# Trading Cryptocurrency
Cryptocurrency trading is the process of buying and selling digital currencies, such as Bitcoin or Ethereum, in order to make a profit. Traders may also use other instruments such as derivatives, futures contracts and options to speculate on the future price movements in the crypto market. It is important for traders to have an understanding of how cryptocurrency works before engaging in trading activities.
## Setting up Your Exchange Account
Before you can start trading cryptocurrencies, it is necessary to open an account with a cryptocurrency exchange. Exchanges are online platforms that allow users to buy, sell and trade digital assets like Bitcoin or Ethereum. Depending on your country of residence there may be different exchanges available to you; some countries may not even have any exchanges at all due to regulatory reasons. When selecting a platform it’s important that you choose one which has been well established (preferably over 3 years) so that your funds are safe from theft or fraud.
It’s also advisable that you research into each platform thoroughly by reading user reviews and checking out their customer service capabilities before committing yourself financially long-term with any particular exchange. Once selected create your account by providing personal information including name, email address, telephone number etc., verify these details using documents provided where applicable then set up two-factor authentication for added security – this will help protect against unauthorized access should someone try hacking into your profile through password guessing attempts etc..
## Selecting Your Coins & Setting Up Trades
The next step involved involves selecting which coins/cryptocurrencies you wish to invest in and setting up trades accordingly – this part requires more knowledge than others since different coins come with varying levels of risk depending on factors such as liquidity (how easily they can be exchanged), volatility (price fluctuations) and potential returns etc.. As such it’s recommended that beginners only trade those tokens which are relatively stable while regularly researching into new projects themselves when considering adding them into their portfolio at later stages once they become more comfortable with the process itself.
## Placing Orders & Making Profits
Once chosen takes not just placing orders but timing them correctly too so ensure that positions opened align with technical indicators showing favourable trends towards profitable exits – most experienced traders employ various strategies here ranging from scalping (opening/closing many positions within minutes/seconds) all the way through day-trading (holding onto position for hours/days). Whatever strategy used always remember take profits when targets hit rather sticking around hoping further gains without exposing capital additional risks should markets begin going southwards again shortly after entry points passed – this practice known “letting winners run” helps minimise losses while maximising returns overall!