New to the world of crypto? Many people have started trading crypto in recent years, and it is easy to see why, but it can be daunting and confusing for a beginner. Therefore, it is helpful to be aware of a few core concepts that should be mastered before placing your first crypto trade. Keep reading for all you need to know before you start committing your own capital.
Wallets, Keys, & Custody Choices
First, it is helpful to understand how crypto is owned and stored. Essentially, investors control crypto with a private key, which allows them to decide what to do with the digital asset. Crypto can be stored in a hot wallet (connected to the internet) or in cold storage, which is an offline wallet that offers greater security as it is not connected online. Investors can also use lengthy recovery phrases that act as a backup.
Markets, Pairs, & Order Types
Trading cryptocurrency takes place in markets that are made up of trading pairs, such as ETH/GBP. It is important to be aware of the difference between market orders (executed instantly at the best available price) and limit orders (only filled at your chosen price). A crypto trading course is a great way to benefit from structured learning and practice before risking your own real funds.
Risk Management First
Risk management is a key consideration with any type of investing, but particularly in cryptocurrency, which is notorious for its volatility. This begins with position sizing, which involves deciding how much of your capital to risk on one trade – many cap this at no more than 2%. Stop losses are another consideration, which automatically exit a trade on your behalf if the price moves against you. You can also set rules around maximum drawdown, which can protect your account from major losses during periods of volatility.
Fees, Funding, & Taxes
Exchanges charge fees for trading and spreads, which can add up for regular traders. It is also vital that UK traders keep accurate records of all trades, as crypto can be subject to Capital Gains Tax.
Security Habits That Stick
Finally, security needs to be a top priority from day one with cybercrime on the rise. This should involve enabling two-factor authentication (2FA) for another layer of security on accounts, as well as being wary of unsolicited messages and attachments, and keeping your devices and software up to date at all times.
If you are thinking about getting started with crypto trading in 2026, the information in this post should be useful and make it less daunting. Trading crypto can be an exciting and potentially lucrative venture with many investors now dedicating a percentage of their portfolios to crypto, but you need to have a firm understanding of what you are getting involved in and best practices to help you get started.
