Author:
hannah
Last Updated on:
06.10.2024
Table of Content
A brief introduction to cryptocurrencies
Bitcoin was the first cryptocurrency to launch in 2009, having been put forward in the form of a white paper the previous year by Satoshi Nakamoto – a mysterious character who may or may not be a real person. Several people have claimed to be this elusive individual, but it’s not even known for certain whether he or she is just one person, or a collection of people.
But whatever the truth behind the persona, Satoshi Nakamoto’s vision came to fruition in the form of Bitcoin, with further cryptocurrencies launching the following year. New cryptocurrencies are constantly in development, whilst those in existence may be refined and relaunched as new and updated versions, in what’s come to be known as a ‘hard fork’, which has led to the creation of Bitcoin Cash and Bitcoin SV, for example.
What makes cryptocurrencies so interesting to traders is the fact that they operate completely independently from any bank or government control. They’re designed to offer completely frictionless transactions between peers, with no involvement from any financial institutions, which makes them a very different trading prospect compared to traditional fiat currencies.
At CryptoParrot, we believe the world of cryptocurrency trading should be open to everyone, whether experienced traders or complete newbies. So we’re here to guide you through every step of your crypto trading journey, helping you to make the most informed decisions and hopefully increase the value of your digital assets.
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What is crypto trading?
When you trade in a cryptocurrency, you’re effectively speculating on whether or not its value will increase over a period of time. The aim is to purchase a digital asset when the price is low, selling it when the price rises, and thereby realising a profit. With the huge volatility that tends to accompany cryptocurrencies, there are definitely some big returns to be made: get it wrong, on the other hand, and it’s possible to lose considerable sums of money too.
Traders have been speculating on traditional fiat currencies for years, but as we’ve already observed, crypto doesn’t operate in the same way. With no involvement from governments and financial institutions, cryptocurrencies present a higher level of risk thanks to their much higher volatility. Fortunes can be made and lost very quickly, so it’s well worth taking the time to understand the market before risking your own money.
The difference between crypto trading and investing
Don’t confuse cryptocurrency trading with investing – these are two different approaches to making money from digital currency. The end result is hopefully an increase in the worth of your funds, but this is achieved in very different ways.
When you invest in a cryptocurrency, you’re hoping that the value of your investment will steadily increase over time. And in the case of crypto, that’s definitely possible, thanks to some huge surges in prices. But no matter how skilled you are in investments, knowing when to buy and how long to hold on to your digital assets is key to success. There are loads of investors who’ve managed to make huge profits from their crypto investments, with plenty more hoping to join their ranks.
But investments tend to take the long view. Investors purchase crypto to hang onto, usually for the long term. This approach allows investors to ride out some of the peaks and troughs that naturally occur with digital currencies, leaving them free to sell at a later date, once their profits have reached an appropriate level – or at least, that’s the hope!
Crypto trading, on the other hand, usually tends to operate very much in the short term. Day trading is particularly popular, with an emphasis on buying crypto when it’s going through a temporary dip, holding on for a few hours, then selling the asset once the price has risen again. This enables traders to take advantage of short-term price fluctuations, helping them to increase the value of their assets.
Assessing the risks of cryptocurrency trading vs investing
Whether investing or trading in cryptocurrency, there’s always a degree of risk involved. The value of digital assets can rise and fall very dramatically even within the space of a few hours, which is one of the main reasons why so many people are drawn to them. But the path you choose to go down will be determined primarily by your attitude towards risk.
If you have a risk-averse attitude towards cryptocurrencies, then you’ll probably be drawn towards investing. You can purchase a specific amount of crypto, store it safely in a digital wallet and hold on to it for weeks, months or years. You won’t have to keep checking up on the current prices, so you can ride out any peaks and troughs in the value of your crypto, only cashing in once its value has risen to a satisfactory level.
But if you’re prepared to take on board some extra risk there are some seriously big returns to be made from crypto trading. The difference here is that you won’t be holding onto your assets for any great length of time. Your aim is to buy when the price is low, selling as soon as you’ve made a profit from the transaction. And that can happen within just a few hours – or even shorter time frames in many cases.
At CryptoParrot, we firmly believe that everyone should be able to reap the potential benefits of crypto trading. But we understand that not everyone has the necessary experience – or confidence – to dive straight in and start putting their own savings on the line. So we’ve created our simulated exchange that lets you explore crypto trading completely safely. You can expand your knowledge as you trade, gaining experience as you go and benefitting from the help from other traders in our community.
A step-by-step guide to crypto trading
Crypto trading sounds as though it might be a complex affair, but don’t worry – we’re here to help and guide you through the whole process, so you’ll be trading like a pro in next to no time! And with an active community of keen traders ready and willing to help, you’ll never be left to fend for yourself. As you gain a deeper understanding of how crypto trading works, you’ll probably find yourself in a position to help other newbies before too long!
When you’re just starting out, cryptocurrency trading can seem too difficult for a complete newbie to master, but don’t be put off. Everyone has to start somewhere, and at CryptoParrot, we’ve provided you with a safe and secure space in which to learn about trading. You won’t have to part with any financial information, so your own money is never at risk. We let you buy and trade cryptocurrencies in real time, at real prices, using our completely simulated exchange.
And because it’s a simulated exchange, CryptoParrot operates exactly like a real cash-based exchange. The only difference is that our simulated exchange only deals in pretend money. So you can ‘buy’ crypto, hold onto it, study the markets and trade it when you see fit. Your virtual balance records your progress, but no actual cash is involved, so you won’t ever come unstuck financially! Of course, this means that you can’t actually withdraw and spend any of your assets either, but once you’ve mastered crypto trading that won’t be a problem – you can sign up to a real exchange and reap the benefits of your knowledge and experience!
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How to trade cryptocurrency
Now you know that you can trade crypto safely at CryptoParrot, it’s time to get started! Use our virtual simulated exchange to conduct your trades in complete safety as you learn all about how it works. And make full use of our guides to make the most of your trading experience so that you can start trading cryptocurrency for real – and hopefully make full use of your new-found knowledge!
Sign up to your crypto exchange
There are loads of different cryptocurrency exchanges to choose from, but starting with CryptoParrot gets you off to a head start by letting you trade completely risk free. Sign up from any page across the site and fill in a few details so that other users can view your profile.
Pay funds into your account
If you’re trading with real money you’ll need to make a deposit in your preferred fiat currency to get started. But at CryptoParrot we’ll start you off with a generous virtual balance, so you can get started with your trading straight away.
Choose your preferred cryptocurrency
With so many cryptocurrencies to choose from, deciding on your preferred crypto isn’t particularly easy. Bitcoin may be the first and best-known digital currency, but Ethereum, Litecoin, Bitcoin Cash and Bitcoin SV are just some of the alternative options, with literally hundreds more to choose from too. The crypto you choose will be down to personal preference, but studying the markets – and watching what other traders are up to – can give clues to your best potential options.
Start trading
Once you’ve picked a crypto to buy into, you’re ready to start trading. Decide how much of your chosen crypto you’d like to buy, and you’ll see how much you can purchase with your allotted funds. Your chosen crypto will then appear in your account, and you’re officially ready to trade!
Now you need to keep a very close watch on the value of your asset. Here at CryptoParrot you’re trading with virtual crypto, so it won’t impact upon your actual finances, but you’ll still have all the fun and excitement – just without the associated risk!
Tips and tricks for cryptocurrency trading
CryptoParrot provides you with a safe space in which to trade cryptocurrency for fun – and for real-life rewards too – but there are a few things you need to know to make the most of your trading experience, particularly if you’re planning on heading to a real exchange later on.
Use secure wallets for storing crypto
Crypto exchanges let you buy, trade and store your cryptocurrency, but we strongly recommend using a wallet for storing your digital assets. This isn’t important when trading on CryptoParrot, as we’re only dealing in virtual crypto, but when your actual cash is tied up in digital currency, digital wallets are an absolute must-have to keep your funds safe.
Learn to read candle charts
Candle crypto charts are incredibly useful when trading cryptocurrency, as they give you loads of information about prevailing trends. Green candles represent an upswing in pricing, whereas red candles show a downturn. Use the charts to inform your buying and selling decisions and maximise your potential profits.
Keep up to date with crypto news stories
Making informed decisions means keeping abreast with the latest crypto news stories that could influence prices. Even something as innocuous as a tweet from an influencer can have an almost instant impact on prices, which is why CryptoParrot aims to publish the latest news stories as soon as we hear about them.
Never chase losses
This is a point well worth making, as so many traders try to chase their losses, leading them even further away from potential profits. Successful traders will tell you to stay true to your original plan and avoid chasing losses. Far better to save some funds for another day’s trading than risk them all on a short-term loss-chasing exercise.
Start your crypto trading journey with CryptoParrot
Dipping your toes into the crypto waters needn’t be a stressful experience. With CryptoParrot by your side, you can start exploring this fascinating world for yourself. We’ll help you set up your account so you can start buying and trading virtual crypto in real time. Join our community to get in touch with other traders and grow your portfolio completely risk-free. With loads of cool rewards on offer as you broaden your experience, we’re here to help you understand cryptocurrencies and how to potentially make a profit from them.
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