Do you want to learn how to trade with cryptocurrencies?
Who does not?
Everyone wants to learn to trade and win.
Now the trading that is becoming fashionable is the one with cryptocurrencies, mostly because they are the most popular asset of the “present” as it seems that they will take control of the future of the monetary system, in a way other.
Surely you have found many articles, videos and content telling you the wonders of trading with cryptocurrencies since it is assumed that there are many people making money with them and, of course, we are not going to be the only fools who do not take advantage of it.
With all this we have the perfect recipe for “experts” to appear around the corners showing you the perfect indicators and techniques to earn money with cryptocurrencies.
Also, in addition to this we have the typical courses of trading with cryptocurrencies.
As if there is something called like that, then in an almost magical way allows you to earn money with cryptocurrencies.
The sad reality is that the vast majority of those who say they are going to teach you all the tricks to win with a cryptocurrency trading course are telling you a Chinese story, period.
This is because, in fact, cryptocurrency trading is not different from trading in other markets, such as commodities, stocks or Forex.
What Cryptocurrency trading does have is that these assets have been in the market for a few years and they seem to have a long-term uptrend. In fact, a very strong trend, key in which they have reached such popularity.
Therefore, if you want to learn how to trade with cryptocurrencies you should first learn to trade in general.
What happens is that if you learn to trade in general, you probably end up trading in other assets that are much more efficient for the same, with what you wonder why so much paraphernalia with “learning to trade with cryptocurrencies.”
After all, this issue of trading courses for cryptocurrencies is not different from the Forex trading and all the fashions that are coming out, such as futures trading years ago and the stock market even more years ago.
I already talked a bit about this when I wrote the trading article with cryptocurrency or Forex trading.
In the end, trading is trading, and the important thing is to know is how to operate.
What is trading with cryptocurrencies?
Well, it is assumed that by applying the technical analysis strategies that we know, we will be able to earn money both when these assets go up and when they go down.
We just have to find the right source and soon we will be buying and selling Bitcoin and Ethereum and making a pasture along the way, whether they rise or fall.
All this is very simple.
It is based on the old laws of supply and demand.
If there is a product offer and there is demand then a price is determined.
The case of cryptocurrencies is the same as a raw material or Facebook.
There are buyers and sellers and depending on the strength of both sides of the market the price will go from one place to another.
What is the biggest advantage of trading with cryptocurrencies?
Well, honestly, for me the main advantage of trading with cryptocurrencies is the fact that I can negotiate 24 hours a day, 7 days a week.
This is a step forward with respect to Forex, which in its day promised that it was better than futures or shares because it allowed trading 24 hours a day for 5 days a week.
For the trader, it is supposed to be an advantage because it allows us to operate without having to close the operations when we go to sleep, since in this way we lose many opportunities.
What’s more, negotiating every day is something that is supposed to be good because we are supposed to have more sessions and hours of trading so we can do more good trades, so in the end we will always make more money in the long term.
Well, that thing of continuous trading is pretty good, I have to admit.
I wish it was applied to the shares, which are my favorite assets, but it’s not like that.
What do we need for trading with cryptocurrencies?
What we need is a broker like in any financial asset.
What happens is that the cryptocurrency brokers are the so-called exchange houses.
If we enter the same we can find that they have good trading conditions as they teach us their main assets with depth of market in their own websites publicly, something that we do not find in other markets such as Forex or futures.
That is a positive thing, without a doubt.
It seems that they are transparent.
However, at the moment of truth you realize that the market depth is not as good as it seems at first sight, and there are really large spreads, so our possible trading strategies are very limited.
This means that we have to use another type of approach to trade with these assets, especially when we take into account that many of these exchange houses charge 0.20% for each side of the operation, which is 0.40% that we pay every time we charge or sell.
Do you know what a 0.40% is?
If we add to that the spread, which may well go to 0.2%, we already have that every time we buy and sell we are paying a huge amount of money.
I assure you that you will have to spin very thin to win in the long term as well.
However, not everything is bad and while operating is expensive, the movements that cryptocurrencies give us are so broad that we can expect to have some chance of winning through medium-term strategies; that, for example, look for movements of 20, 30 or 40%.
Variety in trading with cryptocurrencies
Another thing that I like about trading with these assets is the great variety of them.
Today we can find many cryptocurrencies in which we can negotiate and, therefore, we can diversify our trading account, something very important in order to have a good hope for the future. Whenever I did not diversify, I ended up paying dearly, one way or another.
We can choose between 10 or 15 cryptocurrencies with more volume and perhaps open some account in one of these cryptocurrency houses, such as Kraken, Poloniex, Binance, Okex, Bitfinex, and so on.
Then, with a good diversified “crypt portfolio” and a good trading strategy, we can now try to find good operations.
What do I not like about trading with cryptocurrencies?
Because in the light of the issue there are a lot of “hacks” and “robberies” in all houses, including many of those named; and that is supposed to be the safest instruments, or at least that is how they “sell” us.
This, as I mentioned on another occasion, is something that I do not like at all and that does not give me confidence. I have to admit that it is something that pulls me back in this market.
If I have an account in Ninja Trader of 10,000 dolars to trade futures I am not very afraid, but if I have an account of that money in one of those brokers, I would be a little worried.
To this we must add the fact of regulation since these houses are not regulated.
There is also the fact that in many of these brokers, as happened to me in Kraken, we have difficulty placing stop and limit orders as in other traditional brokers.
The other option we have, and perhaps the best one, is to invest long in these cryptocurrencies, because in the end you can be assured that by trading you will not be able to make more money than by investing in them, as long as they keep going up.
A separate case is if they reach maturity and begin to rise and fall in a more balanced manner, in which case the investments would no longer seem as “clear” as they are today, but that does not guarantee that we will be able to win easily with trading, because the assets have a clear trend is the fundamental prerequisite to be able to make a more successful trading.
That is, in other words, if the cryptocurrencies stop rising, their quality as assets for the traidng decreases a lot. In that sense they would become more like “Forex”, which is undoubtedly a much more complicated market for trading than stocks, for example.
In short, yes you can do trading with cryptocurrencies, but taking into account the current market conditions and those of the brokers of the same (exchange houses and CFD brokers) I am still with the classic stock trading, and be it in CFDs, futures or Forex.
Final advice on trading with cryptocurrencies
One very important thing that I forgot to mention.
Did you see the start chart?
Well, what “tells us” this graph is that the smartest thing is to trade on the long side of the market, that is, go bullish.
Now, I am also of the opinion that eventually this market – bubble – will eventually explode and then the vast majority of the crypts will go to zero. But of course, if you are short at that time I do not think there are many brokers that will pay you the bet, mostly because many will be bankrupt.
Do you think it is worth doing cryptocurrency trading and that it is better than doing it in other assets?
Greetings and good trading.