- how to start trading
start trading
How to begin trading? What are the steps you need to take to earn money as a trader? It really comes down to some fundamental principles that anyone can learn and make a career out of, even if you don’t want to work in finance or any other industry. In this article, we will explain these things and discuss the most important tips for beginning traders, including choosing a platform (trading account) and picking an online broker.
- Choose A Platform
There is no single best-trading app. As always, it depends on what you prefer. But there are several good options available. Some are free platforms with basic features that allow users to buy and sell cryptocurrencies (like Bitcoin). Others offer advanced tools such as margin trading, leverage trading and many others. We use Coinbase as our main platform. Once you have your idea and identify which trading tools you like best, try to find and install them here.
- Use An Online Broker
If you are serious about becoming a successful trader, then you must choose a trading platform that allows you to trade crypto-assets. While all brokers offer a similar amount of choice and support, they differ in their fees, security offerings and level of service. So you should decide whether a broker will help you grow rapidly, or provide more options over time, depending on your investment goals. The main advantage of selecting a brokerage lies in its reputation and access to educational resources. For example, some offers courses, webinars, tutorials and guides on everything from general stock market tips to strategies for beginners. These materials can make learning and training easier and faster than learning at home. If you are new to investing, you can also sign up for one of the top online education programs provided by each brokerage firm. Remember not to get caught without having an opportunity to practice and test before your first trade. Many people do not have enough time or experience to make the right judgment calls or be aware of the risks when making trades. Our favorite broker, Robinhood, has one of the widest selections of beginner-friendly apps to explore, giving you an opportunity to discover what works, what does not and which strategies would work best for you.
- Build Your Portfolio
As we have mentioned above, there is no singular “best” platform where you can start trading crypto-assets, but some are better than others based on different criteria. You need to build a portfolio with assets you are comfortable with, and can afford to lose. This is how a stockbroker manages to go from zero to $1 billion or more on his very first trade. Most stockbrokers open positions to keep their capital (including cash and investments) safe, so they rarely ever risk losing too much of their own portfolio. On the flip side, you need to know that not every broker will allow you to build your portfolio and trade with the same portfolio from the get-go. Take into consideration your budget and time available. If you have lots of extra time, you might want to wait; however, if you lack funds or only have limited cash flow, you may want to consider going directly into trading. Of course, you have the option of finding an existing person (whom you trust with money you might not have in case your trading plan goes south), or perhaps hiring a broker to manage a dedicated trading fund for you. However, you probably want to avoid doing this until you have some more time and experience. And remember that you should also be prepared with some financial support systems in place—like a retirement savings fund and emergency funds—to ensure your trading strategy doesn’t fail. There are numerous online tutorials, books, podcasts and forums offering advice for building your trading portfolio. One way to quickly develop this structure is through analyzing past performance. That being said, not everyone becomes a millionaire overnight. Successful investors tend to play around with various positions to see if they are profitable because they don’t know what exactly they need to do to achieve this goal, and may wish to try again or change positions later. Building a portfolio takes time.
- Know When & Where to Trade Crypto-Assets
All financial markets are cyclical, so any profit you make will be lost and gained again. That’s why it is essential for traders to understand the nature of their market. Not all cryptocurrencies grow at the same rate, so knowing when you should move in the opposite direction is important. This requires identifying patterns, trends and key events that could influence price action in a specific asset class. At Fruity Ventures, we take data and statistics into account. Therefore, we are constantly working on developing accurate indicators that show us the state of the art for a particular cryptocurrency category, such as value, volume and daily volume. Because we work closely with clients, we also look at how prices develop throughout time periods (i.e., weeks, months or years). These indicators tell us who is likely to benefit while avoiding those that won’t. With this information, you can invest wisely and select a suitable trading strategy to reach your goals.
- Learn About Regulations
Cryptocurrency-related investments are subject to extensive regulation around the world. Whether it’s exchange-traded products (OTP), securities, futures and other derivatives, or commodities and agricultural goods, these categories require certain regulations in order to govern their activities. The central bank regulates OTPs, whilst exchanges offer regulated OTCs and futures to retail consumers. Commodities include oil, gold, silver and metals, while agriculture includes grains, meat and dairy. By law, you must be familiar with the laws that apply to your chosen sector, and how well you comply with those rules will determine how smoothly you operate and trade. Regulators may set standards or requirements that vary between countries, and those standards can vary significantly. For instance, it takes more effort to register your business in Norway, compared to South Korea. However, you still must abide by local government regulations regarding taxes, sales, contracts and employment. Even within a country, multiple jurisdictions regulate each sector differently, making it more difficult than just owning property within one region to maintain compliance. Furthermore, regulations in one area don’t necessarily mean it applies elsewhere. For example, in Denmark, the Financial Markets Supervisory Authority (FSMFO) oversees registered trading companies. They check your company for compliance in both Danish and international markets. Likewise, in Singapore, a number of organizations are concerned with regulating ICOs and private equity firms. Other examples include:
In general, you should do your due diligence and verify everything you read or hear about crypto-assets, especially about their legal status, regulatory status and legal implications, by speaking with your local office of the Securities and Exchange Commission (SEC) or visiting the SEC’s website. Also, be sure to consult your attorney and/or a licensed investor advisor. Cryptocurrencies are currently unregulated in the United States, meaning that you don’t always need to pay your taxes and penalties because you aren’t required by federal tax law to report income from the sale of anything, including virtual currency (crypto-assets). However, we recommend researching your situation, as crypto-assets have the potential to attract fraud and crime. More importantly, they are unregulated in the U.S. by the European Union, which means that no EU-based jurisdiction can hold or collect taxes from U.S.-based crypto-asset owners. Finally, the Office of Foreign Assets Control (OFAC) is responsible for overseeing foreign governments’ interests in crypto-assets. Unfortunately, US citizens aren’t allowed to own, trade, invest, receive dividends or interest from crypto-assets. And remember, unless the legislation changes, you will always be liable for taxation on gains and losses caused by crypto-asset transactions.
- Read Up On Trends and Market Movements
Every day, the cryptocurrency market is actively changing, as new investors enter the space. Just like stocks and bonds, you will get news related to this fluctuating landscape. Especially if you haven’t traded in recent months, this is a great time (and a terrible time) to pick up a book and familiarize yourself with current trends. You’ll notice changes in demand and supply, how an asset performs versus peers, and how it responds to macroeconomic factors. Also, if you have holdings as liquid as a fractional share, you’ll want to watch how the prices respond to future developments and announcements. These stories can often give insight into how the blockchain industry will evolve over time, and provide insights into the long-term outlook for individual coins. Keep in mind that trends are generally short-lived, although sometimes their causes are longer-lasting.
- Invest In Yourself
One thing that seems obvious is that you need to dedicate valuable financial resources to your learning and professional development. Learning new skills requires more study time; therefore, if you have limited time and energy to devote to research, then it may be wise to skip reading and take classes or attend seminars instead. Another reason to increase your level of education is that it will enable you to make smarter decisions at critical times. Think ahead as well as back, and invest more in yourself and your team. Don’t forget to engage with mentors who can assist with understanding and applying concepts you learn in schools. Remember that a mentor will help your business improve and grow, and to pursue your knowledge, you must also engage in self-learning. Make a conscious decision to educate yourself, and you will become a successful trader.
- Get Feedback From Industry Experts
Many people think about investing without first consulting professionals with financial expertise. After all, what would happen if I invested in something and failed? Well, let me put things another way. First, ask someone about an expert opinion. Second, get feedback about your
