Getting Started Guide: How to Begin Trading Crypto Assets

Core Points

• Cryptocurrency trading is the activity of making profits by buying and selling digital assets.
• Before starting, choose a legitimate trading platform, complete account registration, and understand the basic concepts of trading.
• Common strategies include day trading, swing trading, scalping, and long-term holding.
• Successful traders rely on technical analysis and fundamental analysis to make decisions.
• Risk management and asset allocation are the cornerstones of long-term profitability.

Understanding Cryptocurrency Trading from Scratch

Millions of traders and investment institutions have developed a strong interest in crypto assets, but the complex industry terminology, numerous trading strategies, and the market's high volatility often deter newcomers.

If you are planning to make your first trade or want to systematically learn about digital asset trading knowledge, then this guide will explain the most essential content for you: from account opening, key concepts, mainstream strategies to risk control, providing you with comprehensive answers and clarifications.

What is the essence of cryptocurrency trading

Core Definition of Trading Digital Assets

Cryptocurrency trading involves buying and selling digital assets on trading platforms with the aim of profiting from price differences. Unlike traditional financial markets, the cryptocurrency market operates year-round without breaks, and this 24/7 nature provides traders with greater flexibility, but also means that volatility is relatively higher.

There are thousands of cryptocurrencies in the market, among which the two most well-known are undoubtedly Bitcoin ( BTC ) and Ethereum ( ETH ) — they are the native tokens of their respective blockchain networks.

Trading Methods and Position Selection

Traders can choose to go long (buying assets expecting price to rise) or go short (selling assets expecting price to fall). Some investors choose to hold assets for the long term, while others enter and exit quickly—specific choices depend on the type of strategy adopted and risk tolerance.

Both parties can trade using fiat currencies (such as US dollars, euros, etc.) or other cryptocurrencies. The final trading process will vary depending on the type of assets you choose and the trading platform.

Preparations You Must Understand Before Starting Trading

Step 1: Master the Basics

Before entering the market with real money, it is essential to learn the basic concepts of trading. It is recommended to start with educational resources from the industry, including introductory articles on trading and various educational courses, which are usually provided by well-known platforms.

Step 2: Choose the right trading platform

It is crucial to choose a trustworthy and highly secure platform. The ideal platform should possess the following characteristics:

• Well-reputed and market-tested
• Have a comprehensive security protocol system
• Provide professional and efficient customer support

Newbies entering the market are advised to start with centralized exchanges. As you accumulate trading experience, you can gradually try the trading model of decentralized platform (DEX).

Step 3: Register an account and complete identity verification

After selecting a platform, follow the process to create an account, fill in your email, set a password, and agree to the terms of service. Most trading platforms require users to complete identity verification ( KYC process ) to meet security requirements and regulatory compliance.

The verification process usually requires uploading:

• Valid identification document
• Address proof document
• Other necessary identity materials

Start Your First Trade

Fund Recharge and Deposit

After creating an account, you need to deposit fiat currency into the account. Mainstream trading platforms generally support the following deposit methods:

• Bank Transfer
• Credit/Debit Card Payment
• Other common payment methods

Depending on the platform type and your location, some platforms also support direct purchases of crypto assets using a bank card.

If you already hold digital assets, you can directly deposit them into your platform account. Note: Be sure to send to the correct address for the corresponding currency. For example, Bitcoin must be sent to a Bitcoin address, and Ethereum must be sent to an Ethereum address. Sending to the wrong address may result in permanent loss of funds.

Select trading pair

Cryptographic assets typically appear in the form of trading pairs, such as BTC/USDT, ETH/BTC, etc. Trading pairs are used to represent the exchange relationship between two assets.

Cryptocurrency and Stablecoin Trading Pairs

Taking BTC/USDT as an example, you are actually exchanging Bitcoin for Tether(, a stablecoin pegged to the US dollar). If the current price of BTC is 92,000 euros, the BTC/EUR trading pair will display this market price, meaning that purchasing 1 BTC requires 92,000 euros, and purchasing 0.5 BTC would require 46,000 euros. It is worth mentioning that many platforms allow users to buy Bitcoin for a very small amount(, such as 5 euros).

Cryptocurrency and Fiat Currency Trading Pairs

This type of trading pair directly connects digital assets with traditional currencies, such as BTC/EUR, providing localized purchasing options.

Trading pairs between crypto assets

Direct exchanges between two types of digital assets are also common, such as ETH/BTC. At the time of writing this article, 1 Ethereum is approximately equal to 0.02285 Bitcoin.

View Order Book ( Order Book )

The order book is a real-time display of the buy and sell orders, reflecting the supply and demand conditions of an asset at different price points.

• Bid: Displays the prices at which traders want to buy the asset, arranged from high to low.
• Sell Order (Asking Price): Displays the asking prices from traders willing to sell the asset, arranged from low to high.

By observing the order book, you can assess the comparison of buying and selling power in the market.

Select the appropriate single type

Market Order

A market order is the most direct way to trade - traders buy and sell immediately at the best available price in the market. This is the fastest execution method, but you cannot control the specific execution price.

For example: If the highest bid price for Bitcoin is $100,000 and the lowest ask price is $100,100, then:

• If you initiate a buy order, it will be executed at $100,100.
• If you initiate a sell order, it will be executed at $100,000.

Limit Order

A limit order allows you to set a psychological price, and it will only execute when the market reaches or exceeds that price. This method has a slower execution speed, but it gives you complete control over the price.

For example, if the current price of Bitcoin is $100,000, but you think $98,000 is more reasonable, then you can place a limit buy order at $98,000. Your order will be executed when the price drops to $98,000 or below. If the price never reaches the target price, the order will remain open.

Develop and optimize trading plans

Every trader is unique. Instead of blindly copying others' strategies, it's better to gradually build your own trading system based on your personality and market observations, and continuously refine it through practice.

It is recommended to keep a transaction log and detail the following:

• Entry and exit points for each transaction.
• Your decision-making logic
• Final profit and loss results

This log will become a valuable material for you to improve your trading skills, helping you identify your strengths and weaknesses.

Analysis of Mainstream Trading Strategies

There are various trading strategies in the market, each with its own advantages and disadvantages. Below are some of the most common methods.

Day Trading

Day traders complete buying and selling within the same trading day, attempting to profit from price fluctuations within that day. This type of trading typically relies on technical analysis to select trading pairs.

Although day trading can be profitable, it requires traders to invest a significant amount of time and endure high psychological stress. For beginners, this strategy is relatively risky and not the first choice for entry.

swing trading

Swing trading is also a way to chase price trends, but the holding period is longer—usually ranging from several days to months. Compared to the quick in-and-out of day trading, swing trading has a more relaxed pace.

Swing trading is more suitable for beginners as it does not require constantly staring at the screen every day, resulting in relatively less stress.

ultra-short-term trading ( arbitrage )

This is the shortest time span among all strategies. Arbitrageurs attempt to seize small price fluctuations, often completing buy and sell transactions within a few minutes or even seconds.

As an extreme form of day trading, arbitrage is also not recommended for beginners. Arbitrageurs typically rely on technical analysis, tracking the bid-ask spread, and identifying market inefficiencies to profit. Due to the thin margins on individual trades, arbitrageurs must conduct large transactions or complete a significant number of trades to accumulate substantial returns.

HODL ( long-term holding )

Strictly speaking, this is not considered an active trading strategy, but long-term investors (also known as “hodlers”) are committed to benefiting from the growth of the entire cryptocurrency market. They buy and hold assets for months or even years.

The “buy and forget” investment philosophy is the least stressful method in the crypto space. It is particularly suitable for investors who are optimistic about the long-term prospects of certain assets and can withstand short-term fluctuations. While it requires patience, historically, this approach has brought substantial returns, especially to Bitcoin holders.

Decision Analysis Tool

Technical Analysis ( TA )

Technical analysis is a methodology for predicting future price trends by studying price charts, identifying patterns, and using various indicators.

Basics of K-line Chart

The candlestick chart visually represents the price changes of an asset over a certain time period. Each candlestick represents a fixed time unit — for example, if you choose a 1-hour period, each candlestick indicates the market conditions within that hour; if you choose a daily chart, each candlestick represents the market conditions for one day.

Each candlestick consists of four price points:

• Opening Price: The starting price for this period.
• Highest Price: The highest transaction price during this period
• Lowest Price: The lowest transaction price during this period
• Closing Price: The price at the end of this period

These four elements are collectively referred to as OHLC data.

Support and Resistance Levels

• Support Level: When the price drops to this level, it will encounter buyer support, and the price will rebound upward (the “floor” concept)
• Resistance Level: When the price rises to this level, it will encounter selling pressure, causing the price to fall back down (the “ceiling” concept)

Common Technical Indicators

Traders use various technical indicators to analyze price trends, and these tools help identify trading opportunities and entry and exit timing. Common indicators include:

• Trend line
• Moving Average
• Bollinger Bands
• Ichimoku Kinko Hyo
• Fibonacci Retracement Levels

These indicators often indicate potential support and resistance levels.

Fundamental Analysis ( FA )

Fundamental analysis guides investment decisions by assessing the intrinsic value of an asset or company. In the crypto space, this often involves studying the project's technical architecture, development team, practical application value, and overall feasibility.

Main Dimensions of Crypto Fundamental Analysis:

• The core technology and innovation points of the project
• Background and capabilities of the development team
• Token Economic Model Design
• Degree of market adoption and ecological development
• Blockchain Data Analysis (Active Addresses, Transaction Volume, etc.)
• Project roadmap and latest updates
• Community engagement and developer activity

Core Methods of Risk Management

Risk management means identifying financial risks associated with investments and taking measures to minimize them. Here are several practical strategies.

Set Stop Loss and Take Profit

First Golden Rule: Never invest money you can't afford to lose. Use advanced order types to protect profits or limit losses.

• Stop Loss Order: Automatically stops losses during a downturn, controlling the maximum loss amount.
• Take Profit Order: Automatically closes the position when the profit target is reached, locking in gains.

Establish a clear exit plan

It is important to prepare for the worst. A clear exit strategy is an important part of risk management.

In the excitement of a bull market, it's easy to forget about risk, but having a pre-established exit plan can help you take profits and cut losses in a timely manner. You can set a target selling price through limit orders or set an acceptable maximum loss threshold.

The key is: make a plan and strictly follow it. “Plan your trades and trade according to the plan.”

Asset Allocation and Portfolio Diversification

Asset allocation is the most fundamental tool for reducing risk. Traders can hold a variety of different assets, maintain a reasonable size for each position, and regularly rebalance their portfolios to prevent excessive concentration in any one asset. This can significantly reduce the devastating impact of a sharp decline in a single asset.

hedged position

Although this requires some experience, you can hedge existing positions by establishing a reverse position on correlated assets — that is, opening a position in a related asset that is expected to move in the opposite direction to the main position, thereby offsetting potential losses.

Example: Suppose you hold Bitcoin worth $10,000 and are worried about a price drop. You can buy a put option that gives you the right to sell BTC at $100,000 in the next few weeks.

• If BTC drops to $80,000, you can exercise the option and sell at $100,000, significantly reducing your losses.
• If the price of BTC rises, you only lose the premium of the option, but can still benefit from the rise of the long position.

Summary

The crypto market is full of uncertainty, and its volatility far exceeds that of traditional assets. However, by continuously learning and improving your trading skills, you can become a better trader.

The core advice is: always prioritize risk management. Stay updated with industry news, continuously improve trading skills, and adjust strategies according to market changes—these are all necessary conditions for success.

Disclaimer: This article is for educational purposes only and does not constitute financial, legal, or any specific product investment advice. Investing in cryptocurrency assets carries a high level of risk, with market prices being highly volatile. You should consult with a professional based on your personal circumstances. You bear the consequences of any investment decisions. The value of digital assets can fluctuate significantly, and the capital invested may be partially or completely lost.