Crypto trading is one of the ways of earning through cryptocurrency. Crypto’s high volatility and several factors make it an asset for crypto traders to understand before investing in it.

To become a successful crypto trader, there are steps to take. In a world where cryptocurrency is becoming the main focus in the financial world, many people, especially in Africa see crypto as a way out of poverty.

In this post, we’ll look at the things crypto traders need to understand about crypto trading. This will help them in becoming successful trader.

What is a Crypto Trader?

A crypto trader is one who has the ultimate goal of making a profit from short-term changes in crypto market prices via crypto trading.

A crypto trader can focus only one crypto coin such as Bitcoin or Ethereum. Or, they may diversify their portfolio by focusing on multiple major coins such as BTC, ETH, DOGE.

Some crypto traders may also focus only on altcoins such as Polkadot, TRON and not bother to trade the main cryptocurrencies.

Things To Consider When Investigating How To Become a Crypto Trader

If you are looking to start crypto trading, there are two scenarios you must consider in you bid to become a trader. They are listed below.

1. Buy & Sell Crypto on the Exchange– You have an option to buy the crypto of your choice on exchange. When you do this, you own the underlying asset of the cryptocurrency. There are several advantages to this if you want to hold the crypto asset for a long term basis. This is however not without risk. The exchange can be hacked, unregulated and may incur fees when you buy/sell fees to the exchange.

2. Trade Crypto CFDs- You also have an option to trade cryptocurrency CFDs with a regulated broker. This option is ore ideal for short-term investment. A crypto trader CFD have the benefit of ‘shorting’ or ‘selling’ crypto CFDs. This means that you could earn from a falling market as a trader. It is however not without disadvantages as general and quick market changes pose a risk investment and must be monitored. You can however test your trading ideas by trying out a demo account.

Things Crypto Traders Need To Understand About Crypto Trading

For you to be a successful crypto trader, you must have known how to make a profitable return on your investment. Here are 5 things you need to understand about crypto trading.

1. Choose a reliable trading platform

Your trading and charting platform plays a key role in your success as a crypto trader. Crypto trading platforms such as Prestmit gives good rate for traders which help in making good returns on their investment. The security of your assets on the platform you choose also go a long way in your success. As you learn about the tokens to trade, it is also important you make research about the platform to use.

2. Choose the right broker

If you’re trading crypto CFDs, you’ll need a broker in order to conduct your trades. Choosing the right broker can be challenging, as there are many options and all want your business. Choose a broker that is regulated, ideally regulated by multiple jurisdiction. Security & safety are also of high importance in choosing the right broker.

3. Choose your crypto trading strategy

Trading is all about making decisions on whether to buy, sell or stay flat on a particular market. Veteran and successful traders have a trading strategy, or methodology to aid in their decision making process. Trading strategies helps to reduce risk as it help to streamline process of information. This may include when and when not to trade, timeframes to focus on, technical indicators and so on.

4. Crypto Investment is risky

Trading cryptos comes with risk considering the high volatility which is constant in this market sector. It is the most risky form of investment and crypto has not been widely adopted in many nations across the globe. Return on investment is not guaranteed when you put your money on crypto assets.

5. Crypto trading is profitable

If you have a well designed strategy aligned, crypto trading can be very profitable. If you’re prepared to do your homework, create a valid strategy & understand the market, you can be successful as a crypto trader. The high risk associated with crypto can merit high reward for you.

Also Read- Where To Buy Top 2022 Cryptos In