Bybit Learn
Bybit Learn
Oct 30, 2020

How to Trade Cryptocurrency for Sustainable Profits in 2022

If you’re keen to learn how to trade cryptocurrency, it naturally means you’re ready to embrace the volatility and the expeditious trends. While volatility brings uncertainties to the market, it can open up innumerable opportunities in the decentralized paradigm. 

The upshot? Cryptocurrency trading is not only the most prominent and society-redefining trend in the current financial market. Its growth is speculated to resonate in three upcoming years. Of course, it’s common to find yourself struggling to understand the concept of crypto trading, crypto ecosystem, crypto exchange, or wondering how to trade cryptocurrency.

Here’s the comprehensive crypto trading guide and tutorial that deciphers the trading processes, risks, legality, and ultimately, ensures you master the art of crypto trading.

5 Ways to Trade Cryptocurrency Successfully

The best way to trade cryptocurrency is first to understand the concept. Then, validate the exchanges’ security, decide on wallet types, and embrace different crypto trading methodologies. Always be logical yet quick to react to market volatility. In contrast, the key to successful crypto trading is to set a limit.

Regardless, of it’s fiat to crypto trading or crypto to crypto trading, you’ll understand the trading process’s details, crypto exchange and learn how to trade crypto in five simple steps.

  1. Decide on a trading method
  2. Understanding the crypto ecosystem
  3. Strategize your trading plan
  4. Choose a cryptocurrency trading platform
  5. Profiting trades by moderating risks

Decide on a Trading Method

Depending on your specific preferences, you can start trading cryptocurrency by buying digital currencies, mining crypto, or even staking to earn yield rewards. Ultimately, your choice of trades will yield different results. 

Trading from Fiat-to-Crypto

Most beginners would tap into the crypto world through the centralized exchanges of fiat money for cryptocurrency. Mainly because the fiat-to-crypto gateways widely boast of flexibility rather than complexity. Traders who are keen on fiat-to-crypto trading can expect seamless transactions with preferred cryptocurrencies and any money payment methods. The minimum requirement is to make sure the chosen exchange platform supports fiat money to cryptocurrency. From there, traders can then deposit money and perform the buy or sell process within its account. 

If you are a seasoned crypto trader keen to refresh their capital at the lowest transaction cost, you can opt to fund a crypto wallet through bank transfers or a credit card. While finding a balance between convenience and price is not an easy task, it’s certainly possible with Bybit. Not only the Bybit Express or Bybit P2P platform is user-friendly, but it also covers one of the largest numbers of fiat currencies.

Trading from Crypto-to-Crypto

Traders will only be trading crypto in the exchange from one crypto to another. However, traders are required to be aware that most of the current crypto exchanges focus only on Bitcoin (BTC) to other cryptocurrencies. What remains the same is that a trader needs to create a cryptocurrency exchange account and list his assets to open a position. Before the selling of crypto, it is secured in hot or cold wallet storage.

Coin Mining

Coin mining is a popular alternative to crypto trading. It does not require any asset investment but instead uses computing power, hardware, and cognitive resources to 

 to receive a reward. Coin mining does pay well initially, but as the supply decreases, the rewards are halved too. Besides, it also comes with a set of risks. That includes the uncertainty of a mined coin, its legitimacy, and of course, the liquidity it carries. 

Earn Staking Rewards

Staking is a less cognitive and labor-intensive alternative to coin mining. Unlike trading, users enter the crypto world without asset investment but rather earn staking rewards by maintaining network security. It usually consists of validating a transaction, holding coins in a wallet, or delegating funds to a staking pool. Although staking is resistant to cryptocurrency market manipulation, the rules and regulations are subject to change. Mainly it’s used to mitigate the artificial inflation of a project for a higher staking return. 

Understanding The Crypto Ecosystem

Crypto was once just a bubble in a niche industry. But unlike ten years ago, the crypto ecosystem has evolved into a diversified financial sector. It now comprises crypto exchanges, blockchain protocols, information aggregations, mobile apps, and a developing regulatory environment, thanks to the unique underlying decentralized nature. 

When trading crypto, a trader can eradicate the obscurity of transactions. As opposed to performing a transaction via a central server, the crypto network utilizes a system of peer-to-peer transactions that foster transparency. That means when a trader bought or sold a cryptocurrency, the transaction will be recorded to a shared digital ledger (blockchain) that is immutable. It’s completely automated, and it also cuts down on operational inefficiencies significantly.

Centralized Finance (CeFi) or Decentralized Finance (DeFi)

The advent of blockchain has evolved for further diversification and innovation that’ll only benefit the crypto community. What differentiates CeFi from DeFi is the transferability of risks. A CeFi user can be assured of the escrowed funds. While DeFi boasts of its independence by adhering to the protocols and autonomous controls. For example, decentralized exchanges (DEX) builds their structure through the peer-to-peer marketplace on blockchain to allow traders to be the custodian of their funds.

Discern the factors of Cryptocurrency Market Movement

The main constituent of a crypto trade is demand and supply. Meanwhile, there are a variety of factors that can exert influence on capital mobility. That includes market price manipulation, crypto news, political and government ordinances, the sustainability of the crypto ecosystem, scarcity, utilization of the supply of crypto alternatives, and more. 

Strategize Your Trading Plan

Profit is a direct reflection of a trading strategy. Beyond investing in crypto, adopting a strategic trading approach can make all the difference. Below are some of the methods to trade cryptocurrency:


Prioritizes a quick trade to make small yet constant profits. To scalp trade, traders need to utilize margin trade that starts from x1 to x100 leverage. The gains are relatively small, but you can make sustainable money with the scalping technique with concentration.

Day trading or Intraday Trading

Day trading features a similar tactic as scalping; it involves long and short within minutes. Typically, it involves trading on a day. What distinguishes intra-day and day trading is that it allows traders to hold an open position over a day. As long as the crypto market stays open, intra-day traders will not be affected. 

So, for day traders who’re keen on owning the cryptocurrency, you’ll need an exchange to trade on its price. As opposed to price speculation, you’ll be needing a broker. When you’re connected to a broker, the plus point is you can run through the purchase or sale of crypto on a broker demo account. But if you own an actual coin in exchange, practicing without losing money is not possible.

Range Trading

When range trading, traders need to consolidate a pool of coins before selling it at a higher price. The standard practice includes trading within a range. A range trader will make a transaction regardless of the market’s low and high. As long as the price is within the price range, a trader will act.

Swing Trading

In swing trading, it usually involves a larger amount of trade where a trader intends to hold an open position for a longer period of time. Swing traders usually do not check or trade regularly but rather deal within a few days or weeks. Most of the time, a swing trader uses analytic tools and research to determine the resistance levels, relative strength index (rsi), and investment trends preparatory to a trade.

Choose A Cryptocurrency Trading Platform

Security is essential when it comes to crypto trading. A reliable and secure cryptocurrency trading platform with a vital security feature is a plus. Not only can it minimize the risks of a fund transfer; traders can purchase or trade with ease. Here are some must-have requirements to narrow down your choices:

  • Providing interactive or personalized analytic charts
  • Verify with two-factor authentication (2FA)
  • Supports fiat-to-crypto exchange
  • Allows leverage trading from 1-100x leverage
  • Reasonable trading, deposit, and withdrawal fees
  • Offer insurance funds for severe coverage

Profiting Trades By Moderating Risks

Volatility best represents the cryptocurrency market. That means fortune can be made or lost in a blink of an eye. To address this issue, regardless if you’re an active trader or a novice trader, risk management skills in crypto trading is vital. Generally, diversifying a crypto portfolio is the best way to mitigate risks. It’s riskier for a trader to go all-in for one cryptocurrency than to build a stable position over an extended period. 

A good thing to know is that the failure rate of cryptocurrency is high. That means, before diving into a coin, it’s best to research its prospects. The last thing you want is another disappearance of a large group in the crypto paradigm.

The Differences: Investing vs. Trading Crypto

The term ‘investing and trading’ is used interchangeably in the cryptocurrency market. While these terms are inextricably intertwined, there’s indeed a difference. The most fundamental difference between investing and trading crypto is that it requires a distinctly different mindset and tactics to make money in the crypto market. So, should you be trading or investing in crypto? Here’s an overview of the differences: 

Investing Cryptocurrency

Investors tend to have a longer-term outlook. That means a trader is prepared to commit over an extended time to these digital assets for more massive returns. Generally, it means investors intend to buy and hold (HODL) cryptocurrencies regardless of market volatility.  

Investors usually create a position at the lowest price and gradually build wealth through price appreciation of the project’s digital assets and shares. Investing in cryptocurrency usually involves minimal buying and selling assets. However, hedging is quintessential to managing any of the open positions. Principally, investing in cryptocurrency means you are in for the long haul, even if there are price fluctuations. 

Trading Cryptocurrency

As compared to crypto investment, traders lay hold of profits through the rise and fall of markets. That also translates to the enter and exit of a position over a shorter time frame for smaller but more frequent profits. When it comes to trading crypto, the most fundamental principle is to buy low and sell high in a considerably short period. The goal is to maximize the potential percentage of gains based on short-term price trends. Ultimately, to maximize capital growth and preservation.

There’s no one shoe that fits all trading strategies. The best way to determine which techniques suit you best is by trying it out. Set your emotions aside and be logical when analyzing crypto trading strategies. Naturally, you will find your momentum within a trade.

How to Start Trading Cryptocurrency

Anyone can start trading cryptocurrency. But it’s undoubtedly confusing at the beginning. The crypto trading process itself differs from trading on fiat exchanges. Ultimately, the question any beginner would ask is how to start trading cryptocurrency? Here’s a list of requirements to help you kickstart your trading journey and start earning passive income.

1. Decide on a Cryptocurrency Exchange

The best way to start trading cryptocurrency is first to decide on an exchange to trade on. Similar to forex trading, novice users need to first register and deposit funds into the account hosted by the crypto exchange. A trader can only initiate the trading process upon the completion of the signups.

When selecting a cryptocurrency exchange, there are a few factors that may sway your decision. That includes geographical restrictions, transaction fees, technical support, security, ease of use, and leverage. But since cybersecurity is on edge, trading on cryptocurrency exchanges that use cold wallets is best to steer clear of these notorious hackers.

2. Select a Cryptocurrency Wallet

The use of a cryptocurrency wallet is inevitable to store and retrieve any digital assets. Since crypto is vulnerable to security hacks, using an integrated cryptocurrency wallet, preferably a cold wallet, is vital to safeguard your private keys. Yes, there is an overwhelming selection of crypto wallets ranging from Coinbase wallet, Binance trust wallet, to Poloniex wallet.

To narrow down your selection, make sure the wallets are compatible with your geographically needs. A crypto wallet with robust security, including password and data encryption, intuitive interface, and two-factor authenticator verification (2FA), is a plus. 

Hot Wallet

A wallet is a tool for cryptocurrency owners to store, receive, or send crypto from one to another. While a hot wallet does not steer away from its primary function, it’s instead built based on the internet ecosystem. 

A hot wallet works best to facilitate the decentralized blockchain ledger’s changes rather than storing a currency. And the linked public and private keys are essential to activate any transactions.

While the hot wallet’s security and safety are debatable, the vulnerability still lies upon a user’s behavior. However, it’s undeniable that hot wallets are prone to hacking because of their online private keys storing nature. The chances for hackers infiltrating a hot wallet are high but can be prevented through a hot wallet’s strategic use. For example, keeping a small amount of cryptocurrency in a hot wallet is less likely to be targeted for hacks. It’s simply not worth the effort of hacking into an account with little tokens. 

Verdict: Suitable for those who intend to access crypto easily and more frequently. It’s easy to set up and accepts more variety of tokens.

Cold Wallet

On the contrary, a cold wallet does not utilize internet connectivity to store any cryptocurrencies. A cold wallet, aka cold storage, is a digital wallet that holds personal information, including private keys offline on a platform that is only accessible physically. Hence, preventing cyber infiltration online. 

These cold wallets can be in the form of paper or hardware, depending on your likings. As the name suggests, a paper wallet exists when a cryptocurrency owner records its private keys on a piece of paper. As for hardware wallets, it can appear in the form of a remote device connected to the internet when used and disconnects when the transaction is over. This hardware can be in the form of a USB stick or a memory chip. 

Verdict: Cold wallet is safer and less likely to be hacked since it’s not connected to the internet. However, the risks of losing a cold wallet in case of a fire or hardware malfunction are inevitable.

3. Keep up with the Crypto Trends

It is best to keep in mind that cryptocurrencies are volatile assets. Naturally, these assets’ prices fluctuate over time within a span of a few minutes or hours. Staying up-to-date with the unceasing market movements is keeping abreast of the crypto trends, events, or the latest news. It’s also worth keeping an eye on the data, including market capitalization, supply, and trade volume. 

Common Mistakes When Trading Crypto  

Trading crypto is no different from Forex. The goal is to maximize profits with as little loss as possible. When it comes to trading, losing is inevitable; the key is how we can minimize these losses? Here are some common crypto trading mistakes you should avoid:

Over Leveraged

Trading cryptocurrency with leverage is legal, and it’s often used due to its efficiency. It is great to maximize the returns for profitable trades; however, it also magnifies losses when the crypto market favors your predictions. In short, when a crypto trader is over-leveraged, it increases crypto volatility. 

The use of position sizing is great to mitigate risks in a leveraged trade. When a position size is set, it’s clear that you can’t lose more than what you’ve selected to lose on a single transaction.

Fall into the trap of revenge trading

As the name suggests, revenge trading has a psychological effect on a trader who attempts to win back the losses by entering the market with a larger and riskier trade. Of course, there are chances of winning back what you lost. But, it’s riskier than you think.

Here are some of the symptoms that show you’re performing a revenge trade:

  • Eager to trade again after suffering a significant loss
  • Assuming rather than strategizing a trading plan
  • Omit the entry and exit strategy
  • Constantly feeling like it is the right time for a comeback

The best way to overcome these crypto trading mistakes is to set your emotions aside and get analytical to identify what went wrong. Be aware of the errors, and don’t repeat them ever again.

Is Cryptocurrency a Good Investment?

Cryptocurrency is still a good investment despite its volatility. While these uncertainties can be doubtful, they can also open up new opportunities for profit gains. Cryptocurrency is the future given that Bitcoin’s prospect is beaming, and there are plenty of decentralized projects lining up. For example, many international entities like Microsoft, Visa, Paypal, Square are already placing their crypto bets into the crypto marketplace. These projects will only continue to strengthen the crypto position in the financial industry. 

Investing in cryptocurrency means transparency is prioritized. Its intuitive nature makes a deposit, options, transaction, and a contract pellucid. Any actions can be taken without any access or involvement of an intermediary. It is dependable and only relies on the technology built on the blockchain. 

The development of decentralized finance (Defi) also further increases transparency in the ecosystem by impeding the centralized structures directly on the blockchain. 

Is Trading Crypto a Good Passive Income Source? 

Trading in crypto requires more frequent actions and strategic decisions as compared to investing in crypto. While traders rely on more significant returns through active trading, HODL crypto is a better option to earn passive income. 

Alternatively, coin mining, staking, and affiliate require little to no capital depositing to earn passive income. The challenging part includes the sustainability of these approaches. So, depending on your choice and expertise, making passive income with crypto is possible.

Who Can Trade Cryptocurrency?

Whoever complies with the trade regulations can trade Bitcoin and other cryptocurrencies in general. However, it highly depends on geographical constraints and legality. While some countries treated Bitcoin (BTC) as a commodity and currency, there are some nations outlaw the utilization of digital currency. Mainly because of its decentralized nature that is against the existing monetary system. 

Here’s a list of the countries that are against the trade of Bitcoin and cryptocurrency: 

  • Afghanistan
  • Algeria
  • Bangladesh
  • Bolivia
  • The Republic of Macedonia
  • Pakistan
  • Saudi Arabia
  • Qatar
  • Vietnam

Bitcoin is restricted and prohibited from trading:

  • American Samoa
  • China
  • India
  • Indonesia
  • Ecuador
  • Egypt
  • Morocco
  • Nepal
  • Zambia

*Please refer to the local regulations before proceeding to trade cryptocurrency. The rules are subjected to change based on the local authority. Bybit holds no responsibility for any misinterpretation of the above data.

The Future of Cryptocurrency Trading

Bitcoin and cryptocurrency trading possesses a bright future, given that decentralization is favorable by the public in improving fair provisions and perceptions on economic development. One can agree that Bitcoin and crypto, in general, are gaining momentum and recognition from the crowd. Its value continued to spike and is speculated to reach new heights in the marketplace in the coming future. 

Read on to clarify Bitcoin’s future further and if XRP is a good investment that’ll triumph over Bitcoin.