
Cryptocurrency experts in India point out that the main advantage of this strategy is its low operating cost and saving time and money on tax expenses. It is very suitable for investors just starting, as they do not need to carry out extensive analysis or use technical tools.
The disadvantage of long-term investment in cryptocurrencies is that the investor does not see immediate returns on their investment. It is money that is frozen there. It can also be risky if the investor has not thoroughly researched the cryptocurrency project.
Unlike investing in cryptos for the long term, this strategy provides more significant opportunities for immediate profits. Many of the best and most successful crypto traders generate regular income that allows them to live.
But, it requires a great daily dedication or at least several days a week. Investors need to mandatorily monitor the market at all times. Investors must constantly make decisions, analyze trends, identify signals, and interpret them correctly.
You have to study much more and be subjected to the stress generated by the market daily. Likewise, many emotions must be dealt with: hope/hopelessness, joy/frustration, anger/fear, etc.
Cryptocurrency day trading is undoubtedly riskier than long-term trading. Only a proper trading strategy with competent, technical and professional advice can minimize such risks and make trading more profitable.
According to cryptocurrency experts in India, primary research is paramount before starting to trade crypto assets by adopting the best cryptocurrency trading strategies from the best cryptocurrency traders in India.