As cryptocurrency trading such as Bitcoin and Ethereum becomes increasingly popular, many people are also asking the question: what is Crypto Trader? In answering this question, we also get to talk about how much you can earn as a trader with crypto trading. We will also show what things you should pay attention to when doing crypto trading.

A trader makes money by taking advantage of price movements on the stock market. In doing so, trading usually takes place on a short-term basis. Thus, it is possible that a position is closed after only a few moments. On the other hand, there are also situations in which one lets a trade run for several days. On the other hand, if you plan to let the positions run longer, you are not trading, but investing.

Crypto Trader what is it: when trading cryptocurrencies, you proceed in the same way as when you trade the DAX or currency pairs such as the Euro / US Dollar (EUR / USD). However, crypto coins are characterized by the fact that the price fluctuations are often more violent than one is used to from other financial instruments.

As a trader, you can use either fundamental analysis or technical analysis. Examples of fundamental data are in particular:

• Decisions of central banks "for example, lowering of the prime rate".
• Political events "for example elections"
• Positive or negative news that specifically affects individual cryptocurrencies "for example, new applications of the Ethereum Blockchain"

In general, the following applies here: The more long-term you trade, the more important fundamental analysis becomes. As a crypto trader, on the other hand, you will primarily focus on technical analysis. Technical analysis consists of chart analysis and the use of indicators in particular. For the analysis of the charts, one can use the various sign tools that are available to one in a trading platform. These are in particular trend lines, trend channels, Fibonacci lines as well as resistances and supports. In addition, it is important to look closely at the candles and chart patterns. Because you can often recognize upcoming changes in the price in this way.

Crypto Trader what is it: Furthermore, it makes sense to also rely on technical indicators when crypto trading. Thus, one can use them very well to get signals for entries and exits. Moreover, they help one to understand the market better. Popular indicators in this regard are the moving averages. A simple example is the 200-day line: this indicator calculates the average price of the previous 200 days. For example, if bitcoin is trading above this line, many traders will assume that there is currently an uptrend. In contrast, according to this view, a downtrend occurs when the cryptocurrency falls below the 200-day line.

As a trader, you therefore have to be patient and wait for good signals to make trades. Especially beginners often find this difficult and are tempted to take positions that are not part of their strategy. With increasing experience, however, you will usually learn to control yourself better. As a result, your own performance will also increase.

AdvisorWhat is Crypto Trader: As announced at the beginning, we also address the question of how much money you can actually earn with crypto trading. So you should not have the idea that with a trading capital of € 1,000 you can also earn € 1,000 per month. This is possible - especially when trading cryptocurrencies - but unfortunately not the rule. As an experienced trader, on the other hand, you will definitely manage to earn the aforementioned sum with a trading capital of €5,000 or €10,000. As a beginner, on the other hand, you should focus less on returns. Rather, it is important to familiarize yourself with the basics of trading and find a good strategy for crypto trading. For this purpose, one can also access already existing strategies from other traders. In addition, you should take the necessary time to familiarize yourself with chart analysis. In general, it is important to gain as much experience as possible when trading.