Currency Speculation: A Complete Guide for Beginners｜Updated Guide for 2023
Before entering the cryptocurrency market, many people are faced with the question: how to start speculating in cryptocurrency? It's not just about choosing an exchange or buying Bitcoin or Ether. With the rapid growth of cryptocurrencies, the market is filled with countless investment opportunities and risks. This guide will provide you with the most up-to-date knowledge on how to get started with cryptocurrency speculation in 2023. It will help you get started quickly, understand the basics, and choose the right strategy to avoid common investment pitfalls, so that you can get a solid start in this emerging market.
Cryptocurrency Basics: What is Cryptocurrency Speculation?
Cryptocurrency speculation is simply the act of buying and selling cryptocurrencies to earn the price difference. You can buy when the price is low and sell when the price is high to earn the difference in price. For newcomers to cryptocurrency trading, the most common way to speculate on cryptocurrencies is to trade on exchanges. This is relatively low risk, but it also means that the returns are not as high as those from futures or leveraged trading. Therefore, learning how to choose the right cryptocurrency and trading strategy is a priority for every new investor.
Choosing the right cryptocurrency exchange
In Taiwan, if you want to engage in coin speculation, you first need to choose a reliable cryptocurrency exchange. Currently, there are many well-known exchanges in the market, such as Binance, Coinbase, OKX, etc. Each platform has its own features and advantages. Each platform has its own features and advantages. When choosing an exchange, you should pay special attention to the exchange's security, fees, types of transactions, and whether it has a payment method that meets the needs of Taiwanese users. OKX, for example, not only offers low fees, but also has a wide range of cryptocurrency trading pairs, making it suitable for beginners to trade with cash and leverage.
How to open a cryptocurrency trading account
Opening an exchange account is the first step in conducting currency speculation. You will need to provide basic identity verification information, such as your ID card, proof of address, and so on. Most exchanges support two-step authentication (2FA), which is an important means of account security. In addition to registration and identity verification, you need to choose a suitable deposit method. For Taiwan users, it is usually supported to top up in Taiwan Dollars or stable currencies such as USDT. Once your account is set up, you can transfer funds to the platform and start trading cryptocurrencies.
The basic operation process of currency speculation
The basic operation process of cryptocurrency speculation is actually not complicated and is mainly divided into two steps: buying and selling. When you decide to buy a certain cryptocurrency, you can choose between spot trading or different types of orders such as market orders or limit orders. Spot trading is the most direct way, while Limit Orders help you set the price at which you want to buy and sell to avoid unnecessary losses caused by market fluctuations. Once you have bought, you simply wait for the price to rise to your desired target before selling.
How to choose which cryptocurrency to speculate on
Choosing the right cryptocurrency is the key to successful coin trading. There are thousands of cryptocurrencies in the market, but not all of them are suitable for short-term investment. For beginners, it is advisable to start with mainstream currencies with large market capitalization and high trading volume, such as Bitcoin (BTC) and Ethereum (ETH), which have relatively stable volatility and high market liquidity. With the accumulation of experience, you can gradually explore more emerging currencies, but remember to be extra careful when choosing and avoid blindly following the trend.
Risk Management: How to Control the Risks of Currency Speculation
The cryptocurrency market is highly volatile, so risk management is of paramount importance. Newcomers to cryptocurrency speculation should set up take-profit and stop-loss points to avoid excessive losses due to severe market fluctuations. Diversification is also an effective way to reduce risk by avoiding concentrating all your capital in a single currency. For capital management, you can set a maximum loss range for each trade, which prevents emotional fluctuations from affecting your decision making.
Cryptocurrency Rebate Program: How to Earn Extra Profits
Many exchanges offer rebate programs in order to attract users. This means that when you refer others to trade on the platform, you get a percentage of the commission back. In the case of Euronext, for example, it offers a variety of rebate programs, and the percentage of rebate varies depending on the volume of trades made by the user. For users with a certain amount of capital, this is a great opportunity to earn extra money. For newbies, taking advantage of these rebate programs not only reduces trading fees, but also helps in capital accumulation.
Frequently Asked Questions Q&A
Q1: What are the common mistakes that beginners need to avoid when flipping coins?
A1: Beginners are prone to make mistakes such as overly aggressive investment strategies, neglecting risk management, and blindly following popular currencies. Beginners are advised to start with small investments, learn to control risks and avoid investing too much money at once.
Q2: How to choose the right cryptocurrency trading pair?
A2: You can choose a pair based on market capitalization, liquidity and personal needs. Generally speaking, choosing mainstream pairs (e.g. BTC/USDT, ETH/USDT) is more stable and suitable for newbies.
Q3: Is leveraged trading of cryptocurrencies suitable for beginners?
A3: Leveraged trading carries a high level of risk and is recommended for novice traders to familiarize themselves with the market and its operations. Leveraged trading may magnify gains or exacerbate losses, so caution is required.
This article organizes the basics of cryptocurrency speculation and the operation process for you. Whether you are new to cryptocurrency speculation or have some experience, I believe you can find valuable information in it. The cryptocurrency market is full of opportunities as well as challenges. Learning risk management and choosing the right strategy will enable you to move forward in this market.
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