Cryptocurrencies are extremely volatile, so it's better to start trading them from a training account. It allows you to get acquainted with the exchange and its instruments, get practice on a virtual balance sheet. Then it is better to make a small amount and, no matter how strange it may sound, survive the first losses. This will help you understand whether you are able to remain calm and make informed decisions in a stressful situation.
It is worth reading specialized literature on trading, listening to lectures, taking courses. This will help you better understand the market situation and learn various trading strategies. In more detail, how to start trading cryptocurrency, we have analyzed in the previous material from the cycle "Instructions for a beginner".
There is also algorithmic trading. Most transactions on world exchanges are made using high-frequency trading tools —high-frequency trading) - a trading method in which special programs automatically search for earning opportunities, sell and buy positions in a fraction of a second. Due to strong fluctuations in the rates of cryptocurrencies, bots in this area are becoming more popular.
Algorithmic trading systems are used by both professionals and amateurs. The programs vary in degree of complexity and principles of the device. There are three main categories of software for working with crypto exchanges:
Simple bots with pre-prescribed logic;
Trainable trading robots based on AI and machine learning technologies;
Expert Advisor robots (do not make deals, but give recommendations).
This option is hardly suitable for beginners. The efficiency of the system is difficult to predict and impossible to guarantee. It is not necessary to completely give stock exchange operations to the software, but you can try in the case of robot advisors and independently evaluate their effectiveness.
Earning on referral programs of crypto exchanges
A referral program is a type of cooperation in which a firm pays its client (referral) to attract new users (referrals). As a rule, both the one who brought and the one who was brought receive bonuses. Each organization chooses the method and amount of remuneration independently.
Among the crypto exchanges with permanent partners: Binance, BitMEX, EXMO, OKEx, Huobi and Bitfinex. The amount of remuneration depends on the total volume of all referrals attracted. It happens that companies launch "one-time" referral programs, for example, as part of an IEO or in honor of a major update.
In March, Bittrex Global announced major changes to the mobile platform: the platform began to support credit cards for the purchase of digital assets and pending orders on smartphones. At the same time, the company introduced a new referral program that allowed customers to receive an additional commission percentage from the transaction of customers who came by a special link.
An alternative to trading is "hodl" or investing. This approach implies making long-term transactions. It is more suitable for non-professionals, as it does not require knowledge of technical analysis, trading abilities and other skills.
Investing has less potential than trading. The price of cryptocurrencies can change by tens of percent every day, and the investor, accordingly, misses the opportunity to make money on these fluctuations. "Hodla" has another significant nuance. It is extremely important to find the right moment to purchase an asset, it is better to wait for a strong decline in its rate. For example, users who invested in bitcoin in 2017-2018 at a cost above $14,000 have not yet had the opportunity to close the transaction with a profit.