Cryptocurrency trading has gained a lot of popularity due in part to the incredible rally by the major crypto assets in 2017. The cryptocurrency market is much smaller than the global forex market and has fewer participants, but many forex traders are now interested in trading cryptocurrencies.

Before you start however you should first familiarize yourself with the characteristics of this new asset class, which are quite different from the traditional forex markets. The cryptocurrency market is extremely volatile and has a number of associated risks that a trader must familiarize themselves with before diving into this exciting market.

Although most new cryptocurrency traders hope to make a fortune from their modest trading accounts, the odds are not in their favor. Many cryptocurrency traders end up losing their entire accounts due to factors such as trading blindly, and taking on too much risk. The improper use of leverage also contributes to the large number of losing traders.

Due to the high volatility associated with the cryptocurrency market, traders can make large profits, or they could see their trading accounts totally wiped out in hours. Therefore, before you start trading cryptocurrencies, you should be comfortable with the fact that you could incur losses. It is also essential that you have risk management principles firmly understood and applied at all times.

The High Prevalence Of Inaccurate Information
Given the growing popularity of cryptocurrency trading, there are a lot of people claiming to be experts in this new field, who are spreading a lot of inaccurate information about investing in cryptocurrencies. To become an expert in cryptocurrency trading and investing, as with any other profession, one should spend a significant amount of time studying the industry.

Many so-called experts do not have the requisite expertise needed to qualify as authorities on cryptocurrencies despite marketing themselves as experts. It is your responsibility to research the trustworthy experts who can help you learn how to navigate this volatile asset type.

The Existence Of Scams
The cryptocurrency space has been plagued by numerous scams where unscrupulous people lure investors and traders to buy different coins and invest in bogus initial coin offerings. These often end up plummeting in value, leading to most investors losing their money. This has happened numerous times, and with the lack of adequate regulation and the anonymity of most cryptocurrency transactions, the scam artists often get away with it.

Many new cryptocurrency traders have been lured into such scams by the promises of instant riches only to lose their savings betting on unproven crypto assets. To minimize the risk of being scammed you should trade cryptocurrencies through an established forex broker such as Exness using only well-established cryptocurrencies like bitcoin and etherium.

Technical Analysis Also Applies To Cryptocurrencies
Most forex traders are already familiar with technical analysis, which they use as an integral part of their overall trading strategy. However, many beginner cryptocurrency traders try to make huge profits without conducting their due diligence on the trading opportunities they want to pursue.

Most expert cryptocurrency traders use technical analysis of charts to predict the future price movements of the crypto pairs that they want to trade. You should at least be comfortable doing your own research on the cryptocurrencies you want to trade before deciding to become a full-time cryptocurrency trader.

Trading Can Be Addictive
Many cryptocurrency traders get excited at the idea of making a great deal of money quickly from the comfort of their homes. Indeed, the rush of excitement that most traders get after booking a profitable trade and the ensuing emotional lows that follow their losing trades can be quite addictive.

Given the additional volatility of cryptocurrencies, the chances of addiction could be considered to be higher than when trading the traditional currency markets. To determine whether cryptocurrency trading is a good fit for you, it is important to first gauge the possibility of becoming addicted to your trading activities.

Day-Trading Cryptos Is A High-Stress Occupation
Many new traders are attracted to trading the financial markets because of the allure of making easy money using only their laptops and an internet connection. However, you should understand that day trading cryptocurrencies is a full time occupation characterized by significant stress levels. Watching the massive fluctuations in the value of your cryptocurrency trades due to the high volatility is quite stressful and traders should be well-prepared psychologically to handle such stress.


In summary, this article outlines the major criteria that new traders should use to determine whether cryptocurrency trading is a good fit for them. The different factors outlined above are not exhaustive, which means that the prospective cryptocurrency trader should conduct their own due diligence before deciding to trade digital currencies.