This is my guide for beginners on how to trade if you are new to cryptocurrency. After reading the basic information here, your trading skills will be significantly improved. Let’s begin with something simple, like market trends.
What are Market Trends?
It’s crucial for you to understand what the market trends are. There are two fundamental concepts: bullish and bearish trends.
Bullish Trend
What coin’s price stable increasing forming higher highs are higher low. That means the previous resistance level becomes support. The good example when Bitcoin was around $60k and moved to $65k. With a short time pullback to $64.5k it went right to $70k, it indicates a bullish trend.
Bearish Trend
A bearish trend it’s actually the same but opposite to bullish trend, when price of coin is decreasing.
To understand what trend is in the market right now, you should learn and analyze price charts. Don’t forget about chart patterns like “Head&Shoulders”, “Cup&Handle” and many others. Volume and RSI are also good hints for you to navigate a trend direction.
What are Supply and Demand Zones?
Understanding supply and demand zones can help traders identify key areas of support and resistance on the price chart.
Supply Zone
This is an area where sellers more than buyers, causing prices to potentially reverse lower.
Demand Zone
A demand zone represents an opposite market behavior, when buyers more that sellers.
Identifying these zones requires careful analysis of price movements and volume. Traders can use supply and demand zones as part of their trading strategies, such as trend continuation trades or countertrend reversal trades.
Importance of Responsible Trading Practices
Speaking of responsible trading, remember it’s not a gambling. Do not repeat my mistakes, never go all-in and never open more that 3 trades in a day.
Do not trade with high leverage x20 or higher. Over leveraging can amplify gains but also can lead you to huge losses.
Keep calm and stick to your trading plan. Never open a trade if feel bad or mad.
And of course, trading is a continuous learning process. Instead of reading books about trading crypto, I would recommend you to practice more. I mean trade with low leverages like x3-x5 is the best option for newbies.