Crypto Trading Basics: Course 1 Review

Introduction

If you’re reading this, congratulations! You’ve made it through the gauntlet of the previous 4 lessons of this inaugural Walbi Academy Course. We are very excited to move on to the next course but first, a little refreshment is needed. 

In this blog post, we’ll go over the key points of the past four lessons:

• Lesson 1: Introduction to Cryptocurrency Trading
• Lesson 2: How to Get Started with Cryptocurrency Trading
• Lesson 3 (Part I and Part II): Proven Cryptocurrency Trading Strategies
• Lesson 4: Risk Management Tips for Cryptocurrency Trading

Lesson 1: Introduction to Cryptocurrency Trading

Let’s get to the key points: what exactly does cryptocurrency mean? Crypto trading is very similar to stock trading - where users can buy or sell cryptocurrency online. These online marketplaces are called crypto exchanges. 

These platforms allow traders to safely, conveniently, and quickly make trades from anywhere in the world. Walbi is one example, which offers multiple advanced AI and algorithmic tools to assist traders. There are DeFi (decentralized finance) and CeFi (Centralized Finance) exchanges. 

How does crypto trading work?

In simple terms, crypto traders buy and sell their crypto strategically to make returns on their investments. They make sophisticated guesses on the crypto’s future price movements, using multiple sources of data. Historical trends, industry events, and market sentiments are some examples. 

What are the benefits of crypto trading? 

Some massive advantages include: 

• Accessibility
• Affordability
• Global reach 
• The high degree of control
• High liquidity
• Hedging potential
• Innovation
• Growth potential
• Privacy
• Security
• And Innovation

What are the potential drawbacks to cryptocurrency?

These can include:

• Price volatility
• Lack of regulation
• Hard forks (changes in technology)
• Loss of access to your crypto
• Scams and Market Manipulation

CLICK HERE to review Lesson 1

Lesson 2: How to Get Started with Cryptocurrency Trading

Once you know what crypto trading is, you can take confident steps towards your first crypto trade! First, choose the cryptocurrency exchange you want to use. Make sure to research your options before you decide. Different exchanges offer different benefits, tools, and investment options. 

For example, Walbi is focused on fostering a strong community, and it offers multiple tools to benefit its users. These include advanced market analyses, AI-assisted trading, and easy fiat-on ramps. It also has lower fees and a community rewards program that ensures Walbi only profits when its users profit!

Once you’ve chosen your exchange, you can create an account and fund your wallet. Choose the cryptocurrency you want to invest in and buy a certain amount with fiat currency. You can transfer fiat money from your bank or credit card, into your digital wallet. Then, you can use it to buy crypto. 

You can choose your crypto based on its:

• Market capitalization
• Technology
• Communication and community

To place your trade, navigate to your exchange’s marketplace. Specify the order you want to execute, such as buying or selling your cryptocurrency for a certain price. Once you place it, it becomes a market order. All you have to do then is wait for another person to respond to it. 

CLICK HERE to review Lesson 2

Lesson 3 (Part I and Part II): Proven Cryptocurrency Trading Strategies

If you place your trades blindly, you’ll just end up losing money. If you know how to analyze, research, and plan your trades, you can start making real money back. There are tons of strategies you can choose from, all of them suiting different financial goals and budgets. Let’s start with the fundamentals. 

Crypto technical analysis

A method of analysis that involves using technical indicators to assess the market. This data will help you predict future price movements for your crypto. This allows you to create both short-term and long-term trading plans. 

Popular crypto trading tools

• Candlestick charts: These bar graphs provide a snapshot of the market that traders can analyze quickly. The candles are color-coded for even easier analysis. Green candles are bullish, and red candles are bearish. 

• Support and resistance levels: These levels indicate the supply and demand of a cryptocurrency. 
• Moving averages: The moving average convergence divergence (MACD) moves around a central line. You can think of this line as ‘zero’. When the MACD crosses over the line, the market is bullish. When it falls below the line, it’s bearish.

Fundamental analysis

This analysis focuses less on quantitative data and more on crypto principles and qualitative data. Cryptocurrencies are developed for certain purposes, and their technology and market movements reflect that. 

Fundamental indicators

• White papers: These long papers are filled with information. They explain the developer team’s vision, how the cryptocurrency functions, and any tech updates.
  
• Roadmaps: These outline the future objectives of the cryptocurrency.
  

• Advisors and experts: Gaining expert insights into a cryptocurrency can guide your trading decisions. 

The best crypto strategies

The best crypto trading strategies can depend on your budget, available time, and level of knowledge. A good place to start is with simpler strategies, such as:

• Day trading: Where traders make multiple trades throughout the day. Trades can last just hours or minutes. Using take-profit and stop-loss orders in conjunction with this strategy also lowers risk. 

• Swing trading: Traders make use of short-term price fluctuations, but trading positions are held up to a few days. 

• Position trading: Positions are held for weeks or months. This allows traders to wait for more significant price growth. 

• Scalping: Often pre-planned, traders can enter and exit the market within minutes. 

• Arbitrage: Due to inefficiencies between global exchanges, some crypto listings have price differences. Traders can buy on one exchange and sell for a higher price on another.
• Market making: Where you use a public (online) book to make trades, which will increase your liquidity. 

Advanced cryptocurrency trading strategies

Once you’ve mastered the basics and are ready for more, you can look into using advanced cryptocurrency trading strategies. These generally require a higher level of knowledge and experience.

• Algorithmic trading: This strategy uses technical analysis and advanced programming technology to place faster and smarter trades. 

• Copy trading: Traders can seek out other trading experts and copy their moves. This allows beginners to pull off high-level trades with lower risk.

• Social trading: Traders can congregate and plan their trades together. 

• Paper trading: Simulated trading based on real market conditions. Traders can gain exposure without using any real money (or crypto). 

CLICK HERE to review Lesson 3 (Part I)

CLICK HERE to review Lesson 3 (Part II)

Lesson 4: Risk Management Tips for Cryptocurrency Trading

No matter how much you strategically plan, there is always potential for risk. Higher risks can equal higher rewards, but it’s always smart to mitigate risk where possible. Let’s review some of the best tools to do so. 

• Stop-loss orders: These orders are set at a lower price than the buying price. When, or if, the cryptocurrency hits that price, a market sell order for that cryptocurrency will automatically execute.
  
  
• Portfolio diversification: If you’ve heard of the phrase ‘’don’t put your eggs in one basket’’, you can get a good idea of this strategy. Traders should invest smaller amounts in multiple different cryptocurrencies, instead of putting all their budget into an individual asset. 

• Dollar-cost averaging: Instead of making trades randomly, traders will invest the same amount of money at regular intervals. For example, $100 once per month. 

• Hedging: Traders strategically buy or sell to reduce risk for their other positions. One method of hedging is to buy futures contracts. These speculate on future prices, allowing traders to gain exposure to crypto without directly owning it.

• Leverage, or margin trading: This involves borrowing funds from a broker or exchange. By doing so, traders can make bigger trades or invest in more assets at once. However, traders also have to make monthly margin payments to maintain their leveraged funds. 

CLICK HERE to review Lesson 4

Walbi Academy: Course 1 Conclusion

Once again, congratulations to everyone who’s been following along with the Walbi Academy. We look forward to Course 2 where we explore more complex aspects of cryptocurrency trading and investing.

Remember, trading cryptocurrency is accessible to anyone - no matter your budget, experience, or even availability! As long as you have an Internet connection, you can become a cryptocurrency master. You’re already on the right path, and with our lessons, you’ll make expert trades. With Walbi as your friend, you can use advanced tools to create a winning strategy.