2025Beginner's Must Read | How to Start Cryptocurrency Trading? Comprehensive Beginner's Guide

In recent years, cryptocurrency trading has become a hot topic of concern for global investors, attracting a large amount of capital inflows from mainstream currencies such as Bitcoin and Ethereum, as well as emerging projects. However, before entering the market, do you know how to choose the trading channel that suits you?

From a centralized exchange（CEX）Go to a decentralized exchange（DEX）Contracts for Difference (CFD)（CFD）Traders, then toP2PTrading platforms offer different trading methods with their own advantages and risks, suitable for different types of investors. To make a profit in the cryptocurrency market, the key is not only to choose the appropriate trading tools, but also to master risk management strategies and market dynamics.

This article will delve into the main cryptocurrency trading channels in the current market and analyze how to make the best choices based on personal investment needs, so that you can stand undefeated in this market full of opportunities and challenges.

What are the channels for cryptocurrency trading?

Choosing the right investment channel is crucial before engaging in cryptocurrency trading. The current investment channels in the market mainly include centralized exchanges（CEX）Decentralized exchanges（DEX）Contracts for Difference (CFD)（CFD）Traders andP2PTrading platform. Different investment channels are suitable for different types of traders, each with their own advantages and disadvantages.

1. Main investment pipeline

（1）Cryptocurrency exchange（CEX）

Centralized Exchange（CEX）It is the most common cryptocurrency trading channel in the market, such as Binance（Binance）、CoinbaseWait. This type of exchange provides various services such as spot trading, leveraged trading, and contract trading, which are suitable for most investors.

Advantages:

Provide high liquidity and transparent market prices

Fast trading speed, suitable for frequent traders

Provide various trading tools, such as leveragefuturesSpot goods, etc

Disadvantages:

Funds need to be deposited into the exchange, which poses a security risk

Under significant regulatory influence, may face policy changes

（2）Contract for Difference（CFD）Traders

Contract for difference（CFD）Traders, such asUltimaMarketsAllow investors to participate in cryptocurrency trading through leveraged trading without actually holding cryptocurrency assets. Investors can go long (buy) or short (sell) to profit from market price fluctuations.

Advantages:

Leverage can be used to amplify trading funds and improve capital efficiency

Support short selling trading, still able to make profits when the market falls

No need to hold cryptocurrency, reducing asset storage risk

Disadvantages:

Leveraged trading carries high risks and may lead to increased financial losses

Traders need to pay costs such as spreads or overnight fees

（3）Decentralized Exchange（DEX）

Decentralized Exchange（DEX）LikeUniswap、PancakeSwapBy executing transactions through smart contracts, traders can directly exchange assets on the blockchain without the need for central management.

Advantages:

No registration required, high transaction anonymity

Traders have complete control over their assets

Not subject to central regulatory oversight, reducing policy risks

Disadvantages:

Liquidity may be low, and trading prices may deviate significantly from market conditions

Transaction speed is affected by the blockchain network, resulting in costs（GasHigh cost

（4）P2Ptrading platform

P2PTrading platforms, such asLocalBitcoins、BinanceP2PAllowing investors to directly trade with other individuals, supporting multiple payment methods, suitable for investors who wish to purchase cryptocurrency with fiat currency.

Advantages:

Multiple payment methods are available (bank transfer, electronic payment, etc.)

No need for intermediaries, high degree of trading freedom

Disadvantages:

There is a risk of transaction fraud, and it is necessary to choose a reputable counterparty

Low liquidity, trading may take a longer time

How to Start Cryptocurrency Trading: Steps and Tips

With the development of the cryptocurrency market, more and more investors hope to participate in cryptocurrency trading, but for beginners, how to get started and trade securely is the primary consideration. This section will introduce the basic steps and techniques of cryptocurrency trading to help investors smoothly enter this market.

1. Set trading objectives and risk tolerance

Before starting trading, investors should first clarify their trading objectives, such as:

Do you want short-term arbitrage or long-term holding of cryptocurrencies?

How much profit do you expect to receive? What is the maximum tolerable risk?

The market is highly volatile, and cryptocurrency trading may bring high returns, but it also comes with significant risks. Therefore, investors should develop reasonable trading strategies based on their financial situation and risk tolerance to avoid blindly entering the market.

2. Choose the appropriate trading platform

Choosing a suitable trading platform is an important step in cryptocurrency trading. When choosing a platform, the following factors should be considered:

●     Security: Ensure that the trading platform has high security, such as two factor authentication, cold wallet storage mechanism, etc., to reduce hacker risks.

●     Transaction costs: Different platforms may charge different transaction fees, including spreads, fees, and overnight interest. Investors should choose the most cost-effective platform based on their trading needs.

●     Trading tools: Choose platforms that provide leverage, derivative trading, or other functions based on one's own investment strategy to enhance trading flexibility.

●     Regulatory compliance: Select regulated traders (such asUltima Markets）It can provide a more transparent trading environment and protect the rights and interests of investors.

If you do not have cryptocurrency assets, or if your current funds are insufficient to participate in investment trading in the cryptocurrency market, then contracts for difference（CFD）Trading may be more suitable for you. Contract for Difference(CFD), is a flexible leveraged financial derivative tool that allows investors to participate in the rise and fall of asset prices and make profits without actually owning the asset.

Ultima Markets（UM）As a professional contract for price differences（CFD）Trader, subject to the Cyprus Securities and Exchange CommissionCySECAustralian Securities and Investment CommissionASICUnder the supervision of globally renowned institutions, providing investors with an efficient cryptocurrency trading experience, allowing for leverage operations, two-way trading, and a trading environment with low spreads and high liquidity, it is an ideal choice for many investors to engage in derivative trading.

UM The trading platform can first open a demo account for cryptocurrency trading, review the order process, learn how to set stop loss points, view the market, and read charts. After you become proficient, you can then switch to a real trading account. This not only avoids misoperation, but also gives you more confidence to make real investments.

Simulated trading is an ideal way for beginners to learn about investing in US stocks, which can help you:

• Familiar with platform operations and market trends.
• Test trading strategies without taking actual risks.
• Build confidence in a secure environment and prepare for entering the real market.
  

Investors should choose a suitable platform based on their trading needs and risk tolerance. For example, if you want to gain greater profits through leveraged trading,CFDTraders such asUltimaMarketsPerhaps it is a more flexible choice.

3. Registering an account and managing funds

After successfully selecting the trading platform, investors need to complete account registration and identity verification（KYC）To ensure transaction security.

📌 Suggestions for fund management:

●     Control investment funds: Avoid investing all assets in a single transaction, it is recommended to use**capital1-5%**As a single transaction limit.

●     Use stop loss mechanism: Set a stop loss price to prevent market fluctuations from causing excessive losses.

●     Avoid excessive leverage: Although leveraged trading can amplify returns, it also increases risk. It is recommended that beginners choose low leverage (such as...)2-5Start (double).

4. Choose trading strategy and technical analysis

It is crucial to develop suitable trading strategies when conducting cryptocurrency trading, and common trading strategies include:

Trading strategy	Applicable subjects	characteristics
Long term holding（HODL）	Suitable for long-term investors	Holding mainstream currencies such as Bitcoin and Ethereum for long-term value growth
Intraday trading（Day Trading）	Suitable for short-term traders	Make multiple trades within a day and profit from short-term price fluctuations
Grid trading	Suitable for volatile market conditions	Automatically buying and selling within a specific price range, suitable for market sideways consolidation
Leveraged trading（CFD）	Suitable for high-risk individuals	By using leverage to increase trading limits, one can go long or short (such asUltima  Markets）

In addition, technical analysis is also an important tool for trading decisions, which investors can learn to useKLine chart, support and resistance levels, moving average（MA）Relative strength index（RSI）Use technical indicators to assess market trends.

5. Transaction Execution and Risk Control

When conducting formal trading, investors should pay attention to the following key elements:

Choose a suitable trading pair: Choose Bitcoin（BTC）Ethereum（ETH）Waiting for mainstream currencies, or searching for high potential altcoins（Altcoins）。

●     Set take profit and stop loss:Ensure that each transaction has a clear exit plan and avoid emotional manipulation.

●     Monitor market trends:Pay attention to market news, policy changes, and technical indicators, and flexibly adjust trading strategies.

Risk control techniques:

●     Batch warehouse construction:Avoid investing a large amount of funds at once and reduce the impact of market risks.

●     Reasonable leverage ratio:For beginners, it is recommended to start with low leverage（2-3Start by doubling to reduce potential losses.

●     Avoid chasing high prices or panic selling:When the market is volatile, remain calm and do not let short-term fluctuations affect your judgment.

6. Withdrawal and Asset Security Management

After successfully profiting, investors need to consider asset safety and withdrawal methods:

●     Choose a secure wallet:Deposit cryptocurrency into a cold wallet (such asLedger、Trezor）To avoid exchange risks.

●     Regular withdrawal income:Do not keep all funds in the exchange for a long time, and regularly withdraw them to personal bank accounts or cryptocurrency wallets.

●     Enable security mechanism:Enable dual authentication（2FA）Ensure account security.

Risk Management and Practical Experience Sharing: How to Reduce Cryptocurrency Trading Risks

In the cryptocurrency trading market, investment opportunities and risks coexist. Due to the high volatility of the market, investors need to establish sound risk management strategies to protect capital, reduce losses, and enhance trading stability. This section will introduce the main risks of cryptocurrency trading and share the experiences of practical traders to help investors improve their trading success rate.

1. The main risks of cryptocurrency trading

Understanding market risks is crucial before starting trading. The main risks in the cryptocurrency market include:

risk type	Content Description
Market volatility risk	Cryptocurrency prices fluctuate dramatically, with daily fluctuations reaching up to10%Above, there may be a significant pullback in the short term.
Leveraged trading risk	When using leverage to increase trading volume, although it can increase returns, it can also increase losses and even lead to liquidation.
Policy and Regulatory Risks	Governments of different countries have different regulatory policies towards cryptocurrencies, such as some countries banning transactions, which may affect market liquidity.
Exchange security risks	Exchanges may be subject to hacker attacks or fund misappropriation incidents, resulting in user fund losses.
Psychological and emotional risks	Greed and panic can affect trading decisions, and excessive trading or failure to set stop losses may lead to rapid capital shrinkage.

To reduce these risks, investors need to establish a comprehensive risk management strategy.

2. Risk Management Strategies and Techniques

Whether beginners or experienced traders, the following risk management strategies can effectively reduce trading risks:

1. Set stop loss and take profit

Stop loss（Stop Loss）Set a maximum acceptable loss ratio (such as5%-10%）When the price reaches this level, it will automatically close the position to prevent the loss from expanding.

Take profit（Take Profit）Sell when profits reach the target to avoid sudden market reversal and profit taking.

2. Reasonably allocate funds

Do not invest all funds in a single trading pair. It is recommended that a single transaction accounts for a significant portion of the total funds1%-5%To reduce the impact of a single loss.

Avoid excessive use of leverage, beginners are advised to use it2-3Double leverage, consider higher leverage after becoming proficient.

3. Choose the appropriate trading platform

Avoid trading on platforms with questionable security, choose regulated and highly liquid exchanges orCFDTraders (such asUltimaMarkets）Ensure the safety of funds.

Exchanges should provide double verification（2FA）Security mechanisms such as cold wallet storage are used to reduce hacker risks.

4. Avoid emotional trading

Be patient and wait for trading signals, do not impulsively enter the market due to a sharp rise or fall.

Develop a trading plan and strictly implement it to avoid emotional influence on decision-making.

3. Practical trading experience sharing

case 1Excessive leverage leads to liquidation

A trader opened a position when the price of Bitcoin rose20Multiple orders with multiple leverage, but short-term market correction10%As a result, the contract was forcibly liquidated and the funds were reset to zero.

Lesson learned:

●     Don't overly rely on leverage. While high leverage can amplify profits, it also amplifies losses.

●     Risk assessment should be conducted before trading, and stop loss points should be set to prevent reverse market fluctuations.

case 2Reasonably allocate funds and improve transaction stability

A trader uses low leverage（3Multiple times), and allocate funds to multiple trading pairs to profit from long-term holdings of Bitcoin and Ethereum, while utilizingCFDShort selling counterfeit currencies that have weakened in the short term.

Experience sharing:

Use low leverage+Diversified investment strategy can reduce capital risk and improve trading stability.

CFDTrading can flexibly utilize the short selling mechanism, making profits regardless of whether the market rises or falls (such asUltimaMarketsThe provided leverageCFDTrading).

case 3Calmly face market fluctuations and avoid panic operations

A trader bought Bitcoin at the high point of a bull market, but then the market rebounded. He did not immediately sell, but based on technical analysis, he judged that there was still room for improvement in the market and chose to hold it for the long term, ultimately gaining considerable profits.

Trading experience:

●     Stay calm during trading and avoid making wrong decisions due to short-term market fluctuations.

●     Can be combined with technical analysis+Fundamental analysis to determine market trends and avoid blindly following trends.