Trading cryptocurrency on the stock exchange: where to start, types, methods, pros and cons

Cryptocurrency trading is a promising area that allows you to buy/sell coins and earn income from changes in their price. The effectiveness of such earnings is due to the high volatility of the exchange rate, which can change several times during the day by 5-10% or more. This feature is used by traders who want to make a profit.

You can trade Bitcoin, Litecoin, Ethereum or other virtual money on cryptocurrency exchanges, P2P platforms and brokerage platforms. Below we will pay attention to the first option, because it is the most convenient, provides advanced opportunities and allows you to withdraw money every day.

Types of crypto exchanges and their classification

The trading principle and interface features depend on the chosen platform. The exchange must be popular, have a simple and user-friendly interface, and provide a large selection of methods for depositing/withdrawing money. One of the conditions is the presence of the Russian language and many tools. As a rule, trading is carried out 24 hours a day, seven days a week, and positions are opened for price increases or decreases.

Regardless of their characteristics, cryptocurrency exchanges are classified according to a number of criteria:

Availability of unified management - centralized, decentralized.
Regulation - with or without regulation.
Support for fiat money - with or without the ability to deposit/withdraw regular money.
Volume – liquid, illiquid.
Trading options: spot or margin.
Level of data disclosure - with mandatory verification, with optional identification, KYC and AML.

For a better understanding, let's look at the above classification in more detail.

Availability of a single control center

Based on the principle of organizing their activities, exchange platforms for trading cryptocurrencies are divided into two groups:

Decentralized. Built on the blockchain principle, they do not have a single control center. They have minimal risk from the point of view of account hacking or money theft. The downside is that such crypto exchanges are often used for “laundering” funds and conducting illegal transactions. In addition, decentralized crypto exchanges are still just developing, so they do not have the required level of popularity and cannot boast of a large volume of transactions.
Centralized. Unlike those discussed above, such exchanges operate on the servers of a company. Information about users, their funds, open transactions, etc. is also stored here. These are the crypto exchanges that are most in demand and are in demand among traders. Their advantage is the presence of an office where you can contact, but the disadvantages are reduced confidentiality and the risk of hacking.

Fiat money support

When considering cryptocurrency platforms, it is important to pay attention to fiat support. From this point of view, all platforms are divided into two categories:

With fiat money support. On such sites you can deposit/withdraw money through classic systems: Visa, MasterCard. Transactions can be carried out in dollars, euros and other currencies.
No fiat. To deposit/withdraw funds from such services, it is necessary to use third-party platforms. In them you need to buy cryptocurrency using fiat money, and only then deposit virtual coins into the exchange account.

Feature of regulation

Based on the presence of regulation, crypto exchanges are divided into two groups:

Adjustable. Such platforms are in demand among institutional traders focused on the legality of their transactions. The peculiarity of regulated cryptocurrency exchanges is government control, including in relation to all operations. This means that users must undergo verification or provide information about the legal entity (if the work is carried out on its behalf).
Unregulated. Used by novice traders and mid-level users. Due to the large number of such participants, unregulated exchanges are more in demand, and the total trading volume is in the hundreds of millions of dollars. Such platforms are chosen by privacy-oriented people.

Tools of the trade

When choosing a crypto exchange, you need to pay attention to its capabilities. From this position, two platform options stand out:

Spot. Such sites provide quick settlements with participants without the use of leverage. The main reason for conducting such activities is control by the American SEC. Trading on credit carries increased risks, and in addition to this, the cryptocurrency market itself is characterized by high volatility.
Marginal. Many traders prefer to take risks in the hope of getting a large income if they have a minimum amount on deposit. Cryptocurrency exchanges with margin are provided for such users. They provide funds on credit so that the trader can return them with interest in the future.

Need for Identity Disclosure

Before trading on a cryptocurrency exchange, it is important to understand its identity disclosure requirements. There are three categories of platforms in this regard:

No mandatory verification. Some platforms offer registration services without identity verification to attract clients. To start trading, just confirm your mailbox or phone via SMS. This loyalty is valid until you withdraw a large amount or receive additional instruments. In this case, you cannot do without identity verification.
With verification. Many crypto exchanges that focus on long-term work and large transactions immediately require the entry of personal data and check it against documents. It is this group of cryptocurrency exchanges that includes EXMO, Yobit and other giants.
KYC and AML. This includes a separate group of sites that have developed special customer protection mechanisms. The use of such technology is at odds with the principles of blockchain technology, but some exchanges comply with regulators and provide such verification capabilities.

Volume of transactions

When analyzing a crypto exchange, it is important to look at how many transactions are made on it. From this point of view, cryptocurrency trading platforms are divided into two groups:

With low liquidity. There are many platforms on the Internet that are just starting out and offer a small selection of currency pairs. Against this background, they have a relatively small volume of transactions and are classified as illiquid.
Highly liquid. This includes sites where you can quickly buy and sell an asset of interest at the current price. Such sites are distinguished by a large number of registered users and a variety of transactions. The set of assets itself is also of great importance, because liquidity directly depends on it. For example, highly liquid cryptocurrencies include Bitcoin or Ethereum.

Phishing. How to avoid becoming a victim

Another possible scenario is that the following could happen. You will receive a letter of congratulations about receiving a prize on one or another cryptocurrency exchange that you may already be using. You go to the site using the link from the letter and enter your username and password on the supposedly original exchange. But you don't find any prize for some reason.

When, after a while, you go to your cryptocurrency exchange from your browser bookmarks, you see only empty deposits and transaction transfers to some third-party wallets. How could this happen? Very easy! That fake email contained a link not to the original exchange you use, but to a scammer phishing site. Phishing sites are copies of certain original sites with changed domains.

How to steal Ethereum cryptocurrency from MyEtherWallet wallet

Typically, the differences in the domain of a particular fake resource are so small that they are difficult to notice. For example, instead of the Binance exchange, which has the official domain binance.com, it may be written binance.ru.com or blnance.com (here instead of “i” it is written “l”). You can see a visual comparison of the two sites in this picture.

Such sites are designed to steal passwords and logins, which you hand over to the scammers. And it’s now very easy to fall for a typical phishing site.

That is why, in order to protect yourself as much as possible from scammers, you need to use a separate email account that you will not use on unverified third-party resources. Use the new account only to register on cryptocurrency exchanges and electronic wallets. In this case, it will receive only the information that will be sent by the developers of the wallet for digital currencies and from the owners of crypto exchanges. For others, your mail will be closed, since you did not post it anywhere and did not enter it in spam mailings.

Rules for choosing a crypto exchange and TOP best options

Beginners often rush into making a choice and fall for scammers, and as a result, lose money. To protect against such situations, it is important to pay attention to a number of criteria:

Reputation. This indicator can be judged by the operating time of the cryptocurrency exchange. If the latter has been available for over 3 years, the risk of being deceived is minimal, because the platform has been operating for a long time and has proven itself to be the best.
Safety. Some exchanges pay more attention to the conditions and benefits for the client, but save money on protecting the servers. Remember that small commissions or a solid selection of tools are unlikely to make you happy if attackers hack the server and steal money from there.
Goals of work . When choosing, pay attention to the frequency of trading and suitable instruments. With this in mind, potential commission costs must also be taken into account.
News. Before registering and trading on a particular exchange, read the news. Perhaps it was recently hacked, or information has appeared about the discovery of some kind of vulnerability.
Country of registration. You must understand in which state the exchange is registered in order to know the potential risks and dealings of government authorities.

In addition to the criteria discussed above, pay attention to other points. Be sure to read the reviews, look at the list of available tools and the amount of commissions. Also try to choose exchanges where there is a Russian-language interface, and the support service can communicate in Russian.

TOP best exchanges

Based on the criteria discussed above, the most popular exchanges include:

Binance (binance.com/ru). It has been operating since 2022, and already in 2018 it became one of the three best exchanges in terms of trading volume. Deposit/replenishment with fiat money and cryptocurrency is available. More than 160 coins can be traded. Moreover, the transaction fee is only 0.1%. A pair of terminals are used for trading: basic and with advanced capabilities.
Bitmex (bitmex.com). Another cryptocurrency exchange with a big name. Offers trading Ethereum, Bitcoin, Bitcoin Cash, Ripple, Cardano, Litecoin and other coins. Provides access to margin with leverage of 100x for Bitcoin, 50X for Ethereum and 20X for Ripple. The platform occupies a leading position in terms of futures trading volume. Transactions worth over $1 billion are carried out here every day. The platform has been operating since 2014.
Bybit (bybit.com). A large site that allows you to buy/sell, invest and store money. The daily trading volume of the platform is more than $7.6 billion. It features a reliable cryptocurrency trading system, multilingual support, and a large selection of information for beginners. Here you can trade cryptocurrencies and derivatives. There is no commission for input/output, except for the fee from the system itself. There is a demo account.
Exmo (exmo.com). One of the most popular crypto exchanges in the CIS. Suitable for spot trading of cryptocurrencies. There are many popular coins and altcoins available to choose from. The commission payment is minimal and rarely exceeds 0.4%. The site has over 18,500 simultaneous traders, more than 175 currency pairs, and a 24-hour trading volume of about 2,000 Bitcoins.
Crex24 (crex24.com). The official crypto exchange, operating since 2017 and offering a wide range of tools functionality. It features clear and convenient functionality, 24/7 support, and no limits on deposits/withdrawals of money. Additionally, faucet services are provided to receive coins without additional investment. There is support for fiat money.
Currency (currency.com). Cryptocurrency exchange with regulation. Has Belarusian roots. Offers a choice of over 1300 currency pairs, a leverage option of up to 100X. User identification is mandatory. Among the features of more than 2000 cryptocurrencies and tokenized assets, small commissions, an affiliate program, the use of AML / KYC standards.

In addition to those mentioned above, you can pay attention to other popular sites. These include Bitforex (bitforex.com), Huobi (huobi.com), Derebit (deribit.com), Cex (cex.io) and others. All of them are popular platforms and have a good reputation. But to make the final choice, you need to pay attention to the criteria discussed above.

News from the world of cryptocurrencies. Twitter account

The main regulators of the cryptocurrency rate at the moment are various news and events in the world of the digital economy. One positive news can instantly spur the growth of any crypto coin, increasing its price by 2-3 times. While several negative news, which can be ordered by large investors or other influential individuals, can bring down the market and trigger a deep correction for several long months.

Cryptocurrency trading. Five secrets of success

In principle, this happened at the beginning of 2022. After the constant release of negative news, the cryptocurrency market suffered a global decline, reducing the capitalization of the cryptoeconomy several times in a short period of time. All this can be clearly seen on the crypto market capitalization charts.

The general conclusion can be drawn as follows. Any successful trader must be aware of the latest news in the world of cryptocurrencies and be able to analyze them in order to predict the future decline or growth of the entire crypto market. This, one might say, is the basis of the basics.

It is necessary to study several information sources that broadcast the latest news and events in the world of cryptoeconomics, keeping an eye on each new incident. In this case, you have a chance to make several successful transactions by playing on a decrease or increase in the rate of crypto coins.

The best way to track news is to use a social network like Twitter. Primary sources of various news from the world of cryptocurrencies from the developers and founders of any Blockchain companies are often posted there. Using Twitter, you can find out any news faster than anyone else, analyze it and have time to profitably use the information.

However, there is some nuance. Since Twitter is a foreign social network, all news there is published in a foreign language. If you speak English, this gives you a great advantage and all the roads of a successful trader are open to you.

The trader must know English

If you do not have sufficient knowledge of a foreign language to use the primary sources of various news about cryptocurrencies on the social network Twitter, then you will have to use the Russian analogues of such information channels. There are more and more of them these days. Any groups or communities can be easily found on YouTube, Telegram, VKontakte, Instagram, etc.

Cryptocurrency trading bot on Binance, Huobi and KuCoin

In general, there are a lot of options. Find for yourself a couple of good sources of information about the field of digital currencies in Russian and begin to constantly analyze them, gaining experience in trading.

How to trade on the stock exchange: general algorithm of actions

Choosing a cryptocurrency exchange is only the first stage. Next you need to go through the following steps:

Register an account. Most often, it is enough to enter your email/phone number, specify a password, and then confirm the entered data by following the link or entering the code from SMS in a special field.
Verify your account. If a cryptocurrency exchange requires identification, this must be done immediately. Depending on the conditions of the platform, you may need a photo with documents, passport scans, confirmation of registration, etc. After sending the documents, you must wait some time for the verification to take place. Wait for confirmation from the administration, then proceed to the next step.
Practice on a demo account. If a crypto exchange offers a free account, use it to practice and test the capabilities. At this stage, you can decide on a suitable tool, develop your own strategy, gain experience and gain confidence in your abilities.
Top up your balance. Do not stay long on a demo account, because this way you will not be able to make a real profit. After some time, deposit funds into the account, taking into account the minimum threshold in fiat money or cryptocurrency. Be careful with the address so as not to make a mistake with the translation.
Take up trading. At this stage, you need to trade the selected asset through your existing terminal. The latter is a platform that is available on every crypto exchange.
Withdraw money. After receiving the minimum amount, you can order funds for withdrawal. Here, pay attention to the commission that may be charged by the platform and/or payment system itself.

Choosing a cryptocurrency exchange to earn money

Let's start by choosing a trading platform that will provide a set of tools for generating active or passive income. Exchanges are classified according to several parameters:

DEX or CEX (decentralized and centralized). Centralized crypto exchanges (for example, Binance, Huobi, EXMO, FTX, StormGain) are owned by a company that manages most of the processes, sets fees, carries out transactions, and in most cases stores user funds. Decentralized exchanges (for example, Binance DEX, Uniswap, Balancer) are essentially a mechanism for interaction between user wallets, and all transactions occur directly through the blockchain, without developer intervention.
For trading on the spot market or derivatives. Spot exchanges (for example, Currency.com, Coinbase, EXMO) allow trading with instant settlement of transactions, while derivatives (futures, options) are contracts that imply settlement after a certain time. When trading futures, it is not necessary to own the underlying asset, since they themselves act as an object of exchange. This type of trading is supported on the Bybit, Binance Futures, BitMEX, FTX platforms.
With or without verification. KYC/AML verification is needed so that regulators can, upon request, receive information about suspicious transactions and the users who make them. Some exchanges (for example, EXMO, Currency.com) require verification to perform any actions. Others, most of them, make this requirement optional (Binance, Huobi, BitForex). Still others (for example, YoBit) do not require verification at all.
With or without fiat. If it is more convenient for you to deposit and withdraw funds in fiat – rubles, dollars, euros – then consider those platforms that support this possibility. For example – Crex24, Binance, Currency.com, Cex.io.

In addition, it is worth mentioning such a type of exchange as p2p platforms. Their users set their own terms of exchange and transfer assets directly to each other. Examples of such platforms are LocalBitcoins, LocalCryptos, Cryptolocator, Bitpapa, Paxful, etc.

Trading theory: trading orders, terminal and commissions

To successfully trade on the stock exchange, you need to understand the terminology, know the features of orders, the principles of operation of trading terminals and types of commission payments. It is advisable to study this information before replenishing your balance and attempting to trade with real money.

Types of orders

When trading on a cryptocurrency exchange, many different orders are used, differing in structure, features and earning potential.

Let's briefly look at the main options:

Stop order. It is used until the value of the cryptocurrency reaches a certain level. It is used to sell virtual coins at a certain cost when the latter decreases and allows you to minimize the amount of losses. It is added to the order book and has a commission.
Market. Provided for buying / selling coins at a price that is the best at the moment. When conducting a transaction, the market rate is used.
Take profit. Very similar to a Stop order, but has the opposite purpose. Its goal is to sell cryptocurrency when its rate is bullish (growing) and reaches a certain level.
Limit. When choosing such an order, the trader independently selects the purchase/sale price. The rate may differ from the market rate. The order is executed when a certain value is reached. If such an event does not occur, the limit order remains unexecuted.

In addition to the main ones, it is worth highlighting a number of additional orders:

FOK. Must be executed instantly when the stated price is reached or canceled. Partial execution is not practiced. Suitable for orders for large amounts and for executing the order when the expected rate is reached and in the required quantity.
OSO. Represents a group of orders. One is a limit/stop order and the other is cancelable. Suitable for market participants who plan to open orders for stop loss and take profit, as well as fully manage the situation.
GTC. It is valid until the trader executes or cancels it. It is used by market participants who have clear positions on the cost of purchase and sale and are confident in the relevance of the exchange rate. Before a GTC order is executed, it can be canceled at any time.
IOC. Implies instant full/partial execution at the desired/best price. If there is a part of the transaction that cannot be fulfilled, it is canceled. Such an order is usually used for large amounts. To speed up the transaction, a delayed order can be quickly canceled, thereby reducing risk.

There are other types of orders, for example, Post Only, hidden, Bracket and others, but they are used in rare cases.

Terminal and working with it

To trade cryptocurrency on the stock exchange, so-called terminals are used. They may differ in interface, but most often contain the following elements:

Schedule. Shows the movement of cryptocurrency value online.
A glass of orders. Collects all currently open buy/sell orders for virtual coins. Based on the information in the glass, you can decide on further steps.
Market depth. Shows the ratio of buy and sell orders. Used as an additional tool to assess the situation.
Trading history. Reflects the last transactions performed.
Open applications. Helps to see a list of all active transactions.
Order creation area. Here the type of application, the approximate number for buying / selling cryptocurrency, and, if necessary, the price are written down.

Commissions

Any crypto exchange makes money on commissions, so when planning your work you need to take this expense item into account. To save money from this position, you should give preference to sites with a small payment. Although, in most cases, the commissions are the same for everyone, plus or minus.

Commission fees are individual for the maker (the person who submits the application) or the taker (the user who is interested in such an application). For example, in Eksmo and Currency the commission size is 0.2% for everyone, in Krex 24 and Binance - 0.1% for taker/maker, in DSX - 0.25% for taker.

Glossary of Cryptocurrency Trading Terms

Below are some of the terms that you are most likely to encounter on your educational path leading to the tangible experience of exchange trading with digital money.

Bitcoin is the main and first cryptocurrency. A detailed review of Bitcoin .

Altcoins - From the word alternative coins (Coins), alternative to Bitcoin. Any cryptocurrency that is not Bitcoin - Altcoin

Cryptocurrency exchange - Platform for making trade transactions, namely buying/selling cryptocurrencies

Get a 10% discount on trading fees on Binance using the code “ CRYPTOSLIVA ” or by registering using this link

Terminal - A page on the exchange through which trading is directly carried out

Exchanger - A platform that allows you to exchange (convert) one type of money into another. In our case, it will be useful for replenishing the exchange balance.

Order - Literally translated - order, literally - order. Exchanges operate on the principle of placing orders from some traders to others to buy or sell an asset. Those. when we buy, the buying process itself occurs after our order is executed, when a buyer or seller is found for us.

Bulls - A type of traders who earn money according to the traditional “buy cheaper - sell more expensive” scheme. By analogy with bulls, they pull the course upward, raising it with their “horns”

Bears are rivals of bulls, the main activity on the stock exchange is playing shorts. The bears' earnings are based on the sale of an asset as collateral with the possibility of redemption at the cheapest price.

How to trade cryptocurrency: basic rules

To get results from cryptocurrency trading, you must follow several rules:

Follow the strategy. The mistake of beginners is that they change trading approaches every time, jump between different options, and as a result receive losses. It is important to follow a certain system and adjust it taking into account the experience gained and mistakes.
Remember to diversify. Try not to invest money in one direction; work with several exchanges. This allows you to avoid losing all funds in the event of hacking or the wrong choice of payment instrument.
Focus on fundamental analysis, not forgetting about technical analysis. When analyzing the market situation, use different tools to make the correct conclusion about a change in the direction of the coin’s movement.
Don't trade on margin. Many traders take risks and take such a step in order to immediately recoup their costs, but in the end they end up with an even greater debt hole.
Don't rely only on intuition. Before submitting an application, analyze only facts and analytics, do not trust only luck.
Use different types of orders, including take profit and stop loss.

Following the advice discussed above can reduce the risk of losing money in the first week of work. Focus not on the large sums that can be earned, but on the training required to work with cryptocurrency.

Earning money through arbitrage

The price of the same asset often varies greatly across different trading platforms. Therefore, some people are interested in how to make money on the difference between cryptocurrency exchanges. The essence of the method comes down to the following.

For example, on Bitfinex the Bitcoin rate today is $7,220, and on Binance it is 6,900. Therefore, the trader buys BTC on Binance, transfers it to Bitcoin on Bitfinex, sells it there, for example, for Tether - a stablecoin pegged to the US dollar exchange rate, and then returns USDT to Binance, and repeats the operation.

You can sell crypto for fiat currency, for example, for the dollar, but this method is more difficult, since it is difficult to find the difference between crypto exchanges, where a digital asset can actually be sold for fiat, and then return the fiat to the starting point without losing part of the funds due to payment commissions for transfer and conversion.

Pros and cons of cryptocurrency arbitrage:

profit on theory is guaranteed;
the algorithm of actions is extremely simple;
when making a transaction, there remains a risk that by the time the cryptocurrency reaches another exchange, the rate will change;
Often a significant difference arises with small crypto exchanges, where it is risky to deposit money.

Types of trade

Using cryptocurrency as a base instrument involves using one of three types of trading. Let's briefly look at the features of each option:

Spot. Purchase and sale subject to the transfer of funds to another participant at the current rate. The price that is used for the transaction is called “spot”. Therefore, when conducting a purchase and sale transaction, each party must have an asset. When assessing market conditions, spot trading is assessed first.
Marginal. Such trades involve obtaining a loan for a certain amount. Margin can be offered by the exchange platform itself or other users. The collateral is the money that is on deposit with the user. A percentage is charged for using the service, which is taken into account when calculating the amount for refund.
Futures. The essence of the transaction is the purchase/sale of cryptocurrency with a delay. In this case, the parties draw up a certain agreement, which fixes the time and price. The use of futures contracts allows you to lock in income when trading in a market with high volatility. The cost of futures is formed on a transparent basis and depends on the demand for a certain cryptocurrency. The peculiarity of such trades is that the buyer does not see the cryptocurrency itself, but receives only an agreement with a guarantee of its fulfillment in the future.

Trader psychology – 4 golden rules for successful trading

A universal rule for all stock exchange players is that you need to engage in trading with a cool head , confidently and calmly. The most patient and calculating ones remain in the black.

Read and remember these rules carefully, and your earnings on the stock exchange will increase many times over!

Rule 1. Don't be greedy

Greed has ruined many traders. If the exchange rate is steadily growing, you should not hope that by some kind of inner instinct you will guess the peak of the rise and earn the maximum.

Murphy's Law for stock traders says: if you decide to wait for a currency to rise in price “a little more,” you can be sure that a decline will follow.

Keep the saying about the bird in your hands in your head.

Rule 2: Be patient

And the opposite rule. If you bought a currency at one price, and the next day it went up a little, don’t be content with the crumbs.

Thousands of times before, cryptocurrency rates, having remained unchanged for several weeks, suddenly suddenly began to grow and rose 5-10 times.

Rule 3. Always look at the order book

The order book (also known as the exchange book) is a table of orders for the purchase/sale of cryptocurrency. If there is a shortage in the buyers' column and an oversupply in the sellers' column, there is a chance that you will not be able to sell the currency at a price that suits you. There will be no demand.

Rule 4. Consider trading volume and cryptocurrency capitalization

The demand for the cryptocurrency you are interested in in the near future depends on the trading volume. And capitalization directly indicates the popularity and demand of a currency. The more fiat money invested in digital coins, the livelier and more profitable the trading.

Real trading experience in this video:

How to trade: broker, types of analysis and strategies

Before you start the trading process on the stock exchange, you need to register on the broker’s website. After this, it is worth learning the basics of fundamental / technical analysis, and at the next stage, choose a strategy for further activities and follow it during the trading process. Let's look at each of the methods in more detail.

Choosing a broker

To trade on the stock exchange, you must choose an intermediary whose functions include assistance in making transactions. For his services, the broker helps in carrying out operations and controls the process. Its involvement is relevant for beginners who cannot yet open an account, submit an application and are not familiar with the intricacies of such work.

If intermediaries are involved, it is the broker who sets the value of the assets. When determining the price, it takes into account the situation on large exchange platforms. In fact, crypto exchanges easily take on the functions of a broker, so there is no need to choose a separate company. You can use the Binance, Baybit, Currency, Bitmex, Veltrait, Roboforex and others as an intermediary.

Fundamental/technical analysis

When trading cryptocurrencies, it is important to use all types of analysis to make the right decision. The basic areas include:

Technical analysis. It involves monitoring and analyzing the price movement chart. The essence of the method is to find different technical analysis figures that help determine the current trend and choose the right future direction. Such control is necessary to correctly set stop loss and take profit.
Fundamental analysis. What is taken into account here is not the appearance of the chart itself, but different market situations that directly affect the exchange rate movement. It is important to take into account news, analysts’ opinions, the size of the current volume, etc. So, if transactions are made with cryptocurrency on a daily basis, it is liquid. At the same time, news about the legalization of cryptocurrency or, conversely, its ban can affect the movement of the rate up or down, respectively.

Strategies

As noted, it is necessary to trade if you have a strategy, without which trading turns into ordinary roulette. Today you can find hundreds of different systems for beginners, but as an example, we will highlight several options:

Scalping. It involves opening a large number of orders in a minimum period of time. In some cases, the transaction time can be up to 2-3 seconds. Recommended for use with intermediaries who charge a minimum commission per transaction.
Hold strategy. The idea is to buy and hold cryptocurrency on your balance sheet for a further “reset” after the price rises. The sale may take place several years after the purchase.
Intraday trading. As the name suggests, the purchase and sale of an asset occurs throughout the day. Margin is often applied when placing a trade. The main varieties include RSI, Stochastic and others.
Position trading. The peculiarity of trading is the purchase of cryptocurrency for a long period, taking into account trends and price analysis. This strategy is good if you use fundamental analysis.
Exchange rate arbitrage. You need to buy cryptocurrency on one exchange at the lowest cost, and then sell it at a higher price on another site. The resulting difference represents the trader's profit. Note that this method has practically lost its relevance and is almost never used.
Impulse trading. The idea is to conduct operations during periods of active market movements. The transaction time can vary - from 1-2 minutes or more. Much depends on the strength of the impulse and the possibility of a market reversal.
Trading with a bot. The advantage of the method is that a special bot program works for the trader, which makes purchases and sales taking into account a given algorithm. The trader’s function is simply to watch the robot.
Breakthrough trading. When monitoring price movement, a market participant detects moments when the price curve passes through support/resistance levels. This is especially true when the cost decreases and when using promising cryptocurrencies.
News trading. Involves the purchase/sale of virtual coins with a focus on current news. With proper analysis, you can understand how a certain event can affect the dynamics of price movement.
Trading for a rebound. The trader focuses on price movement and the interaction of the curve with support/resistance levels. The point is to catch the moment the curve “bounces” from the above lines.
Rollback strategy. A market participant must catch a situation when the trend changes for a while, and the value of the selected asset goes in the opposite direction. The goal is to buy an asset at a lower price and sell it at a high price.

These are just some of the strategies that can be used in trading. They can be mixed, supplemented and changed taking into account the experience gained.

Trading using EXMO as an example

The Eksmo exchange is in great demand among users from the CIS, so we will consider it as an example. Here you can trade Bitcoin, Ethereum, Litecoin, Tether, Monero and other coins. The general algorithm of actions is as follows:

Create an account on exmo.me by clicking on the “Register” button and filling out the required fields.
Confirm your registration. To do this, go to the letter you receive and follow the link.
Top up your balance to trade cryptocurrency.
Go to the “Trading” section and select the appropriate currency.
Analyze the chart of the selected pair, for example, BTC/USD.
Select the type of the appropriate order - limit or market.
Fill out the fields provided and place your order.
Wait for the order to be executed.

This is a short example, but it helps you understand the principles of cryptocurrency trading. The same approach will be relevant for other crypto exchanges.

Differences between the cryptocurrency and the stock market

Remember one thing, the market is incredibly dependent on external events. If we are talking about the crypto market, then every project that has survived its ICO and has reached the point where its cryptocurrency is now traded on exchanges - there is always their own news and announcements that lead to jumps in the price of their asset.

Moreover, there is a tendency that from time to time the market reacts differently to certain types of announcements. For example, about a year ago, almost any exchange announcing the listing of a new cryptocurrency “pampila”, its value decreased by at least 20%.

OmiseGO course reaction to Bithumb listing

The chart with a time frame of 1 day shows how the cost of the OmiseGO cryptocurrency in the trading pair with Bitcoin has changed after the announcement of the Bithumb exchange. By the way, you can also see two green candles (the first of which has a large shadow) at the foot of the announcement; they indicate a suspicious increase in volumes before such an event. There is a possibility that there were people who had information about the listing several days before the event.

What else does the value of cryptocurrency depend on?

Having analyzed more than one hundred news items and impulses on the charts, several types of announcements from projects were identified that lead to an increase in the volatility of the asset. It is worth considering that this list is typical purely for the crypto market, nothing else is given.

Event	Influence
Conducting an ICO on the Binance launchpad	⭐️⭐️⭐️⭐️⭐️
Contest/Competition from Binance	⭐️⭐️⭐️⭐️⭐️
Listing on a major exchange	⭐️⭐️⭐️⭐️
Mainnet release	⭐️⭐️⭐️
Wallet release and similar announcements	⭐️⭐️
Partnership announcement	⭐️⭐️
Airdrop	⭐️⭐️

Let's explain a little about each point:

IEO on Launchpad - Launchpad is a completely new project from a well-known exchange in the form of a platform for conducting ICO - in simple words, the initial release of tokens to exchanges. It is difficult to make money with this event, but the result will be worth it. In 2022, 3 large ICOs took place: Fetch, Bittorrent and, most recently, CELR. We will look at the operating principle of the launchpad in more detail later.
Competition Binance (competitions from Binance) are traditional competitions organized by the Binance exchange almost from the moment of its inception. Usually these are competitions for trading volumes over a certain period. In the official sources of the exchange, an announcement appears about the start of a competition for maximum traded volumes on a certain cryptocurrency; the winner at the end of the competition shares a pool of money pre-allocated for reward in the equivalent of the cryptocurrency on which the trading took place. You can follow such events in Binance chats or on Twitter.
about the listing above, here it is worth adding that recently adding coins to sites has been bringing less and less benefit, although if you follow the project, then it is quite possible to predict the addition of a coin to a particular exchange. For example, ICO of large projects in the future a priori implies listing on other exchanges; it is difficult to imagine a new project entering the ICO and being ignored by such exchanges as Bithumb, for example.

Advantages and disadvantages

When choosing cryptocurrency trading as a direction for making money, you need to take into account its strengths and weaknesses.

The advantages include:

Huge selection of trading instruments.
Possibility to trade 24 hours a day, seven days a week.
Availability of cryptocurrencies on most trading platforms.
The constant emergence of new cryptocurrencies, which, with long-term investments, can bring substantial profits.
Possibility to start with small investments.
Decentralized and secure trading system.
Possibility of online trading.

But there are also disadvantages:

High volatility, which can lead to loss of money.
The risk of losing a deposit in the absence of a strategy.
Need for training.

Cryptocurrency wallet

To start trading, you will also need wallets to store cryptocurrencies. Be sure to try to keep them as safe as possible. Create very complex passwords so that no hacker can easily crack them.

In addition, do not store passwords on electronic media or save them in browsers (account memory function), as if your system is hacked, hackers will immediately have access to your finances in the form of cryptocurrency. Write down the passwords on a piece of paper and put them in your desk (safe). In this case, it is not possible to obtain your passwords using the Internet and electronic media.

I would like to say separately about web wallets, which are the most popular. Choose only high-quality sites that provide you with the opportunity to store cryptocurrency on their service. For example, for the Bitcoin coin there is a good wallet blockchain.com, and for storing Ethereum - myetherwallet.com.

If you use unverified resources for storing digital currencies, you can end up in a situation where the site will one day close and stop serving users. Accordingly, all the cryptocurrency that was stored on this service will pass into the hands of the site developers. This event has already happened with a Bitcoin storage wallet called Mybitcoin.

Choose only proven and reliable crypto wallets that have existed for a long time and regularly present their services to people.

How to trade using robots: types, pros and cons

Lately, cryptocurrency trading using trading bots has been gaining popularity. This category includes programs that have built-in indicators for monitoring rate changes and automatic transaction functions. At first, such bots were used in the currency and stock markets, but today they are actively used in the field of cryptocurrencies.

Conventionally, robots are divided into two categories:

Trading. They work on the principle of comparing purchase and sale prices on one exchange. The program creates orders in order to bring profit to the user. In most cases, the strategy generates income, but in conditions of low liquidity you can make a loss.
Arbitration. The essence of trading is to buy an asset on one exchange platform and sell it on another. The robot independently analyzes prices and selects profitable options. Due to the small price range, this method requires a large investment.

If desired, the trader can adjust the robot’s values and thereby create the most suitable strategy.

Advantages of robots:

Huge selection of special programs.
Lack of emotions and work strictly according to strategy.
Trading around the clock - 24/7.
Saving time and the ability to entrust the main work to a bot.

Flaws:

Difficulty in choosing the right program.
Risk of falling for scammers.
The need for constant assistance and adjustments to the robot’s operation.
Relatively small selection of strategies used.

If we consider popular services where you can find a bot, it is worth mentioning:

RevenueBOT (revenuebot.io) is a bot for making money on cryptocurrency. To use it, you need to register on the website, select an exchange and a suitable trading pair, create an API key and a virtual wallet. Next, you need to select an algorithm and launch the bot. The system takes a 20% commission on the profit obtained using the robot. At the same time, there is no need to pay additional commissions and fees.
3Commas (3commas.io). Smart trading terminal and bot for trading cryptocurrency. Over 1.2 billion transactions have been completed using the service, and the average monthly trading volume is $22.5 billion. The program works 24/7, there is a mobile application and a huge selection of strategies.
Cryptorg (cryptorg.net) is an automated trading platform that features a cryptocurrency exchange and a wide range of trading bots. There are more than 500 trading instruments available here, many ways to deposit and withdraw money, and a referral program. All bots and algorithms are available for free.

Trading cryptocurrencies automatically through bots

Telegram bots are often used for automated trading; a detailed review is available at the link . A whole era has passed since the days when trading in the stock market meant working with charts on paper, and now not only are there many services and tools that make the work of an ordinary trader easier, but it is even possible to hire trading bots in Telegram as your assistants, which will open and close transactions automatically.

The principle is simple, a specially designed bot contains a certain algorithm that performs certain actions when certain events are achieved. Often these are certain patterns reflected through the values of indicators, such as RSI, MACD, Ichimoku and many others.

Average trading with a bot

Basically, trading bots are divided into two types:

Regular trading bots - With preset information about closing and opening transactions based on indicators
Arbitrage trading bots - Bots that open trades when they detect a profitable difference in the cost of an asset between exchanges.

Note: In most cases, working with bots requires trading skills at the level of an average trader, and often programming skills.

The most common developer of trading bots is 3commas; below is a video tutorial that allows you to quickly set up your own trading bot:

Earnings from lending

Some crypto exchanges allow some clients to lend to others. As a rule, borrowed funds are taken for 2-3 days, although in some cases the loan is needed for 2-3 months. The amount of profit from such earnings is directly related to the chosen cryptocurrency. Typically, unpopular assets have a higher profit percentage than popular ones.

How investors act:

buy cryptocurrency;
as an option, they invest in some asset, immediately providing it on credit to traders;
after the loan funds are returned, they receive a profit, and if the chosen crypt has grown by that time, then they also receive income from the growth.

Interest on the use of funds may be paid to the lender daily or at the end of the agreed period.

Pros and cons of cryptocurrency lending:

average profit within 30% per annum;
risks of non-return, which are reduced if the trader is a professional with a large amount of his own funds, and the cryptocurrency exchange is large and respected;
this method of earning money is available to beginners who earn income without actually doing anything.

What cryptocurrency pairs are traded?

What cryptocurrency pairs exist? What is the best way to trade for beginners to make money?

Crypto exchanges have quite an impressive arsenal of pairs. The most volatile cryptocurrency pairs:

ETH/BTC (Ethereum to Bitcoin);
BNB/BTC (Binance coin to Bitcoin);
XRP/BTC (Ripple to Bitcoin);
LTC/BTC (Litecoin to Bitcoin);
BTC/USD (Bitcoin to dollar);
ETH/USD (Ethereum to dollar);
DASH/BTC (Dash to Bitcoin);

Please note that each cryptocurrency, in addition to the regular dollar, can also be purchased for Bitcoins. This attitude towards this currency is not without reason. It is like a “standard”, like an “index” in the crypto world. Therefore, Bitcoin will always be in demand on the market and can be used simply as an investment.

Any cryptocurrency pairs are suitable for trading for beginners. Most are trying to find a “gold mine” (a pair that will bring in “loot”). As experience shows, such a search and focusing on one instrument is one of the reasons for losing money.

How investors lose money on the stock market;

In cryptocurrency trading, a sound approach and skill are important. Those who find themselves where it is most profitable now earn money. An experienced trader never gets hung up on any one instrument. If Bitcoin is growing today, then it is worth buying it. And if after a week Ethereum began to grow, then we sell Bitcoin and buy Ethereum. Never try to win back lost funds. Always act according to circumstances.

If a pair begins to grow steadily, then it makes sense to switch all your attention to it, because where there are movements, there are chances to earn money quickly and now. Isn’t this what a trader needs?

Basic trading rules

In order to trade profitably and successfully, each trader must follow a certain algorithm.

Reliable exchange

An exchange with large trading volumes and, accordingly, a large number of transactions can be considered reliable. Also important are reviews of sites from experienced traders.

Currency pairs

It is currency pairs that are the objects of trading. These are two currencies on the ratio of which a trader makes money. The development of technology has led to the emergence, in addition to fiat currencies, of cryptocurrency. Now exchanges offer earnings by trading the pair Bitcoin/Dollar (BTC/USD), Ethereum/Dollar (ETH/USD) or two cryptocurrencies, for example, Bitcoin and Ethereum (BTC/ETH).

When choosing pairs for trading, you should pay attention to some features. You should choose from the most liquid pairs that can be quickly bought or sold quickly. In such cases, a trader with large funds will not be able to influence the value of the asset.

An indicator such as volatility (changes in exchange rate) should be taken into account. Experienced traders are able to convert sharp jumps in the value of cryptocurrency into profit. For beginners, sudden changes are fraught with losses. In this case, it is better to pay attention to more stable pairs.

Assessment of the situation

To make money on the cryptocurrency exchange, you should correctly determine the trend that has formed in the market for a specific currency pair and make all decisions based on the situation. It is better to buy an asset after the value of the currency has fallen below the average level and is approaching the previous minimum. A trader must know what a stop limit is (an option that will limit the possible loss if the price moves in the direction opposite to the expected one).

In the case of a sale, the situation looks a little more complicated. If the currency does not have clear prerequisites for growth, you can close the transaction after it approaches the maximum level. But with a clear upward trend, there is a possibility that it will be able to break through the previous maximum level. In this case, even not the most experienced trader can make significant money with a minimum deposit.

Trading Tools

Proper use of tools, signals and understanding of how they work can significantly increase the chances of success. Also, at the initial stages, it is recommended to withdraw part of the earned funds to a bank card or e-wallet.

What to do if you are in the red

So, you purchased what you thought was a currency at an excellent price, however, the price continues to fall and does not rise for a long time. What to do?

The first thing you need to do, or rather, what you don’t need to do, is to sell the currency for less than the price at which you bought it. Be patient and just wait. It cannot be that the price will not rise again. It is very difficult to overcome your desire not to go into an even greater loss, however, if you overcome yourself and your greed, you risk being left with a profit.

Trading with leverage

Trading using leverage, i.e. using a margin mechanism, has been introduced into a separate type. When it comes to talking about whether it is possible to earn money on a cryptocurrency exchange, this type of trading is not recommended for beginners due to the high risks.

What is the essence of margin trading? When using leverage, a trader opens a position with a size that exceeds his available cash, using borrowed funds from the broker. This allows you to make more profit if the forecast is correct, but also lose more money if it is incorrect.

For example, a trader has $1,000 at his disposal, and the value of ETH is $250. This means you can buy 4 ETH, wait until the ether grows and sell. If the price rises to $300, then the profit will be 4x50=$200. If the ETH rate does not rise, but falls, then the trader can close the position with a minus or wait until the rate rises. Even if the Ethereum price drops to $1, the trader will be able to hold the position since he owns 4 coins.

In the case of margin trading, things are different. If a trader uses a leverage of 1:10, then with $1000 he can buy not 4 ETH, but 40! If the price goes up and grows, for example, to $300, the profit on such a transaction will be 40x50=$2000!

However, if the price goes against the trader, then the loss, like the profit, will begin to grow much faster. Losing a thousand dollars will occur if the price of ETH falls from $250 to $225. Once the price drops to this level, the exchange will liquidate the trade and take $1,000 from the trader, who will be left with nothing.

Therefore, it is important to consider that along with an increase in risk potential, the risk of losses increases significantly.

Another important feature of margin trading is the opportunity to make money not only on growth, but also on decline. For example, if a trader sees that ETH is going to fall, then he opens a trade to reduce it. On his order, the broker sells a certain amount of ether at a fixed price. When, in accordance with the forecast, the price of ETH decreases, the trader closes the transaction, that is, he performs the reverse operation, buying ETH and giving it to the broker, and keeping the difference in value for himself.

Let's explain with an example. The trader has $1,000, 1:10 leverage, and sells ETH when Ether is $250. The broker, on the trader's orders, sells 40 ether coins for 10 thousand dollars at a price of 250. The rate drops to 200, and the trader decides to take profit. He closes the sale transaction, and at this moment the broker buys 40 ETH coins borrowed from him by the trader for 200 bucks, which is $8,000, giving the trader the difference with the initial proceeds of 10 thousand USD - $2,000 profit.

The problem would arise if the rate went up, then when the figure reached $300, the loss from the sell position with a leverage of 1:10 would be $1,000, which the exchange would write off from the trader’s account.

How traders involved in margin trading act:

find an exchange that supports leverage trading, for example, Bitfinex;
replenish the balance, select leverage and trade;
When trading, it is important to correctly calculate where the margin levels are in order to understand where the deposit will be drained.

Pros and cons of margin trading:

with the correct forecast, a very large profit;
if the forecast is incorrect, the loss will be equally impressive.