What trading crypto means and why to do it

Trading cryptocurrencies involves buying and selling digital assets like Bitcoin, Ethereum, Solana, or stablecoins with the aim of profiting from price fluctuations. Unlike long-term investing (holding), trading focuses on more active operations, whether intraday, weekly, or automated. This activity has grown exponentially, in part due to the ease of funding from local banks, high digital connectivity, and the increasing search for additional income.

The potential benefits are attractive: high liquidity, 24/7 access, the possibility of trading from any device, and exposure to a global market. However, it also involves high risks, especially if done without preparation. Many beginners lose capital due to lack of strategy or poor emotional control.

Types of trading you can apply

• Spot trading: Buy and sell cryptocurrencies at the current price.

• Leverage trading: Trade with borrowed capital (requires experience).

• Scalping: Quick trades with small accumulated profits.

• Swing trading: Trade for days or weeks, based on trend analysis.

• Bots or automated trading: Use algorithms or external signals to trade.

It is advisable to start with spot trading without leverage, trade only with capital you are willing to lose, and practice with demo accounts if your platform allows it. Practice, discipline, and knowledge are the keys to success.

Platforms, Tools, and Initial Strategies

To start trading cryptocurrencies, you need two basic things: a reliable trading platform and a bank account. Among the most used are Binance (global, with more pairs), and KuCoin, Bybit, or Kraken. Most allow funding via bank transfer and some even offer cash withdrawals through local options or wire transfers.

Once your account is funded, you can start buying cryptocurrencies like BTC, ETH, ADA, XRP, or USDT. Then you can place buy/sell orders, set limit or market prices, establish stop loss, and manage your capital with clear rules. Using technical analysis tools like TradingView is essential to evaluate trends and make informed decisions.

Basic Kit to Start

• Reliable platform with local support and complete KYC verification.

• Bank account for funding/withdrawal.

• Basic knowledge of candlesticks, support, and resistance.

• Use charts on TradingView or CoinMarketCap for technical analysis.

• Trading journal to record entries, exits, and results.

An initial strategy could be to buy when the price approaches a strong support and sell near resistances. You can use the RSI to detect oversold or overbought conditions and follow key news affecting the price. You can also diversify between stablecoins and more volatile coins to balance the risk.

Practical Example: First Trade

1. Register your account and complete the verification.
2. Fund with your chosen amount from your banking app.
3. Buy 0.0005 BTC when the price is at your entry level.
4. Place a sell order at your target price and set a stop loss at your chosen level.
5. Log the trade in your spreadsheet, monitor, and adjust according to the market.

This basic operation allows you to familiarize yourself with the market mechanics without taking unnecessary risks. As you gain confidence, you can scale operations or explore other pairs like ETH/USD, ADA/USDT, or earn yields from stablecoins.

Risks, Taxes, and Best Practices

As with any financial activity, cryptocurrency trading involves risks that you must be aware of and mitigate. The first is volatility: prices can fluctuate 5% or more in a matter of hours. This means that a bad entry or lack of discipline can quickly lead to capital loss. Another risk is emotional: fear, greed, and anxiety can affect your decisions if you don't follow a structured plan.

Regarding taxes, it's important to declare income from cryptocurrency operations. If you generate profits (sell a cryptocurrency for more than it cost you), you must include them in your annual declaration. If you trade constantly, you might also be required to file monthly declarations, especially if you invoice related services (like signals or consulting).

Frequent Mistakes and How to Avoid Them

• Entering without a strategy: Don't trade on intuition. Define clear rules before each trade.

• Trading all your capital: Always reserve a percentage as a buffer to avoid liquidations.

• Not using stop loss: This leaves you exposed to unexpected declines.

• Ignoring taxes: Declare your gains to avoid legal issues.

• Being swayed by "influencers": Don't follow signals from strangers without understanding them.

A good practice is to create a log of each trade: date, pair traded, entry price, target, outcome, and subsequent analysis. Continuous training is also key: you can access free courses, YouTube channels, newsletters, and communities.

Finally, remember that trading is not a sprint but a marathon. It's not about winning quickly but about surviving in the market and building consistency with a professional, patient, and legally sound mindset.