How long does it take to learn how to trade cryptocurrency

Monitor and close your position

When you decide to close a position, click on the ‘Positions’ tab on the left menu. Select ‘Close position’ and set the number of contracts you’d like to close. Alternatively, open the market’s deal ticket and take the opposite position to one you have open – for example, if you bought CFDs to open, you’d now sell, and vice versa.

Trading CFDs on cryptocurrencies: ether example

After completing a thorough analysis on ether price movements, you believe the market will trend upwards from its current level of 3200. Consequently, you decide to take a long position using CFDs. Because you’re going long, you open your position by electing to ‘buy’.

In this example, after a spread of 8 points is applied – and excluding other costs – the buy (or offer) price is set at 3204, while the sell (or bid) price is 3196. The CFD you use specifies an amount of $1 per point of market movement, and you opt to trade 10 contracts. This brings your total exposure for the position to $32,040 ($3204 x $1 per point x 10 contracts).

But, as positions on ether CFDs can be opened with a margin deposit of 50%, you’ll only need to deposit $15,020. At this point it’s important to note that because your exposure is larger than your required margin, you stand to lose more than the deposit if the market moves against you. So, to manage your risk, you can set a stop-loss to close your trade automatically.2 In this case, suppose you add a guaranteed stop loss at 3000.

The market moves as you predicted, up to a level of 3500, at which point you decide to close your position and take a profit. The sell (or bid) price after the spread is applied is 3496. The difference in price between 3496 and 3204 is 292 points. This, excluding other costs, brings your profit on the trade to $2920 – a return of 19.4% on your margin deposit.

Udemy

Udemy

Udemy’s Complete Cryptocurrency Investment Course covers all of the fundamentals of cryptocurrency investing in an affordable, self-paced, mobile-friendly format, making it the best overall cryptocurrency trading course on our list.

Pros

  • 30-day money-back guarantee

  • Easy-to-use course app

  • Lifetime course access

Cons

  • Accredited certificates not available

  • No quizzes or assessment tools

Originally created as a simple virtual classroom software in 2012, Udemy has since grown to become one of the largest online learning platforms offering over 185,000 courses taught by more than 64,000 instructors in 75 languages. Its Complete Cryptocurrency Investment Course introduces students to the basics of cryptocurrencies and advances them quickly into investing techniques featuring live examples. As a result, it’s our clear choice as the best course overall.  

The Complete Cryptocurrency Investment Course is led by Mohsen Hassan, a programmer, trader, and financial risk manager who has taught investing to more than 300,000 Udemy students. The course consists of over 12.5 hours of on-demand video, one article, and one downloadable resource and can be accessed on the Udemy mobile app.

The Complete Cryptocurrency Investment Course walks beginners through the fundamentals of cryptocurrency and quickly moves to live examples of buying, transferring, and using wallets as well as portfolio management techniques for both passive and active investing. Through this course, Hassan buys, transfers, secures, and builds a portfolio with real money so students can see exactly how it’s done.

The Complete Cryptocurrency Investment Course costs just $84.99 and includes full lifetime access, a certificate of completion at the end of the course, and a 30-day money-back guarantee. Udemy runs specials all the time, so you may be able to purchase the course for a much lower price.

We have all heard hundreds of stories about the life-changing money being made in the crypto space. Anonymous Twitter traders regale us with tales of turning $1,000 into millions in a matter of months, flipping altcoins and making 100x on investments daily. 

Moon. Lambo. To the outside observer, this seems like an easy and sure way to get rich quick. They leave their jobs to become “professional crypto traders,” even before learning the basics of trading and managing risk. We all know how this story ends.

Being a trader in any market is hard — 95% of all traders fail, most within a few months. They generally go completely broke or perform far worse than simply investing a lump sum in a safe investment and leaving it to grow. Contrary to popular belief, the crypto market is the most difficult to trade for beginners for a number of reasons.

The casino never closes

The market is open 24/7, giving traders the feeling that they always have to be trading. This causes tremendous fatigue and FOMO (fear of missing out) for emotional traders. Nobody can effectively track a market that is perpetually available, and new traders find it difficult to step away. This often ruins both their personal lives and destroys their finances.

What fundamentals?

The crypto market lacks fundamentals, the cornerstone of trading legacy markets. When purchasing stock, a trader can review quarterly earnings, sales reports, the company’s road map and countless other barometers of success.  More importantly, companies trading on the stock exchange are regulated and therefore transparent — you generally know what you are buying.

The strength of a team or project in crypto is nearly irrelevant for a trader’s purposes. Traders rely on technical analysis, which is hard to use properly for newcomers to the space.

I’m making money, so why is my Bitcoin balance down?

The interplay between Bitcoin (BTC) and altcoins adds a complicated wrinkle. Alts are rarely safe to trade and finding opportunities requires tremendous patience and experience — both things that newer traders inherently lack. New traders often mistakenly gauge the success of their trades in the USD value of the coin, not realizing that leaving their capital parked in Bitcoin would have been a far more profitable (and far easier!) strategy. Trading legacy markets with fiat is straightforward — you either make or lose dollars.

How do I set up a stop loss and take profit order?

Legacy traders have the benefit of placing both stops losses and take profit orders, as well as trailing stops. Trades require less babysitting and management. In crypto, exchanges lack the full breadth of orders necessary to properly manage risk, especially in a market that never closes. 

Experienced crypto traders can share countless stories about missing a huge pump while they were sleeping because they had their downside protected with a stop loss and were unable to set sell orders at their targets. Traders should never have to choose between taking profit and properly managing their risk.

I can turn $10 into $1,000 with leverage!

Leveraged trading is far too common among beginners. Leverage is a tool that should only be used by the most experienced traders, those who have proven to be profitable for years. 

The barriers to entry are non-existent in crypto, on exchanges that are built to transfer the wealth of inexperienced retail traders into the pockets of the exchanges themselves. Beginners will likely lose everything they risk trading with leverage because the downside is massively compounded.

Getting rich quick is easy, right?

In legacy markets, nobody expects to get rich quick. Crypto appeals to people looking to quickly turn a small sum of money into their retirement, which is unrealistic. Twitter is selling Lambos while beginner traders end up selling their cars on the used lot to pay rent. 

Those who got rich quick in crypto were most likely lucky, not good. Further, there is a difference between being wealthy on paper and in real life — most of the crypto traders who “got rich” failed to sell at the top and saw their paper wealth disappear as quickly as it was made.

Crypto is not a safe investment

An inexperienced person is far less likely to go broke buying a random stock than they are buying any available asset in crypto. The stakes are far higher! Crypto is not a safe investment and should only be a small part of someone’s overall portfolio.

I get all of my trade advice from a cartoon on the internet

While there are experienced and successful traders on social media, most beginners are learning from other beginners and don’t know it. Taking financial advice from strangers on the internet is the cornerstone of the crypto market. 

There is no surer path to financial ruin than spending your hard-earned dollars on assets being shilled by avatars who are likely manipulating you for their own profit. Never base your decisions on the advice of those who don’t have to deal with the results.

Traders do not average down!

A common grave mistake many traders make is Averaging Down: buying more of the coin as the price drops with the logic that a good thing is now cheaper (an even better bargain). This logic applies to investing, not to trading

A trader has an invalidation level for their idea — price dropping significantly should invalidate their trade and cause their stop loss to fire! Most beginners do not understand this and dig a deeper hole than necessary.

Risk management is everything

Risk Management is boring — and happens to be the most essential skill necessary to be profitable. Understanding how much to risk on a trade and how to properly balance a portfolio are exponentially more important than entries and exits. Learning this takes time — most new traders are broke before they understand risk.

Most people would be far better off slowly investing a small percentage of their entire portfolio in crypto — and in Bitcoin, in particular. Don’t be fooled by the avatars on twitter — trading crypto is hard

 

The views and opinions expressed here are solely those of the author (@scottmelker) and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Written by Jane