Trading crypto means buying and selling cryptocurrencies (like Bitcoin, Ethereum, etc.) to make a profit from price changes. It works similarly to stock or forex trading but involves digital assets on crypto exchanges.
There are two main types of crypto trading:
- Spot Trading:
- You buy a cryptocurrency and hold it, expecting its price to rise.
- Example: Buy Bitcoin at $30,000, sell at $35,000 — you earn the difference.
- Derivatives Trading (like Futures or Perpetuals):
- You don’t own the actual crypto; instead, you bet on whether its price will go up or down.
- You can long (bet price will rise) or short (bet price will fall).
- Often uses leverage, which means trading with borrowed money to increase potential profits (and risks).
Crypto trading can be done:
- Manually, by analyzing charts and placing trades.
- Or automatically, using bots or algorithms.