Over the past few years, you’ve likely heard your friends or colleagues talking about cryptocurrency and how they’ve made money by trading it. If this sounds exciting to you, then you’ll no doubt want to learn about how trading cryptocurrency works. After all, what’s the deal with it?
The information below is going to turn you into an expert within a matter of minutes! Let’s begin.
First, what is cryptocurrency?
In simple terms, cryptocurrency is electronic currency that exists over the internet. This doesn’t mean it’s “pretend”—it’s very real. However, you cannot print or hold cryptocurrency in your hands, as it can only be bought and traded online.
Popular examples of crypto (short for cryptocurrency) include:
- Bitcoin
- Ethereum
- Dogecoin (which Elon Musk likes)
As a beginner, it’s useful to know the Bitcoin current price index at OKX. This will help you to understand the value of Bitcoin and its current market activity. You can see its price, market cap, trading volume (how much Bitcoin is in circulation), and much more.
Remember to also check the price indexes of other cryptocurrencies, too. The more you learn about different cryptos, the greater your knowledge becomes; which then enables you to make smarter investments.
How do you trade cryptocurrency?
Now, let’s address the big question: how do you trade cryptocurrency?
Firstly, crypto trading is the process of buying or selling crypto coins with the end goal of making a profit from value increases. For example, you might buy a particular cryptocurrency at a low market price and then sell it when the market price increases in the future. It’s the exact same concept as buying a house and then selling it for a profit.
Whether you are part of a business or someone who simply wants to trade crypto for a hobby, it’s all pretty simple:
- Firstly, join a crypto exchange and create an account.
- Deposit some money and then exchange that money for crypto. The crypto will then be added to your account.
- Then, when the time is right, you will want to sell your crypto for a profit. You can sell it online, in-person, or directly through your crypto exchange or broker. Everyone is different when it comes to their personal preference. As a beginner, though, it’s recommended that you trade through your exchange or broker, as this will help to keep the process simple for you.
Make sense? Great. Now, let’s discuss when you should sell crypto.
When should I sell crypto?
Unfortunately, there’s no perfect answer to this question.
Just because a crypto price suddenly drops, it doesn’t mean you always have to panic-sell. Instead, you can be brave and ride out the wave until the price (hopefully) increases again.
Ideally, you will want to sell when a crypto’s price skyrockets to a point where the profit you would make is too good to turn down (e.g., a 60% value increase). In circumstances like this, you should always consider selling—especially in today’s volatile markets.