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Why It's Better to Trade Crypto Than Buy It in 2024

Person trading cryptocurrency on a laptop in a modern home office, showing charts and graphs on the screen, with a coffee cup, notepad, and indoor plants in the background.

June 19, 2024 | 

1745 Views | 

Filan Fisteku | 

Get Into Cryptocurrency Trading Today

Introduction

Cryptocurrencies have taken the financial world by storm, and as we step into 2024, the debate continues: should you trade crypto or simply buy and hold it? While both strategies have their merits, trading crypto offers distinct advantages that can be particularly beneficial in today's dynamic market. Let’s delve into why trading crypto might be a smarter move in 2024 and how you can get started even if you're a complete newbie.

1. Harnessing Volatility for Profits

Cryptocurrency markets are famously volatile. This volatility, often seen as a risk for investors, is actually a goldmine for traders. Unlike traditional buy-and-hold strategies where investors hope for long-term appreciation, trading allows you to profit from the frequent ups and downs of the market. 

Imagine the market as a roller coaster. While a buy-and-hold investor waits patiently for the ride to end, a trader enjoys every twist and turn, making money from each rise and fall. Trading enables you to capitalize on short-term price movements, maximizing your potential returns.

2. More Frequent Opportunities

With trading, you don't have to wait for years to see significant returns. Daily, even hourly, market fluctuations provide continuous opportunities to enter and exit trades. This frequent engagement can lead to faster profit realization compared to the long-term waiting game of holding assets.

3. Flexibility in Market Conditions

The crypto market is influenced by numerous factors, from regulatory news to technological advancements. Traders can adapt quickly to changing conditions, employing strategies like short selling to profit from declining markets. In contrast, long-term investors may suffer significant losses during bear markets, waiting for eventual recovery.

4. Diversification of Strategies

Trading allows for the use of various strategies tailored to different market conditions. Day trading, swing trading, and scalping are just a few methods traders use to maximize their returns. This strategic flexibility is not available to those who only buy and hold.

5. Leverage and Margin Trading

Many trading platforms offer leverage, allowing traders to open positions larger than their actual account balance. While this increases potential profits, it also comes with higher risk. Platforms like eToro, XM, and Exness offer various levels of leverage, making it essential for traders to understand and manage their risk effectively.

6. Access to Advanced Tools and Analytics

Trading platforms provide a plethora of tools and analytics to help traders make informed decisions. From technical indicators to real-time market data, traders have access to resources that can significantly enhance their trading strategies.

7. Tax Advantages

Depending on your jurisdiction, trading might offer tax advantages. Short-term capital gains taxes can sometimes be lower than taxes on long-term investments. However, this varies widely, so it’s essential to consult a tax professional.

Getting Started with Crypto Trading

Now that you're convinced trading is the way to go, how do you start, especially if you're new to the world of cryptocurrencies? Here’s a step-by-step guide to get you on your trading journey:

1. Choose a Reliable Trading Platform

Selecting a reputable trading platform is crucial. Three highly recommended platforms are eToro, XM, and Exness. Each offers unique features and benefits:

- eToro: Known for its user-friendly interface and social trading feature, eToro allows beginners to follow and copy the trades of experienced traders.
- XM: Offers a wide range of educational resources and a robust trading environment suitable for both beginners and experienced traders.
- Exness: Known for its low fees and high leverage options, Exness provides an excellent platform for traders looking to maximize their returns.

Learn More About Choosing the Right Broker

Selecting the right broker is a critical step in your trading journey. To make an informed decision, read our detailed guide on how to choose the correct broker. This guide provides in-depth reviews, comparison charts, and user feedback on various brokers, ensuring you have all the information needed to pick the best platform for your needs.

Read our article on how to choose the correct broker

By investing time in selecting the right broker, you set yourself up for a successful trading experience. So take advantage of our resources and start your journey towards becoming a successful crypto trader today!

2. Create an Account and Verify Your Identity

Sign up on your chosen platform and complete the verification process. This usually involves submitting identification documents and proof of address.

3. Deposit Funds

Deposit funds into your trading account. Most platforms accept various payment methods, including bank transfers, credit cards, and even cryptocurrencies.

4. Start with a Demo Account

Before diving into live trading, practice with a demo account. This allows you to familiarize yourself with the platform and test your strategies without risking real money.

5. Learn the Basics of Trading

Invest time in learning the basics of trading. Understand technical analysis, chart patterns, and key indicators like Moving Averages, RSI, and MACD. Platforms like XM offer extensive educational materials, including webinars and tutorials.

6. Develop a Trading Strategy

Formulate a trading strategy that suits your risk tolerance and trading style. Whether you prefer day trading, swing trading, or scalping, having a clear plan is crucial.

7. Start Trading

Once you’re comfortable with your strategy, start trading with a small amount. Monitor your trades closely and adjust your strategy as needed.

8. Stay Updated and Keep Learning

The crypto market is constantly evolving. Stay updated with market news, trends, and developments. Continuous learning and adaptation are key to successful trading.

Conclusion

Trading crypto in 2024 offers numerous advantages over simply buying and holding. The ability to profit from market volatility, frequent trading opportunities, strategic flexibility, and access to advanced tools make trading a compelling option. By choosing reliable platforms like eToro, XM, and Exness, and following a structured approach to learning and trading, even beginners can navigate the exciting world of crypto trading successfully. So, buckle up and enjoy the ride - the crypto roller coaster is more thrilling than ever!

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Total Market Cap The Total Market Capitalization (Market Cap) is an indicator that measures the size of all the cryptocurrencies.It’s the total market value of all the cryptocurrencies' circulating supply: so it’s the total value of all the coins that have been mined.

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