How to Play Cryptocurrency: Trading Guide for Beginners Entering the Market

Cryptocurrency Market Growing Strongly - Do You Want to Join?

With 24-hour trading volume currently reaching approximately $1.4 billion USD, the crypto market continues to attract both individual investors and major financial institutions. In recent years, this market has grown exponentially, especially after Bitcoin (BTC) is considered an attractive alternative asset class. If you’re curious about how to trade cryptocurrencies, this guide will provide the essential foundational knowledge to start your crypto trading journey.

Basic Principles: Buy Low, Sell High

Crypto trading is similar to traditional market trading — you buy an asset when the price is low, hoping to sell it at a higher price to make a profit. Although modern markets offer many complex tools like futures contracts, options, or swaps, the core principle remains unchanged: making money from price differences.

With long (long) position trading, you sell what you bought at a higher price. Conversely, short (short) position trading allows you to sell first and buy back later at a lower price. However, theory is often simpler than reality — you need to accurately assess the true value of the asset and whether the market agrees with your valuation.

Unrealized Profit vs. Realized Profit

When opening a trading position, any profit you see on your account is only “paper profit” — or unrealized profit — until you actually close that position.

For example: If you bought 1 BTC at $5,000 in March 2020 and the current price is $18,250, you have an unrealized profit of $13,250. But if the price drops to $17,000 in the next hour, your potential profit decreases accordingly. Profit only becomes real when you sell and withdraw from the position.

Understanding this is crucial because it helps you avoid being misled by temporary profit figures and make precise sell decisions at the right time.

Trading and Investing: Two Different Approaches

Many people confuse these two concepts, but they are entirely different:

Investing: You buy to hold long-term, possibly for several years or decades. You believe in the technology, project, and its future. This is called “HODL” (Hold On for Dear Life).

Trading: You are only interested in short-term price movements. You might hold a position for a few hours, minutes, or even seconds. Day traders (day trader) or scalpers (scalper) operate this way.

The choice depends on your personal financial goals and your expectations for future price movements.

Why Do You Need Dedicated Trading Platforms?

In theory, you could trade cryptocurrencies directly peer-to-peer, but that’s not practical at scale. Exchanges provide:

• High liquidity: You can quickly buy or sell without searching for a counterparty
• Reliable prices: Prices are determined by actual market supply and demand
• Secure trading: Exchanges ensure transactions are executed properly
• 24/7 support: You can trade anytime

Spot Trading ( vs. Derivatives )Derivatives(

Spot Trading: You buy or sell actual cryptocurrencies and receive coins/tokens in your wallet.

Derivatives: You trade contracts )futures, options, swaps( tracking the price of the underlying cryptocurrency. You do not receive actual coins but profit from price differences. This form of trading is more complex and riskier.

) What Are Trading Pairs? ###

On exchanges, coins are listed as pairs like BTC/USDT, ETH/BTC, or LTC/USDT.

The first currency (BTC) is the “underlying asset” — what you are buying or selling. The second (USDT) is the “quote asset” — which determines the price of the first currency.

For example: BTC/USDT = 18,250 USDT means 1 BTC = 18,250 USD.

Pricing Types:

• Crypto-to-crypto pricing: BTC/ETH, ETH/USDT (good if you want to hold coins)
• Fiat-to-crypto pricing: BTC/USD, BTC/EUR (easier to calculate profits in dollars)

Understanding How Prices Are Formed in the Market

The “market price” you see on the platform (e.g., $18,000) is just the last traded price — not necessarily the price you will get when buying or selling.

( Bid, Ask, and Spread )

Ask ###Selling Price(: The lowest price a seller is willing to accept
Bid )Buying Price(: The highest price a buyer is willing to pay
Spread: The difference between Ask and Bid

Example:

• Ask: 18,050 USDT )seller wants to sell at this price(
• Bid: 17,800 USDT )buyer wants to buy at this price(
• Spread: 250 USDT

In highly liquid markets, spreads are very small. In less liquid markets, spreads are larger, increasing your trading costs.

) Maker vs. Taker ###

When trading, you have two roles:

Maker: You create new orders (set your own price). You provide liquidity to the market. Fees are lower for makers.

Taker: You execute existing orders from makers. You take liquidity from the market. Fees are higher.

How Important Is Market Depth?

Market depth indicates whether the market has enough buy/sell orders to handle large trades without significantly changing the price.

Suppose you want to sell 1 BTC, but the market only has 500 small buy orders (each 0.002 BTC) at different prices. You will need to execute all 500 orders, and the final price you get will be much worse than the initial highest bid. That’s why good market depth is important.

Order Book (

The order book displays all active buy and sell orders, updated continuously. It helps you:

• See current Ask/Bid levels
• Assess market depth
• Predict short-term trends based on order volume

Common Types of Trading Orders

) Limit Order ###

You specify the maximum/minimum price at which you are willing to buy or sell, then wait for the market to match.

Advantages: You control the price, can calculate profit/loss precisely

Disadvantages: The order may never fill if the price doesn’t reach your level

Example: “I want to buy 1 BTC at a maximum of 17,500 USD”

Advanced Limit Orders:

• Post Only: Only place the order if it does not match an existing order (maker order)
• FOK (Fill or Kill): Fill the entire order immediately or cancel it
• IOC (Immediate or Cancel): Fill immediately or cancel remaining

( Market Order )

You buy or sell immediately at the best available price.

Advantages: Instant execution

Disadvantages: Less control over price, wider spreads, higher risk of slippage

Note: Continuous market orders often lead to worse outcomes because you buy high and sell low.

Stop Order (

This order automatically triggers when the price reaches a certain level, then submits a buy or sell order to the market.

Type 1 - Conditional Stop:

• Trigger price )trigger price###: The price that activates the order
• Order price (order price): The actual price at which the order is placed

Type 2 - OCO (One-Cancels-the-Other): You place two stop orders — one for profit target, one for stop loss. When one is triggered, the other is automatically canceled.

Example OCO:

• Current Bitcoin price at $18,000
• Take profit: Sell all at $19,000
• Stop loss: Sell all at $17,500 to minimize losses

Stop orders are very useful for risk management and locking in profits without constantly monitoring prices.

Differences Between Trading Pairs

Choosing trading pairs depends on your strategy:

• Want to hold and increase BTC? Trade BTC/altcoin to avoid selling all
• Want profits in fiat? Choose pairs based on stablecoins or fiat currencies (e.g., BTC/USDT)

Risks You Should Know

Cryptocurrencies are highly volatile — prices can change by dozens of percent within hours. This creates opportunities for large profits but also significant risks of losses.

Key points to remember:

1. Risk management: Never trade money you cannot afford to lose
2. Use stop-loss orders: To limit potential losses
3. Avoid greed: Don’t try to capture every move; small consistent profits are also good
4. Continuous learning: Use educational resources and demo trading before risking real money

Crypto trading is a skill — you need practice, learn from mistakes, and develop your own strategy. Start small, manage risks well, and gradually expand as you gain confidence.