7 Tips to Become a Crypto Trader in 2023

Cryptocurrency has become a global phenomenon, and as we enter 2023, the allure of becoming a successful crypto trader is stronger than ever. With the right knowledge and approach, anyone can dive into the world of digital assets and potentially reap significant rewards. 

That doesn’t mean that anyone who starts trading crypto will magically become profitable – far from it, actually. The reality is that not all crypto traders make money trading digital assets for various reasons. In order to become a successful crypto trader, you need to be educated, stick to a good strategy, learn from mistakes, don’t get emotionally attached to your decisions, and more.

In this comprehensive guide, we will explore the 7 tips to kickstart your crypto trading journey that will hopefully set you on the path to success. Whether you’re a novice or an experienced trader, these tips will help you navigate the dynamic crypto landscape with confidence.

7 tips to become a crypto trader in 2023

In the sections that follow, we are going to outline several tips that will hopefully set you up for success in crypto trading. Keep in mind that this is a subjective list, and what works best for you might not work for someone else. Still, we believe that these tips should benefit almost everyone looking to become a crypto trader in 2023.

Tip 1: Educate yourself continuously

The cryptocurrency market is constantly evolving, and staying informed is paramount, especially when starting out. Follow crypto news outlets, social media channels, and prominent individuals in the crypto community, read books, join online forums, and attend webinars to gain a deep understanding of blockchain technology, market trends, and different cryptocurrencies. Remember, knowledge is your most valuable asset in the crypto world. 

You can check CoinCodex’s News section for up-to-date information on the latest crypto developments and to find out about the latest trends in the blockchain space. If you want news tailored to a specific coin, you can also check our Bitcoin news section and similar sections for other coins and tokens.

Tip 2: Start small and diversify

When you’re just starting as a crypto trader, resist the urge to invest all your capital in a single asset. Begin with a small investment and gradually diversify your portfolio. Diversification helps spread risk and ensures that potential losses won’t devastate your finances.

You can easily keep track of your crypto investments with a crypto portfolio, which allows you to enter information on more than 25,000 different coins and tokens.

CoinCodex’s crypto portfolio dashboard.

Tip 3: Choose the right trading platform

Selecting a reliable cryptocurrency exchange is crucial. Ensure the platform has robust security measures, low fees, a user-friendly interface, and supports the cryptocurrencies you want to trade. Popular exchanges like Binance, KuCoin, and Kraken are good options for beginners.

For a complete list of the best centralized exchanges (CEXs) and decentralized exchanges (DEXs), check our head-to-head comparison of the best cryptocurrency exchanges.

Tip 4: Practice safe storage

Protect your crypto assets with secure wallets. Hardware wallets, like Ledger or Trezor, offer excellent offline storage options. Be wary of phishing scams, never share your private keys with anyone, and be extra cautious about opening suspicious links on the internet.

While having your digital assets deposited on crypto exchanges is not that risky, it’s still far better to take your assets’ custody into your own hands and use hardware wallets to protect your portfolio. However, it is worth noting that if you plan to trade with high frequency, then you should consider leaving at least a portfolio of your crypto funds on the exchange to avoid paying transfer fees.

Tip 5: Develop a trading strategy

Successful crypto traders have a well-defined strategy. Decide whether you’ll be a day trader, swing trader, or a long-term investor. Set clear entry and exit points, risk management rules, and stick to your plan. Emotions can lead to impulsive decisions, so discipline is key.

While not best for beginners, you might consider employing crypto-scalping strategies if you know what you are doing. Otherwise, we would advise you to start with a simple buy-and-hold strategy, and invest your money into cryptocurrencies that are good long-term investments.

Tip 6: Stay informed about regulations

Cryptocurrency regulations are evolving worldwide. Keep track of the legal framework in your country to ensure compliance. Knowing the rules and tax implications will prevent any legal issues down the road.

One of the most important developments on the crypto legal front is the Securities and Exchange Commission’s (SEC) stance against crypto projects – as of September 2023, 68 crypto coins and tokens are considered as securities by the regulator. This has large implications for crypto prices, and any new investor should keep a watchful eye on the latest developments. For example, when Ripple won a partial victory in the case against the SEC earlier this year, XRP shot up 100% in a single day, showcasing the effect of regulatory changes on the crypto landscape.

Tip 7: Learn from mistakes

Mistakes are part of the learning process in crypto trading. Don’t be discouraged by losses; instead, view them as opportunities to refine your strategy. You can keep a trading journal to track your decisions and their outcomes, allowing you to learn and improve over time.

Crypto trader FAQs

How to become a crypto trader?

In order to become a crypto trader you need to learn about cryptocurrency, choose a trading platform, practice trading strategies, manage risks, and more. For a more detailed explanation of how to get started, check our comprehensive guide on how to invest in cryptocurrency.

How to trade crypto?

There are two main ways to trade crypto:

• Spot trading: This is the most common way to trade crypto. You buy and sell crypto at the current market price.
• Margin trading: This allows you to borrow money from a broker to trade crypto. This can magnify your profits, but it also increases your risk.

To trade crypto, you will need to open an account with a crypto trading platform. Once you have an account, you can deposit funds and start trading.

How to day trade crypto?

Day trading is a short-term trading strategy where you buy and sell crypto within a single day. This is a high-risk strategy, but it can also be profitable if you are successful.

To day trade crypto, you will need to be able to make quick decisions and react to market changes. You will also need to have a good understanding of technical analysis and pick cryptocurrencies that are best for day trading.

How to trade crypto options?

Crypto options are a type of derivative that gives you the right, but not the obligation, to buy or sell crypto at a predetermined price on a specific date. This can be a way to hedge your bets or to speculate on the future price of crypto.

To trade crypto options, you will need to open an account with a crypto trading platform that offers options trading. Once you have an account, you can buy or sell options contracts. If you don’t know which to choose, check our selection of the best crypto options exchanges.

Who is the best crypto trader?

There is no definitive answer to this question. There are many successful crypto traders, and it is difficult to compare them. Also, most trading results are private, so it’s impossible to say who is actually the most successful or “best” trader.

The bottom line: Anyone can become a crypto trader, but not everyone can be profitable

Trading crypto is easy enough – you need to open an exchange account, deposit money, and you can start buying and selling crypto in minutes. However, in order to turn a profit, you’ll need to be well-informed, act rationally, develop an investment strategy, and generally do everything in your power to minimize losses. That doesn’t mean you won’t make mistakes. Instead, you should learn to grow from them and not repeat the same ones over and over again. 

The truth is there’s no magic formula or set of rules that you need to follow to become a profitable trader. You’ll need to try out different strategies and approaches and learn what’s best for you. In the meantime, you can check the following video, which demonstrates how you can use various tools on CoinCodex to analyze market sentiment, find potentially lucrative investment opportunities, and more.