Crypto trading for beginners: how to trade cryptocurrency

What is crypto trading?

Crypto trading means buying and selling cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH) and thousands of altcoins to profit from price changes. Traders work on shorter time frames than long-term holders, who are often called HODLers. Every trade happens against a pair, such as BTC/USDT or ETH/BTC: the first asset is what you buy or sell, the second is what you pay with.

Spot trading vs derivatives

Spot trading

On the spot market you buy the actual coin. If you buy 0.1 BTC, you own 0.1 BTC and can withdraw it to your own wallet. Your maximum loss is what you put in. Spot is where every beginner should start.

Futures and perpetual swaps

Futures and perpetual contracts let you bet on price direction, including going short, often with leverage. Perpetuals have no expiry but charge or pay a funding rate every few hours. Leverage multiplies both gains and losses, and positions can be liquidated automatically. Availability depends on your country: retail crypto derivatives are banned in the UK and restricted in many other places.

How to choose a crypto exchange

• Regulation and licensing in your country (e.g. FCA registration in the UK, MiCA authorisation in the EU, state licences in the US).
• Security track record: proof of reserves, cold storage policy, 2FA and withdrawal whitelists.
• Liquidity: tight spreads and deep order books mean better fills.
• Fees: maker/taker fees, deposit and withdrawal fees, and spread on "instant buy" buttons.
• Supported assets and fiat on-ramps for your currency (GBP, EUR, USD).

Centralised exchanges (CEXs) are simpler; decentralised exchanges (DEXs) let you trade from your own wallet but add smart-contract and slippage risk. Learn more in our crypto security guide.

Crypto order types explained

What moves crypto prices?

• Liquidity and macro: interest rates, the US dollar and risk appetite influence crypto heavily.
• Bitcoin: most altcoins follow BTC's direction, usually with bigger moves.
• Flows: spot ETF inflows and outflows, stablecoin supply and exchange balances.
• Supply events: halvings, token unlocks and burns.
• Regulation and news: approvals, enforcement actions, hacks and listings.
• Leverage: crowded positions and high funding rates can trigger liquidation cascades.

Popular crypto trading strategies

Trend following buys strength above rising moving averages. Breakout trading enters when price leaves a range on high volume. Range trading buys support and sells resistance in sideways markets. Dollar-cost averaging (DCA) buys a fixed amount on a schedule and suits long-term accumulation. Full rules are in our trading strategies guide.

Crypto trading fees and costs

Costs add up faster than most beginners expect: trading fees (often 0.1% or less per side on major exchanges), spreads, network fees for withdrawals, funding on perpetuals, and slippage on thin coins. A strategy that trades 10 times a day pays fees on 20 order fills. Factor them into your backtests.

Step-by-step: your first crypto trade

1. Open an account with a regulated exchange and enable app-based 2FA.
2. Deposit a small amount of fiat you can afford to lose.
3. Pick a liquid pair like BTC/USD or ETH/USD.
4. Mark support and resistance on the 4-hour and daily charts.
5. Decide your entry, stop loss and target, then size the trade with the position size calculator.
6. Place a limit entry and a stop loss immediately after it fills.
7. Record the trade in your journal, win or lose.

Taxes on crypto trading

In most countries, selling, swapping or spending crypto is a taxable event. The UK (HMRC), the US (IRS) and most EU countries treat crypto gains as taxable, and record-keeping rules are getting stricter. Keep a record of every trade, including date, price in fiat and fees, and check the rules where you live.

Frequently asked questions

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