21.08.2019

How to Trade Cryptocurrency In 2021 - Fully Explained Guide from Safetrading

Cryptocurrency trading is a complex process of managing cryptocurrency assets, which includes many trading strategies - scalping, long-term investments, arbitrage, margin trading, and is always performed on specialized cryptocurrency exchanges like Binance, BitMEX, Bittrex, Kraken, Coinbase, Kucoin, etc. 
 
I am sure you have regularly stumbled across the news from the world of cryptocurrency. It has intertwined with our lives so firmly that it is simply impossible to ignore. Every day more and more traders enter the market, making profits, and achieving their goals.
 
Everyone wants to know: 
 
What is cryptocurrency trading for beginner? 
 
Is it a magic pill that would change your life? 
 
Or is it a challenging path, filled with fears and insecurities?
 
Table of Contents
 
  1. Fundamentals of Cryptocurrency Trading
  2. Types of Cryptocurrency Trading 
  3. The Best Cryptocurrency Exchanges for Trading in 2021
  4. The Best Cryptocurrency Telegram Channels in 2021
  5. Cryptocurrency Trading Risks
  6. Cryptocurrency Trading Tips for Beginners
  7. Conclusions: How to Trade Cryptocurrency In 2021?
 

Fundamentals of Cryptocurrency Trading

 
 
basics on how to trade cryptocurrency
 
 
As we told you before, there are many cryptocurrency trading strategies, and for each of them there is the special approach. But before choosing your own strategy, you need to prepare yourself for the future trading cryptocurrency path and find out how to trade cryptocurrency. 
 
First, the novice trader must make sure that he has a complete and high-quality "trader's package":
 
  • safe cryptocurrency wallet;
  • secure cryptocurrency exchange;
  • initial capital.
Many newcomers wondering:
 
Why do I need to have a crypto wallet if I can store my assets on the cryptocurrency exchange?
 
The thing is that all the storages on the Bitcoin exchanges are custodial, and they store your private keys, so in a case of a hack attack, hackers will receive access to your funds and be able to steal them. 
 
We, as other cryptocurrency experts, advise to store on the crypto exchange only the assets you will need for trading cryptocurrency - other coins it is better to store on the wallet with cold storage or on the hardware wallet like Trezor or Ledger.
 
One of the most popular questions we receive from traders who want to know how to trade cryptocurrency is:
 
How much do I need to invest in the beginning?
 
We understand that many people do not fully believe in the trading success that is why they invest around $500 to try it, and then, in a couple of months, to make a decision to invest more or to stop trading cryptocurrency. We suppose it is a very wise decision because 70% of newcomers lose their initial investment because of the lack of experience, and it is better to lose $500 and overthink your strategy or stop trading then to lose $2,000 or more.
 

Types of Cryptocurrency Trading  

 
 
strategies of cryptocurrency trading
 
 
Any expert will tell you that choosing a future strategy is one of the first and most important decisions you will have to make. In order for you to clearly understand which type of trading is ideal for you and how to trade cryptocurrency, we will discuss the most popular ones below.

Scalping

 
The first characteristic of scalping is private trades, which actually take about 5 minutes. 
 
The bottom line is that a trader makes money on volatility by opening a large number of transactions every day, the amount of profit from which helps to make good money. 
 
In this case, special attention should be paid to emotions. According to statistics, most scalping traders give up because they cannot withstand the daily stress of many hours. And this is very important - if you are a person who knows how to wait, endure, and has good self-control, then you can try, but if you do not observe these qualities in yourself, then it is better to choose another strategy on how to trade cryptocurrency.
 
Advantages of scalping:
 
  • The cryptocurrency market has a high volatility, so scalpers always have coins, from the rapid growth of which you can profit;
  • Scalping is a trade that does not have huge risks due to the large number of transactions. Any unprofitable trade can be closed by a profitable one in 10 minutes.
Disadvantages of scalping:
 
  • If you want to make a good profit from scalping, it will take a lot of time - maybe even more than 8 hours;
  • Scalping is a very emotional trading that requires a lot of endurance.

Day Trading 

 
Day trading is one of the most popular types of ways on how to trade cryptocurrency. The main point of this trade is that a trader opens a certain number of trades, usually up to 10, during the day, collecting profit from each of them. 
 
Usually the day trader does not carry over his trade to the next day. If, after analyzing the market and news, he realizes that the coin will grow higher tomorrow, then today he closes it with a certain profit, and opens it again the next day.
In addition, it is this type of trading cryptocurrency that is used by many of the cryptocurrency Telegram groups that are listed on our platform, because this is the most optimal strategy for trading in terms of profits, time and emotions as well.
 
Advantages of day trading:
 
  • this strategy is not so emotional as the previous one - scalping;
  • you have less opportunity to lose because your positions are opened during one single day, during which news and trends usually do not change in a quick way.
Disadvantages of day trading:
 
  • you can lose profits during these moments when your deals are not opened (for example, at night, when you closed everything and went to sleep).

Staking

 
Staking is not just a trading cryptocurrency strategy, but rather a long-term investment strategy. Staking is a kind of deposit that you make in cryptocurrency by buying coins that are suitable for it.
 
Fortunately, there are many coins you can buy and receive % from staking them. The full list can be viewed here. Also, the platform Staking Rewards offers the special Calculator, which can show you the expected profit for a certain period of time. 
 
Advantages of staking:
 
  • the initial capital is different for every coin but you may invest even $300 in some cases to receive profit;
  • there are many cryptocurrency assets that can be bought for staking;
  • it does not require much time, and be a good long-term passive income.
Disadvantages of staking:
 
  • you can lose all the investment in case of coin’s price devaluation.

Swing Trading 

 
Swing trading is the most popular not only in the market as a whole, but also among traders who are listed on Safetrading. The essence of this type of trading is that traders open deals for two more days, usually the period stretches to several weeks. 
 
If you want to use this type of trading and know how to trade cryptocurrency with profit, you should keep in mind that you will have to pay attention not only to technical analysis, but also to fundamental analysis, since one single news can change the trend for the next few weeks, which will significantly affect your trading.
 
Advantages of swing trading:
 
  • you have more time to receive profit from coin’s price increasing that if you use day trading;
  • this type of trading cryptocurrency is also not very emotional - you just need to set targets and stop losses, and you will be safe;
  • sometimes, cryptocurrency market news can tell you the future direction of the market much more clearly than technical analysis.
Disadvantages of swing trading:
 
  • you need to set higher stop losses than in day trading, and it means you can lose a lot of money in case you made the wrong decision.

Long-Term Investment 

 
Long-term investment or HODLing is a type of trading that is profitable and suitable for those investors who have a lot of capital. 
 
Why?
 
If you invest $ 1,500 in Bitcoin, then you can wait two years to double your profit, so such an investment is completely worthless. Another thing is to invest $100,000 in Bitcoin, and by doubling it, you will earn another $100,000.
 
Of course, you can invest not only in Bitcoins - many investors today already have a large portfolio of cryptocurrencies, earning on the growth of each of them.
 
Advantages of long-term investments:
 
  • you do not spend time opening deals, analyzing the market, and so on;
  • long-term investments do not require technical analysis - investors most often rely on the fundamentals and follow the news that can move the market in the long term.
Disadvantages of long-term investments:
 
  • if you choose an unsuccessful cryptocurrency for investment, then after a while, at best, you will withdraw a bit less than you invested, and at worst, you will lose most of your investment.

Margin Trading

 
Cryptocurrency trading for beginner is full of different tools and instruments and that is why it is very important to know how to trade cryptocurrency. Knowing even some of them will give you more opportunities for trade and will present more chances of earning profits.
 
Have you ever heard of leverage and margin trading cryptocurrency? 
 
If not, continue reading (if yes, still do).
 
During cryptocurrency margin trading, you will need to borrow selling and buying power to allocate a part of the funds, which will be accessible only when the trade is over and when you return the borrowed capital. 
 
Margin, in this case, is a particular sum that a counterparty (usually a broker or exchange) deposits. The popularity of margin trading leads to an increase in quantity and sums of operations, so it becomes more difficult to track the speed of transactions, market fluctuations, and changes. 
 
However, a significant number of small deals lead to higher liquidity of the market and therefore stabilizes it.
 
On the other hand, leverage trading cryptocurrency allows trading the amount that you don’t possess at the moment. 
 
Usually, crypto services provide 1:10 leverage. This means that for each dollar you have, you will get a 10-dollars buying power. Even though this assumes higher risks, potential rewards can also be sky-high.
 
Advantages of margin trading:
 
  • these trades can bring you fast and high profits;
  • you can trade funds you don’t own (you borrow them).
Disadvantages of margin trading:
 
  • this type of trading has very high risks.
 

The Best Cryptocurrency Exchanges for Trading in 2021

 
best cryptocurrency exchanges 2021
 
 
As soon as you choose the type of trading that is convenient for you and how to trade cryptocurrency with profit, it will be important to think about which exchange you will trade on.
 
Of course, the market offers a large number of exchanges, and newbies are lost because of this. In order for you to understand the advantages and possible disadvantages of each of the most popular exchanges, we have compiled TOP 5 cryptocurrency exchanges for you, that will be a good solution for both beginners and experienced traders.
 
5 Best Cryptocurrency Exchanges 2021 for Trading:

Binance - The Most Popular Cryptocurrency Exchange

 
Binance is undoubtedly the most popular exchange among newbies - almost all traders start their trading with it precisely for the reason that this exchange offers the largest number of trading cryptocurrency pairs and has a lot of guides on how to trade cryptocurrency.
 
The exchange was created in 2014, and six months later, it became the largest exchange in terms of trading volumes.
 
At the moment, the exchange supports 23 languages ​​and is available for traders from most countries - more than 180. Traders from these countries can trade over 400 trading pairs on three types of accounts - spot, margin and futures.
 
The security of the exchange deserves special attention. As the most popular exchange in the world, it is very often subjected to hacker attacks. The good news is that the platform has a certain reserve account, from which money is then allocated to users who have become victims of scammers.

Kraken - One of The Most Convenient Cryptocurrency Exchanges

 
The Bitcoin trading platform was developed for two whole years, that is, it was planned back in 2011, but it was finally released in 2013. But two years of expectations paid off - the exchange is one of the safest and most convenient for beginners who want to know how to trade cryptocurrency with profit.
 
Firstly, Kraken supports over 100 trading pairs, which gives complete freedom to trade, and is a great advantage for traders who like to open a large number of trades. In addition to the above, the management released the Kraken mobile app for professional traders. You can download it from the Play Store, App Store and other mobile platforms.
 
Overall, we can say that Kraken is an exchange that deserves attention due to its high level of security and low fees. Having passed the test of time, Kraken remains one of the leaders among cryptocurrency exchanges in the field of security.
 
The exchange is best suited for European traders who want to trade popular digital assets (bitcoin and ether) against the euro. The platform is still quite popular with US and Canadian traders.

Coinbase - The Best Bitcoin Exchange for Professional Traders

 
The Coinbase exchange was developed back in 2012, and since that time it continues to offer professional service for traders, improving everything every year. 
 
The main feature of Coinbase is that it sells cryptocurrency directly based on its market value. This makes it faster compared to competitors, and also allows you to connect various tools - for example, bank transfers. That is, you can buy bitcoins immediately after verification.
 
Another feature of Coinbase is accountability to the US legislation on the activities of exchanges (license). This forces the administration of the exchange to collect personal data from users, which is far from the liking of many of its clients, who are accustomed to anonymity.
 
Nevertheless, the security of this exchange is quite high, although there have been some scandals about this before. In general, this exchange is quite easy to use and reliable, has many tools, but it seems to us that it cannot be called the best on the market.

Bittrex - The Safest Cryptocurrency Exchange

 
Bittrex is a cryptocurrency trading platform that has been operating for 5 years already, and during this time has managed to earn the place in TOP-10 cryptocurrency exchanges. More than 200 trading pairs are available here, and this is one of the best features of this exchange.
 
Furhermore, the exchange looks perfect for newcomers planning to apply arbitrage trading. What is arbitrage crypto trading? It is a trading strategy in which a trader buys a coin in one market and sells it in another market at a higher price.
 
Safetrading chose the most important feature of this exchange - over the entire period of its existence, this exchange has never been subjected to hacker attacks, which clearly characterizes the level of security very positively.
 
Bittrex is very popular among the US citizens, and may be inconvenient for newbies to use but still has some educational guides on how to trade cryptocurrency. Since the level of security on this exchange is high, patience is required in going through the identity verification procedure.

Huobi - One of The Most Integrated Cryptocurrency Exchanges

 
Huobi is a global ecosystem that mainly focuses on Asian markets, and has been operating since 2013. The complexity of this exchange lies in the fact that it combines two of the most important qualities - the highest level of security and a large number of trading tools.
 
Huobi exchange has special trading apps for all platforms and operating systems. The trading interface of the platform is simple and convenient, it will be understandable for beginners who want to know how to trade cryptocurrency and will be appreciated by trading professionals.
 
Despite the fact that the exchange team claims that it cannot be hacked and that it provides the most convenient tools for crypto trading, it is not the most popular among traders.
 

The Best Cryptocurrency Telegram Channels in 2021

 
advise on how to trade cryptocurrency
 
We won't talk too much about cryptocurrency signals here, you can find more detailed information here. Generally speaking, cryptocurrency signals are predictions of price movements on the cryptocurrency market, which are made by experienced traders using technical and fundamental analysis.
 
As you may understand, crypto signals are a very good tool for people who want to learn how to trade cryptocurrency.
 
How do you find good cryptocurrency signals?
 
The fact is that since 2017, the popularity of cryptocurrency has begun to grow rapidly, and at the beginning of 2021, market movements exceeded all our expectations. And, it would seem, this should contribute to the emergence of cool services, but it works differently with signals.
 
The fact is that with an increase in the activity of traders on the market, an increased deity of scammers appears - channels that are created with the aim of stealing users' money in one way or another.
 
Therefore, the most important thing for you is to pay attention to the quality of the channel, to the experience of traders, to the free channel, and so on. 
 
For example: if you see a large amount of advertising in the channel, this means that traders do not have enough profit from crypto trading and they are looking for other resources for income, and, accordingly, their signals are not particularly high-quality, or maybe they do not exist at all and they are you will be blocked after the subscription is paid.
 
Also, we advise you to choose the channel with very experienced and helpful traders behind, who are ready to teach you how to trade cryptocurrency with their signals.
 

Cryptocurrency Trading Risks

 
Many newbies get their hopes up when they start trading. It seems to them that there can be no shortcomings here - you register on the exchange, trade and enjoy the money. To our big regret, this is not the case at all - the cryptocurrency market and its volatility create a considerable amount of risks.
 
  1. You can lose a big amount of money
According to statistics, even among professional traders, the percentage of unprofitable transactions reaches 25% on average. We'll even tell you more - these professional traders sometimes even lose 50% of their capital due to drastic changes in the market that are sometimes impossible to foresee.
 
What happened to Bitcoin in mid-February after Elon Musk's tweet, remember? Here's an example of an event that only Elon Musk himself and his friends (maybe) could predict. And those people who were shorting Bitcoin lost a lot of money because of this tweet.
 
That is why it is very important to spend time on proper education to know how to trade cryptocurrency in detail. 
 
  1. You can invest in an unprofitable project
It has become very popular in the market to invest in new projects that have great potential. But sometimes it happens that a project simply depreciates over time, and with it your investment depreciates.
 
In the early stages of crypto trading, we do not advise you to invest in projects at all.
 
Why?
 
First, you are not yet very familiar with the market and how it works. Secondly, you need to feel successful projects by analyzing all sorts of news and insights, and for this you need to have some kind of experience. Finally, you need to master how to calculate profit on cryptocurrency.
 
  1. Presence of scam services
It is also a very well known risk that can affect beginners and professional traders. It can be an exchange, wallet, cryptocurrency channel, or a new project on the market. 
 
Unfortunately, there are a lot of such projects, so you should always double-check each service before you start working with it.
 

Cryptocurrency Trading Tips for Beginners

 
tips on how to trade cryptocurrency
 
We always try to give valuable advice for newbies who really help and work. Of course, we are not talking here about tips for making money, but more about tips on safe trading cryptocurrency and full-fledged training, because this is where any trader who comes to the market should start.
 
  1. Start with low investments
 
As we have already said, the first stages of trading cryptocurrency are generally not the most successful, since during this time you only learn how to trade cryptocurrency. Therefore, it is not worth investing thousands of dollars, as there is a risk of losing them due to lack of experience.
 
  1. Learn new things
 
Do not be ashamed of the fact that you do not know anything - this is even a plus, since you can take only the information on how to trade cryptocurrency you need for yourself. Read, analyze charts, ask questions - this will help you get the necessary experience very quickly.
 
  1. Use crypto signals
 
We have already talked about cryptocurrency signals before. Despite the fact that there are so many suspicious services on the market, you have a good chance of finding a cool and profitable channel with signals to help you get basic rules on how to trade cryptocurrency and practice your acquired experience. 
 
  1. Spend many time learning
 
Never spare the time you spend mastering something new and profitable. Yes, in the early stages you will need to sit for hours and think over a large amount of information, sometimes lose money, but with the right approach, all these investments will pay off very soon.
 
      5. Use bots for automatic trading

Copy-trading crypto bots help automatically follow the signals of successful traders and make a profit. Note that you might need to install additional software in that case.
 

Conclusions: How to Trade Cryptocurrency In 2021?

 
There are many classes of financial assets, but none of them can compare to cryptocurrencies. 
 
Cryptocurrency trading is attracting users from all corners of the world because everyone wants to stay at home, make profits, and experience all the thrills of making the right decisions!
 
Unfortunately, the market for crypto trading is quite young, so consumer protection is rather weak, and traders need to think about their safety on their own. 
 
Will something change? 
 
I hope so, but for now, investors need to take all possible measures to protect their assets. 
 
We hope that our tips on how to trade cryptocurrency will help you make the right decisions in your future crypto trading and investing path. You need to remember that this way is long but if you do everything carefully, you will enjoy the results!
 
Any cryptocurrency can make you a millionaire or may disappear overnight, along with all your money. That is what makes trading cryptocurrency so scary and exciting at the same time. 
 
Big chances are never small stakes, so if you want to learn how to start trading cryptocurrency and to make money, you need to be ready for all the twists and turns. 
 
The only thing is clear: cryptocurrencies are strengthening their positions, and they are here to stay, introducing more and more millionaires to the world. 
 
Do you want to become one of them? 
 
Use our guidelines, remain calm, and enjoy the ride!