304 North Cardinal St.
Dorchester Center, MA 02124
Altcoin trading has become one of the popular ways to make become a millionaire online without any stress. In this article, I will ve explaining how to trade altcoin and the strategy you can use to become the next altcoin millionaire.
The trade is not complicated, and it allows you to make money even when there is a fall in prices. The secret to being a successful altcoin trader is being able to predict precisely whether the prices will fall or rise.
To successfully trade altcoins, you need to know the dynamics of cryptocurrency markets because trading altcoin has a high risk.
In this article on how to trade altcoin, I talked about the two strategies of trading in altcoin both pros and cons of trading altcoins, and how you can also start trading altcoins.
You might have heard that people have made millions trading cryptocurrency, but there is an equal number who have lost a significant amount of money.
Trading cryptocurrency is similar to buying and selling in the forex markets. However, fiat trading operates under strict monitoring of key players (especially central banks of different jurisdictions), while the cryptocurrency market is unregulated.
Altcoins is highly volatile because of their free operation model. Therefore, how can you trade profitably in the market? This post is a comprehensive guide to help you understand what altcoins are and how to trade altcoins.
Before getting down into the inherent aspects of altcoin trading, it is crucial to understand the term “altcoin.” This term is used to refer to cryptocurrencies other than Bitcoin such as Ethereum, Dogecoin, and Ripple.
Cryptocurrency trading means exchanging one coin for another in exchanges such as Bittrex and Binance. The exchanges charge users a fee for using their platform to trade coins.
To help people make the right trading decisions, the exchanges provide advanced market analytics on listed cryptocurrency pairs.
To begin cryptocurrency trading, there are two main strategies you can adopt.
This is a way of trading in which traders buy cryptocurrency but only hold them for a few minutes, hours, days, or weeks. Holding the altcoins for a few months is also said to be short-term trading.
An example of this strategy is day trading tokens. As the name implies, this is a form of trading whereby people hold altcoins for a short period, maybe a few seconds, minutes, or hours, before selling them for a profit.
If you think that the price of an altcoin will rise fast within a short time, day trading can be profitable.
Here are some advantages and disadvantages of day trading cryptocurrency.
The primary benefit of short-term trading is that traders have the chance of making high returns. Not like traditional currencies in which price changes rarely go over 1%, altcoins can experience significant swings quickly. Prices of altcoins can double in hours or overnight.
Another notable advantage of short-term trading is that the cryptocurrency market does not follow the Pattern Day Trading Rule.
This is a rule used in the United States to not allow people with less than $25,000 in their trading account from trading for more than three days each week. You can trade with any amount all day for the entire week with altcoin trading.
Due to the fact that the cryptocurrency market has high volatility, the price of digital coins can swing very fast. This means that to earn returns from short-cycle trading, a significant amount of time will be required to analyze the market.
Traders have to make a large investment to get significant returns which is another major disadvantage of short-term cryptocurrency trading. However, many beginners lack this financial muscle or are not confident enough to pump a lot of money into trading cryptos.
Long-term cryptocurrency trading implies buying altcoins and holding them for a period of at least one year or more. An example would be an individual who purchase Bitcoin in 2009 when the price was about $1 and sold in December 2017 when the price of one BTC had grown to more than $19,000.
The primary advantage of long-term cryptocurrency trading is that it is relatively simple and does not require a significant amount of time. All you need to do is hold onto the altcoin over a long period.
Opposed to day trading altcoins in which a lot of time is required to follow price changes, long-term crypto traders can check the price movement during their spare time. Once you have the altcoin, it is a matter of holding and waiting.
Another major pro of long-term trading is that you do not need a huge amount of money to trade cryptocurrency. You can just buy the altcoins and add them to your cryptocurrency wallet when you want to diversify your portfolio.
The primary disadvantage of long-term trading altcoins is that you could miss opportunities for making quick profits when prices swing within a short time. In some cases, an altcoin’s price reacts to market forces and then falls back to the same position.
In the cryptocurrency market, the volatility of altcoins can help you make profits, but also can cause you to incur losses. For this reason, it is crucial that you understand the basics of altcoins and blockchain technology. Here are some things that you need to understand before starting to trade in the cryptocurrency market.
One important point about cryptocurrency trading is that it is not only you that is trying to make a profit. Hence, try to avoid being influenced by others especially non-experts who post things showcasing how the price will perform at specific times.
The best cryptocurrency trading strategy is to do your own analysis and only make a move when you are convinced about the expected price shift.
You should not borrow money to invest in crypto trading especially if you are a beginner because market swings could sink you into debt.
You should not use money that is meant for other purposes such as rent, medical care, or school. Rather, plan well by setting aside the money to invest in trading altcoins.
Although you might be a coin that you prefer in the market, it is dangerous to put all your funds into it. Rather, you should not put all your eggs in one basket by targeting multiple altcoins based on their performance and expected returns.
To earn profit in cryptocurrency trading, you need to know the risks involved and use appropriate strategies to mitigate them. For instance, although you might be expecting the price of the targeted altcoin to move up, it is crucial to use the stop loss tool so as not to allow an unexpected shift in the opposite direction.
Getting an altcoin wallet is required for you will need to take as a trade altcoin. The cryptocurrency wallet allows you to store, hold and trade your bitcoin and other cryptocurrencies. Based on what you want, you might want to consider Mobile, Hardware, or Software wallets.
The mobile wallet app is among the most recent altcoin wallets designed for smartphones, and you can only use it from your phone. Most users like it because of the added security it provides them. You only need to use your phone to access and store your altcoins.
Moreover, you need to protect your mobile phone with a strong password to avoid losing your altcoins along with your phone in case of theft. Once you realize that you cannot find your phone or your phone is stolen, you need to deactivate it and transfer your altcoins to a new wallet immediately. You may do that using the exchange’s dashboard that supports the mobile wallet you had.
A hardware wallet is another type of altcoin storage device that you can use to store your private keys. To trade your altcoins, you need the private keys; if you lose them, you will lose your altcoins. They are similar keys that you can decide to store in the Mobile wallet. The hardware wallet stores them in an encrypted format and transfers them out still in encrypted form to prevent hackers from accessing them.
The hardware wallets could withstand virus attacks and the keys are stored in the microcontroller. Most of them have an LED screen that allows you to input an access key to transfer the private keys. The access key isn’t transmitted from the hardware wallet, which increases its security. However, there is no record of hackers being able to hack the hardware wallets or altcoins getting lost.
Overall, the hardware wallets are very expensive thanks to the complex circuitry involved. Unlike the software and mobile wallets which are mostly free, the hardware wallet can cost between $50 and $200.
The software wallet was the first wallet and you might have one if you have the blockchain software installed on your PC. Although, some software wallets are prone to malicious attacks. However, they are mostly free to use and they provide great flexibility to online traders. Most of them are web-based, and they are accessible from anywhere.
The only needed tools are a networked device and an internet connection. However, you must be careful not to store most of your coins in a software wallet. There have been cases of software wallets being hacked and users losing their altcoins.
To begin your journey in trading cryptocurrency, you will need to select an appropriate exchange and fund it. Some of the exchanges you may consider include Bittrex, Binance, Kraken, and KuCoin. For the purpose of demonstration, this post will use Binance.
The following is the procedure to follow to trade at Binance.
All exchanges such as Binance provide a software wallet that you can use to receive or send your altcoins. Almost all of them accept Bitcoins, but some may not accept fiat money. In cases whereby an exchange doesn’t take fiat money, you need to first convert your funds to Bitcoin using another altcoin platform. You can now transfer your Bitcoins to that exchange.
One of the easiest methods to purchase altcoins and Bitcoin around the world. Different from an altcoin exchange, you will be dealing directly with other altcoin traders. There are no brokers involved in taking a commission from you. However, you get to see a list of offers, and therefore, you are likely to get the best offer price. Nevertheless, you need to verify the seller to make sure that you receive your Bitcoins or altcoin before you release your funds to their account.
Once you have your wallet and a public address of that wallet, you are ready to fund your trading account. You may use three main trading tips to make money when the altcoin prices change. These three tips will help you to profit if you can correctly predict the altcoin prices. Read on to find the most common trades.
A limit trade allows you to instruct the broker to execute the trade only if the price reaches a certain point or better. If the altcoin does not reach that price point, the broker will not perform the trade. However, a limit trade allows a trader to set a time limit on the trade. If the time expires before the trade is performed, the broker cancels the trade order.
This Market trade offers you the privilege to sell a certain amount of your altcoins at the best available price right away. While it exposes you’re to suboptimal prices, it offers you a quicker way to sell your altcoins. Traders who trade in bulk and can easily turn a profit with a slight price change.
The stop-loss trade is executed on assets that fall to a certain set price. The stop-loss trade allows traders to limit their losses when disposing of the altcoins if the prices fall below a certain price point.
Trading altcoins have become the new way of generating money in the industry because of the fast-growing popularity of cryptocurrency. Although it is in many aspects the same with forex trading, cryptocurrency trading is more complicated because of the risks associated with its high volatility.
Therefore, people interested in trading cryptocurrency coins should start by learning how to trade altcoins. It is also important that you master how to analyze market trends and follow strategies that have been proven to work.
Lastly, it is prudent to follow industry leaders and things happening in the cryptocurrency market such as partnerships that define the price movement of altcoins.