For cryptocurrency newbies, the process of coin speculation can be both exciting and confusing. In this article, we will explain how to learn how to speculate on cryptocurrencies from scratch and provide you with practical steps to get started and things to keep in mind. Whether it's choosing a trading platform, understanding the basics of cryptocurrency, or how to do risk control, we'll help you get a foothold in the cryptocurrency market, avoid common pitfalls, and increase your chances of trading success.
1. understand the basic concepts of cryptocurrency
Before starting to speculate on coins, it is important to have a basic understanding of cryptocurrencies. Cryptocurrency is a digital asset that runs on blockchain technology and is not controlled by any government or financial institution. Bitcoin is one of the most well-known cryptocurrencies, but there are thousands of different cryptocurrencies on the market, such as Ethereum, Ripple (XRP), and others. Beginners should understand the technology behind each currency's purpose and value so that they are more aware of the risks they are taking when speculating in cryptocurrencies.
2. selecting the appropriate exchange
Choosing a safe and reliable exchange is the first step in coin speculation. For users in Taiwan, exchanges such as Binance and OKX are good choices. These exchanges not only support Taiwan Dollar (TWD) top-ups, but also have comprehensive security measures. Newbies should focus on the following when choosing an exchange: the security of the exchange (e.g., secondary verification), the transparency of the transaction fees, whether or not it supports the newbie mode, and the platform's user reputation. The liquidity of the platform is also very important. Exchanges with high liquidity can make trading operations easier and reduce the risk of slippage.
3. Open and validate accounts
After selecting an exchange, you will need to register an account. Most platforms will require you to undergo identity verification to comply with anti-money laundering (AML) and Know Your Customer (KYC) regulations. The verification process usually requires personal identification documents such as an ID or passport, and some platforms may ask for facial recognition. Once these steps have been completed, you can start depositing and trading.
4. Learning basic trading operations
There are many different types of trading that you will encounter on cryptocurrency exchanges, the most common of which include spot trading and futures trading. For newcomers, it is recommended to start with spot trading as it is a less risky way of trading. Spot trading is when you buy or sell cryptocurrencies directly, and when you buy Bitcoins, you own them. Futures trading, on the other hand, involves predicting future prices and trading them, which requires a higher level of skill and experience. Learning how to set stop-loss and take-profit is an essential skill for every trader to avoid excessive losses.
5. Understanding market analysis methods
In the process of currency speculation, mastering the skills of market analysis is crucial to success. There are two main types of market analysis: fundamental analysis and technical analysis. Fundamental analysis focuses on the technology, teams, white papers and market demand behind cryptocurrencies, while technical analysis uses charts and indicators to predict price movements. For beginners, learning common technical indicators (such as Relative Strength Index RSI, Moving Average MA) can help make more accurate trading decisions.
Practical indicators for technical analysis:
- MACD Indicator: It is used to determine market trends and turning points.
- RSI Indicator: It is used to determine if the market is overheated. When the RSI is above 70, the market may be overheated; when it is below 30, the market may be oversold.
- Bollinger Bands: Used to measure price volatility and predict the likely direction of prices.
6. Control risk by setting stop-loss and take-profit.
Risk control is very important in the process of speculating in cryptocurrency. The cryptocurrency market is highly volatile and prices may fluctuate significantly at any time. Therefore, it is necessary to set stop-loss and stop-gain. Stop-loss means automatically selling when the price falls to a certain level to avoid bigger loss; stop-gain means automatically selling when the price reaches the expected target to realize profit. Beginners should develop the habit of checking their portfolios regularly and adjusting their stop-loss and take-profit settings in accordance with market changes.
7. choose an appropriate investment strategy
Coin speculation is not a quick fix. Successful investors often choose different strategies based on their risk tolerance and market conditions. For newbies, the following strategies can be considered:
- Held for the Long Term (HODL): Suitable for those who are optimistic about the long-term appreciation potential of a particular cryptocurrency and are not in a hurry to sell.
- Day Trading: Trade multiple times during the day to capitalize on short-term price fluctuations. This requires a high level of market analysis and trading experience.
- Periodic quota (DCA): Investing a fixed amount of money in cryptocurrency purchases on a regular basis, regardless of market price fluctuations. This strategy is suitable for investors with a low risk appetite.
8. Attention to safety precautions
The cryptocurrency market is fraught with a variety of risks, including hacking attacks, fraudulent schemes and phishing websites. Therefore, securing your account is a top priority for every cryptocurrency speculator. In addition to turning on 2FA, there is the option of using a hardware wallet to store your long term cryptocurrency holdings to avoid hacking while your funds are stored on an exchange. Be wary of any investment opportunities that claim to offer "get rich quick" opportunities to avoid being scammed.
9. Learning and Adjustment
The cryptocurrency market is changing rapidly, and as a newbie cryptocurrency speculator, continuous learning and adjusting your strategy is the key to improving your trading success rate. You can improve your knowledge by participating in forums, reading cryptocurrency news, and watching trading tutorials. Many successful investors regularly review their trading records and analyze their past trading successes and failures to learn from their experiences and adjust their strategies.
10. understanding tax and compliance issues
In Taiwan, profits from holding and trading cryptocurrencies may still be subject to tax even though the current tax regulations on cryptocurrencies are still evolving. Newcomers to cryptocurrency speculation should be aware of the relevant tax regulations and file truthful tax returns as required. This will avoid unnecessary trouble in the future due to tax evasion.
Conclusion:
The cryptocurrency market is full of opportunities, but also comes with high risks. As a beginner, understanding the basic concepts, choosing the right trading platform and developing a sound investment strategy are the keys to success. As you gain experience, you will gradually acquire more skills and become more comfortable in the market. Remember, continuous learning and rational investment are important steps towards success.
English 
Chinese