How to start trading cryptocurrencies

What Is Crypto Trading? A Simple Explanation

When you trade crypto, you buy coins and tokens on an exchange and later sell them again in the hope of making a profit from price differences. Just like stock trading, you observe market movements, analyse price trends and react to price changes.

A key feature of crypto trading is its high volatility. The prices of Bitcoin, Ethereum and other crypto projects can change significantly within a short period of time. This makes crypto trading exciting, but also somewhat risky.

Beginner’s Guide: How to Start Crypto Trading

If you want to start trading crypto, it usually takes just a few steps:

1. Choose a platform for your crypto trading, such as Bitpanda

2. Set up your account and complete the verification

3. Use a demo version or start investing with small amounts

4. Learn the basic functions of your platform

5. Develop a simple strategy that aligns with your personal investment goals

6. Monitor your first crypto trades and learn from them

To make it easier for you to get started with crypto trading and help you avoid mistakes, we’ve put together additional content and tips for you here.

How Do I Learn Crypto Trading? Our Tips

To learn crypto trading, you’ll need time, patience and the right tools. Especially as a beginner, it helps to proceed in a structured way and gather information before diving into trading cryptocurrencies. Here you’ll find essential basics and our tips for crypto trading:

1. Choosing the Right Platform for Your Crypto Trading

When selecting a suitable trading platform, you can choose between a crypto broker and an exchange. Brokers like Bitpanda act as intermediaries between crypto traders and the market. They enable trading with crypto coins and tokens like Bitcoin or Ethereum at fixed prices, but charge fees for doing so. This makes brokers especially attractive for beginners who want to start buying cryptocurrencies.

Exchanges, on the other hand, are marketplaces that offer a platform for direct trading. This gives you more control, but also requires a deeper understanding of the market. Different providers often offer other types of trading in addition to crypto, such as stocks, CFDs (Contracts for Difference), and other financial products.

When comparing different brokers and exchanges, look out for the following criteria:

• Fees: consider transaction, deposit and withdrawal fees that can affect your profits

• Licensing and regulation: check the platform’s regulatory compliance and licensing to ensure it’s trustworthy and protects your investments

• User-friendliness: an intuitive user interface is important for efficient trading

• Available currencies: make sure the platform offers a wide selection of cryptocurrencies

• Security features: strong protocols include two-factor authentication and cold storage

• Other asset classes: if you’re interested in trading other assets like stocks, CFDs or ETFs, take that into account when choosing a platform

• User reviews and infrastructure: read experiences of other crypto traders and find out about the platform’s technical stability to avoid outages or delays during trading

Learning from history: Historical collapses of trading platforms

Historic collapses like Mt. Gox in 2014, where Bitcoins (BTC) worth hundreds of millions of dollars were stolen due to security gaps, and the fall of trading platform FTX in 2022 due to liquidity issues and management failures, highlight the risks of crypto trading. These events underscore the importance of checking the security practices and financial stability of crypto brokers and exchanges, and only trading with regulated providers.

2. Security as a Key Feature of Good Trading Platforms

When choosing your trading provider, security is paramount. Look for platforms with advanced security features. This protects your money and assets from unauthorised access and cyberattacks.

Common security features include:

• Two-factor authentication (2FA): to log in, you’ll need a second factor (e.g. your smartphone) in addition to your credentials

• Cold storage: your crypto is stored offline to prevent online theft

• Encryption techniques: secure your data and transactions by encoding them to prevent unauthorised access

• Regular security audits: platforms should regularly test for vulnerabilities and update security measures accordingly

3. Pay Attention to Regulatory Frameworks and Licences

Choosing a regulated trading provider is crucial to ensure safety and compliance in crypto trading. Brokers and exchanges with official licences that follow strict regulatory standards protect traders from fraud and mismanagement. They also provide transparency and reliability.

As an investor, consider regulatory compliance as a key criterion when deciding on a platform. This ensures your trades take place in a secure and regulated environment.

4. Avoid Emotional Trading with the Right Strategies

In crypto trading, psychology plays a huge role alongside market analysis. Beginners often underestimate how emotions like fear, greed or crypto FOMO ("fear of missing out") can influence their behaviour. These emotions can lead to hasty decisions—selling too late during losses or buying recklessly during sharp price increases.

A helpful tool here is the Fear and Greed Index, which gauges market sentiment using various indicators to show whether traders are currently fearful or greedy. For beginners, it offers guidance to better understand emotional market phases and act more rationally.

Strategies for emotional discipline and rational decision-making

To avoid impulsive decisions, you can train yourself to control your emotions. Pause before trading and ask yourself whether your impulse fits your analysis and strategy. Keep a trading journal to track emotional decisions and learn from them. Also, set clear entry and exit rules to prevent reactive trading.

5. Dealing with Losses and Responsible Investing

Unexpected losses in crypto trading can trigger intense emotions. Emotional discipline strategies (as mentioned above) help. But it’s just as important to mentally prepare for worst-case scenarios.

Know that unforeseen events—like new regulations or a rival crypto’s technological breakthrough—can result in significant losses. That’s why you should only invest as much as you’re willing to lose.

Not sure how much of your portfolio a single crypto like Bitcoin should occupy? Position sizing (trade size based on total capital) is a useful guideline. Diversifying your portfolio also promotes responsible trading. Never invest all your capital in one asset—spread it across different ones to lower the risk of large losses.

6. Tools and Techniques for Risk Management

Sudden market shifts or unexpected events can increase loss risks in crypto trading. That’s why risk management strategies are essential. Depending on your broker or exchange, the following methods help secure your portfolio and support a long-term strategy:

• Stop-loss orders: automatic sell orders triggered when a price drops below a certain threshold

• Diversification: spreading your investments across various assets

• Position sizing: tailoring trade size based on your total capital

• Take-profit orders: automatic sales to lock in profits at pre-set price levels

• Trailing stops: dynamic stop-losses that adjust as prices rise

• Hedging: opening counter-positions to reduce losses in volatile markets

7. Best Practices for Securing Your Trading Accounts and Wallets

To protect your trading accounts and wallets:

• Use strong, unique passwords

• Enable two-factor authentication

• Regularly review your security settings

You’ll find a detailed guide in our Academy article on securely storing cryptocurrencies.

8. Understanding Verification and Finality of Blockchain Transactions

Blockchain transactions are irreversible—once crypto is sent to another wallet, it can’t be undone. Always double-check transaction details, such as the recipient’s wallet address and the amount, before confirming.

Transaction fees are also important. Miners verify and add transactions to the blockchain, earning fees and newly mined coins/tokens for their efforts. These fees incentivise miners to keep the network running securely.

If you’d like to learn more, read our Academy article on transaction fees for Bitcoin and other cryptocurrencies.

Advanced Trading Strategies

Once you've mastered the basics of crypto trading, you may want to explore more advanced strategies to maximise your potential returns. These include:

• Market and limit orders

• Bullish candlestick pattern analysis (e.g. Hammer, Three White Soldiers)

Such strategies help experienced traders spot upward trends and optimise profits. However, they require deep market knowledge, understanding of leverage, and solid risk management—and may come with higher risks.

Many seasoned traders conduct thorough technical and fundamental analysis before investing. Technical analysis examines patterns and trends in price movements, while fundamental analysis looks at external events and economic indicators that may affect value.

Introduction to Technical Analysis

If you’re entering the world of crypto trading, technical analysis will be a great help. It involves analysing price charts and trading volumes to identify patterns that hint at future movements. Useful tools include the moving average and the Relative Strength Index (RSI). You’ll find more details in our technical analysis guide.

Overview of Fundamental Analysis

Fundamental analysis in crypto trading focuses on external events and financial factors to determine a currency’s true value. This includes examining news, economic indicators and technological developments that influence the market. It evaluates a crypto's long-term growth potential based on fundamentals rather than short-term price speculation.

If you want to dive deeper into fundamental analysis, check out our guide.

When you're ready for advanced trading, Bitpanda Fusion provides the tools you need to manage high-volume trades efficiently and securely. From fast order execution to chart analysis—Bitpanda’s advanced trading platform gives experienced traders everything they need to elevate their strategy.

The pros and cons of trading cryptocurrencies

Crypto trading offers high profit potential due to market volatility but also carries an increased risk of losses. Technical issues on the platform, security vulnerabilities or human errors when placing orders can also become a problem. Added to this is the limited regulation of some crypto trading platforms, which makes it difficult for beginners to identify trustworthy providers.

Unlike, for example, trading shares, cryptocurrencies aren’t tied to regular stock exchange hours and can be traded around the clock. The high liquidity of the crypto market also enables fast transactions. Overall, trading cryptocurrencies often presents lower entry barriers than traditional financial markets.

Conclusion: how to enter crypto trading well prepared

Crypto trading is a complex field that requires knowledge and caution. To make a successful start in trading, you should be familiar with and use different strategies. The combination of choosing the right trading provider, using a thorough method of analysis, having a solid understanding of security and being aware of the psychological aspects of trading forms a good basis for long-term success. When trading cryptocurrencies like Bitcoin and others, you should be prepared to keep learning and adapt your strategies to the changing conditions of the crypto market. Only this way can you seize the many opportunities while also keeping the risks under control.

Frequently asked questions about crypto trading

Here we answer the most frequently asked questions about crypto trading with Bitcoin and other coins and tokens.

Book or courses – what’s the best way to learn crypto trading?

For beginners, learning crypto trading works best through a combination of theory and practice. Whether online or offline, through a book or courses – you can learn crypto trading in different ways. Bitpanda Academy also offers free content to help you further your crypto trading education step by step.

Can you make money with crypto trading?

Yes, it’s possible to make money with crypto trading – but losses are always possible too. Anyone wanting to trade successfully in the long term should understand the market, develop strategies and start with small amounts. You’ll need patience, discipline and risk management to become a successful crypto trader.

Is crypto trading safe?

The safety of crypto trading can be divided into technical security and market risk. You can ensure a high level of technical security yourself by taking the right precautions. Pay attention to security when choosing a broker or exchange and when storing your wallet addresses and passwords. Despite these precautions, the crypto market is only partially safe due to its volatile nature.

Where can I trade crypto coins and tokens?

You can trade crypto coins and tokens on specialised crypto trading platforms. Providers like Bitpanda give you access to a wide range of cryptocurrencies. The platforms differ in their features, fee models and security standards. It’s worth comparing, especially for beginners wanting to learn crypto trading and looking for a platform that combines user-friendliness with professional tools.

Further topics on cryptocurrency

Want to learn more about crypto trading for free? Then our Bitpanda Academy offers a good introduction to the basics and challenges. In numerous articles, we address fundamental financial questions and provide beginners, advanced users and experts with insights into the technologies, principles and functions of various cryptocurrencies. If you'd like to delve even deeper into topics like crypto security, we recommend our comprehensive guides.

• Crypto taxes

• Difference between cryptocurrencies and fiat currencies

• Order types and order add-ons explained