So you’ve decided to go into crypto trading?
Great choice, especially for my Nigerian readers with all the inflation and economic crisis everywhere. But crypto isn’t something you wake up one morning and start doing. In fact, Nike’s “just do it” motto is forbidden in the crypto world. Preparation is the keyword here, and I’ll give you some tips on how to start this journey on the right foot.
Crypto Basics
How well do you know crypto—like really know it?
Before going off to the big stuff like ETFs and Halving, you need foundational crypto knowledge. You must be able to answer questions like: What is crypto? What’s the difference between crypto and stock trading? What are crypto investment strategies? Things like this help you understand business or crypto articles and guide you when making certain investment decisions. So here they are:
What is Crypto?
Quick question; Do you play Monopoly?
Imagine the same paper money but this time, it’s worth something in real life. And instead of being paper, it’s all digital. Crypto is like digital Monopoly money stored in an advanced notebook (blockchain), mined like gold (crypto mining), and stored in wallets you don’t lose on the couch (crypto wallets).
Cryptocurrency, or crypto, employs advanced cryptographic techniques to track transactions and ownership within a decentralized network. This innovative system operates without a single controlling authority, offering a peer-to-peer payment platform that empowers anyone, anywhere, to send and receive payments online. Every transaction is painstakingly recorded in a public ledger and securely stored in digital wallets.
Crypto vs Stocks
Both are legends in the financial industry, with slight differences.
The concept of stock trading dates back to the early 17th century. The first official stock exchange was established in Amsterdam in 1602 when the Dutch East India Company issued the first shares of stock and bonds, allowing investors to buy a small part of the company and potentially earn profits based on its success. Meanwhile, the first notable crypto transaction was on May 22, 2010, famously known as “Bitcoin Pizza Day,” when a programmer named Laszlo Hanyecz paid 10,000 bitcoins for two pizzas. Till today, Bitcoin Pizza Day is celebrated worldwide.
So what are the main differences between these two? Here’s a quick infographic.
Types of cryptocurrencies
If I ask you to name 5 crypto coins right now or drop your phone in water for 1 minute, will your phone survive?
Everybody knows about Bitcoin, but there’s so much more. In fact, there are about 9,000 cryptocurrencies, according to research in 2022. Apart from Bitcoin, we have altcoins, stablecoins, Defi tokens, and then there’s NFTs.
Why bother with cryptocurrencies? Knowing the various cryptocurrencies helps you know which is more valuable and which to buy, sell, or invest. You can read this article for more on crypto basics.
Crypto Trading Strategies
Do you agree that there’s a big difference between knowing what fishing is and how to fish?
Crypto, like fishing, has many strategies. Although, experience plays a big role in navigating the crypto market, studying trade fundamentals helps newbie traders travel far on the road to success.
What are these trading strategies?
| Strategy | Overview | Goal | Techniques |
|---|---|---|---|
| Day Trading | Buying and selling cryptocurrencies within the same day | Profit from short-term price movements | Technical analysis, trend lines, and volume charts |
| Swing Trading | Holding positions for several days to weeks | Capture medium-term trends | Momentum indicators, chart patterns, and moving averages |
| HODLing | Long-term investment strategy; holding crypto despite volatility | Benefit from long-term appreciation | Fundamental analysis, strong conviction in chosen cryptocurrencies |
| Scalping | Numerous trades throughout the day for small profits | Accumulate small profits over time | High-frequency trading, automated bots, technical analysis |
| Arbitrage | Exploiting price differences across different exchanges | Profit from price disparity | Simultaneous buying and selling on different platforms, quick execution |
| Trend Following | Trading based on current market direction (upward or downward) | Reduce the impact of volatility, lower average cost | Moving averages, trend lines, momentum indicators |
| Range Trading | Trading within predictable ranges of highs and lows | Buy at support, sell at resistance | Support and resistance levels, oscillators like RSI |
| Dollar-Cost Averaging (DCA) | Investing a fixed amount at regular intervals | Reduce the impact of volatility, lower the average cost | Consistent and scheduled investments irrespective of market conditions |
| Position Trading | Holding positions for long periods (months to years) | Take advantage of long-term trends | Fundamental analysis, macroeconomic trends, project developments |
| News-Based Trading | Making trades based on news events and announcements | Profit from market reactions to news | Monitoring news sources, social media, official announcements |
International Crypto regulations
This is perhaps the most important thing every trader should know. Legal regulations play a huge role in crypto trading as they define what is allowed and what isn’t, which includes your crypto profits. To avoid any headlock with financial government institutions, make sure you understand the kind of legal regulations that exist within your country.
Is crypto trading legal in Nigeria?
Crypto trading is legal in Nigeria however, the hurdles are rigorous. Recently, the Nigerian SEC released a statement, explaining the enrolment process and standards that domestic and international exchanges need to meet before approval.
Aside from this, several events have also occurred; including the Binance lawsuit and the P2P trade ban. These events reflect the rigid stance of the federal government and the CBN on crypto trading, making the citizens afraid of performing crypto transactions.
But you don’t need to worry about that.
With Jackocoins, you can trade your BTC, USDT, BUSDT, and ETH to Naira freely without the fear of legal restrictions. Enjoy free crypto transactions, and speedy payments at the best rates.
Simply download the app, sign up, and get verified.
Don’t forget to stay updated with the latest changes and crypto trends, and remember, learning never stops. There’s a pile of trading resources on the internet, make sure you find what works for you and stay consistent.
So, my dear readers, there goes my 2 cents’ worth of trading advice. Hope it was worth the read!
Do you have questions about crypto trading in Nigeria or just want to share your 2 cents’ worth of advice? Drop them in the comments!
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