How Much Money Do You Need To Start Trading Cryptocurrency?
How Much Money Do You Need to Try Your Hand at Crypto Currency Trading? Trading is a relatively risky way of making money that requires knowledge and skills. Cryptocurrency trading is more dangerous because it is a more volatile asset. On the other hand, high volatility in the value of digital money leads to a rapid loss of capital and an opportunity to increase it.
You can start trading cryptocurrencies for hundreds of dollars. But how you manage such a small amount can cause your account to be created or broken. You can start with many more, say thousands of dollars, but the same trade rules always apply. The first step is to choose a regulated broker or exchange. There are detailed reviews of various popular trading platforms on Finty. No matter what currency you set aside for cryptocurrency trading, your priority is always to protect the capital. As crypto moves faster, the loss can quickly feed into your capital. And also, if you are serious about making money from cryptocurrency trading, you need to develop a risk management plan to protect your account. One of the guidelines for this is to trade without more than 1% risk in every trade. So, if you have $ 200, you can only risk $ 2 per trade.
For this, you need a broker who will give you a micro lot. Think again if you have come to trade cryptocurrencies for a big, fast profit. Play a slow game, and you have a chance to move on. Even if you start with $ 5,000, your risk management will remain the same, leaving only 1% of your account at risk. It looks like $ 5 is a big deal. It can be challenging to have more capital in some way. And also, you may be inclined to take more risks as the extra money feels like a safety pillow. Accept that cryptocurrency trading does not make you rich through the gate. You buy crypto for a few dollars, and you can’t see it doubling overnight. If you want to make money from cryptocurrency trading, play a slow, patient game. Build your account consistently by combining your profits. Risk money that you could easily lose and stick to your trading plan.
You can start trading cryptocurrency from $100–200
Mainly, it is better to start your acquaintance with cryptocurrency trading with the spot market, BitXM team experts recommend. This allows you to develop technical analysis, trading strategy, and trading discipline without exposing the deposit to high risk. In determining the starting amount, it is worth following the rule that its loss does not affect welfare in any way. That amount should allow you to participate in trading to master trading tools and formulate a strategy. If the first trading experience is successful, you should analyze the average profitability you get when working with a small deposit in the future.
Also, it is recommended to set a specific goal for you to achieve in a year or a month. For example, if the profitability is 10% per month, the deposit must be $ 10,000 to earn $ 1,000. At the ideal time, the income grows as the deposits increase with a uniform return of 10% per month. But there are no ideal opportunities, and you always have to strictly follow the rules of trade discipline, which is the main guarantee for successful trading in the long run.
$1000 will be enough to start trading
The main advantage of the crypto market is that you do not need capital to get started. A start-up trader only needs a thousand dollars to buy some digital money, transfer it to an exchange and assume the chosen strategy.
The more funds in the account, the easier and safer it is to trade.
The most convenient size for cryptocurrency trading should be trading with minimal risk, without levers. For example, BTC trades “1 to 1” for $ 13.4, or about $ 400 for an ETH purchase. The fewer funds available to buy or sell the cryptocurrency, the more borrowing is required. Margin trading can be profitable and effective if the trader has experience and knowledge of financial analysis. But experts emphasize that a novice trader must learn to manage risk and avoid losses to eventually reach an acceptable income level. Therefore, the initial funding amount should be adequate and should coincide with the current value of those assets that the investor will trade.