To make money trading cryptocurrencies, you simply need to buy low and sell high. Sounds simple, right? Let's illustrate this simple fact with a concrete example that will allow us to understand how much money to earn by trading cryptos:

Let's imagine that you have a trading account (or an XTB trading account) (these two brokers offer crypto-currency trading) and that it is funded up to $1,000. The current Bitcoin exchange rate is hovering below $8,400, meaning that a full Bitcoin is worth $8,400. Fear not, you don't have to buy a full bitcoin to trade, you can bet up to the amount of money you have.

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You are doing a chart analysis or applying your Bitcoin trading strategy and your forecast for the day is bullish. An important level of resistance is located just under $8,400; you go buyer on a breakout of this level and you decide to place your stoploss at the level of the last lowest level, also support at $7,860. From your entry point at $8,400 to the stoploss located at $7,860, the fall would be around 6.43% (fall of $540 / $8,400 x 100 equals: 6.43%). So, if you decide to invest your $1,000 on the rise in the Bitcoin price with these parameters, then you only risk a maximum loss of $64.30 in the event of a bad prediction and a reversal in the price. You decide to take this trade and then wait to see how the market will move.

After a few days, your prediction turns out to be correct! The price of Bitcoin goes beyond $11,000 before falling back to $10,300 so you decide to close your position. From $8,400 to $10,300 there was a rise of $1,900, this represents an increase in the value of Bitcoin of around 22.62% ($1,900 / $8,400 x 100 equals 22.62), in other words your investment of $1,000 has also gained 22.62% on this single trade, or $226.20 in profits and for a risk of only $64.30!

You thus realize how it is possible to earn money through crypto-currency trading but also what are the risks involved in these speculative operations and which you can obviously configure according to your risk aversion. The use of a stoploss is strongly recommended and allows you to limit the loss in the event of a bad forecast, conversely you can also set up a take profit which will allow you to exit the market when a certain price level is in agreement with your estimate is reached by the course.

Bitcoin and cryptocurrency brokers

You are an apprentice Bitcoin and crypto-currency trader, or want to get started in this type of trading, then you absolutely need a crypto broker. If you don't know what a broker is, we will try to brief you on the subject.

Let's take an example from everyday life to illustrate what a crypto broker is and what it is for. Imagine that you want to buy an apple or any fruit or vegetable, then you go to the market in your village. The apple is what you want to buy and the village market is the place where you will be able to do it because it is here that other people sell apples. Conversely, an apple seller who needs to sell his stock will need customers and he knows where to find them, in this same market, because that is where other people want to buy them.

Your village market is therefore the place where buyers and sellers meet and can-do business. It is exactly the same with the financial markets and more specifically the cryptocurrency market. On the crypto market, there are buyers and sellers of different cryptocurrencies, both Bitcoin, Ethereum and Ripple. Every buyer or seller of cryptocurrencies needs a counterparty who will sell or buy cryptocurrency from them. It turns out that the cryptocurrency market is very popular and represents hundreds of billions of dollars of transactions, so there are thousands and thousands of participants, so cryptocurrency exchanges can be done very easily. and instantly. VS'

In other words, if you want to buy or sell crypto-currencies, you do so through a broker's platform and it will automatically find the counterparty available on the market for you to serve your order. Brokers are not only intermediaries between traders, they are also intermediaries between you and liquidity providers, this can be banks for example or investment funds that deal with very large amounts on the financial markets. Thanks to liquidity providers who work with brokers, it is thus possible to see trades executed even if they represent large amounts, and at the best rates.

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