How to Trade in Cryptocurrency?

economictimes.indiatimes.com:

Trading in cryptocurrency can be broken down into four key steps-

1. Choosing your trading type
2. Understanding factors that influence crypto prices
3. Learning crucial crypto trading strategies for beginners
4. Choosing your trading platform
   

1. Deciding How to Trade Cryptocurrencies

There are various methods available for approaching cryptocurrency trading beyond traditional buying and selling on exchanges. One popular alternative is trading through Contracts for Difference (CFDs), which allow traders to speculate on the price movements of various cryptocurrencies without actually owning the underlying assets.

Trading Methods

• Traditional Exchanges: The most common method involves purchasing cryptocurrencies directly from exchanges. This requires creating an account, funding it, and buying the desired cryptocurrency. Once acquired, the assets are stored in a digital wallet until the trader decides to sell.

• CFDs: CFDs are leveraged financial instruments that enable traders to speculate on the price fluctuations of cryptocurrencies without owning them. This means you can decide whether the price will rise or fall. Trading CFDs is over-the-counter (OTC), eliminating the need to transact on a cryptocurrency exchange.

• Indices: Another option is trading cryptocurrency indices, which track the performance of a basket of cryptocurrencies. This allows for diversification and can mitigate some risks associated with trading individual cryptocurrencies.
  

2. Factors Influencing Cryptocurrency Prices

Various factors, similar to traditional financial assets, shape the prices of cryptocurrencies. Key influences include: