Trading Fundamentals
Learn the mechanics of trading cryptocurrencies, from order types to risk control. Master these before applying advanced strategies.
Market types
| Market | What it is | Key risks | Best for beginners? |
|---|---|---|---|
| Spot | Buy/sell the asset itself and hold in a wallet or on exchange. | Volatility, custody security. | Yes — start here. |
| Margin | Borrow funds to amplify trades. | Liquidation if price moves against you; interest costs. | No — requires strict risk controls. |
| Perpetual futures | Derivatives that track asset price with funding payments. | High leverage, funding fees, complex risk. | No — learn extensively first. |
| Options | Contracts giving right (not obligation) to buy/sell later. | Premium decay, complex strategies. | No — advanced only. |
Order types
- Market order: Fills immediately at best available price. Use sparingly; can suffer slippage.
- Limit order: Sets a price. Fills only if market trades there or better. Preferred for controlled entries/exits.
- Stop order: Triggers a market/limit order when price crosses a level. Use for risk management.
- OCO (One-Cancels-Other): Combines take-profit and stop-loss. When one executes, the other cancels.
Practice entering and canceling each order type in a demo environment before using real funds.
Position sizing
- Risk no more than 1–2% of account equity per trade while learning.
- Calculate position size = (Account × Risk %) ÷ (Entry − Stop distance).
- Always plan the exit before entering: entry, stop, target.
Example: Account $2,000, willing to risk 1% ($20). If stop is $100 away from entry, position size = $20 ÷ $100 = 0.2 units.
Risk controls
- Use stop-loss orders and honor them — no moving stops further away.
- Track daily loss limits. If you hit it, pause for the day.
- Reduce size around major news events or when volatility spikes sharply.
- Keep a trade journal with screenshots, reasoning, emotions, and lessons learned.
Never average down without a pre-defined plan. Doubling exposure in hope rarely ends well.
Practice routine
- Open a demo or sandbox account. Many exchanges offer paper trading.
- Simulate at least 30 trades using the same rules you plan to apply live.
- Review metrics weekly: win rate, average gain/loss, maximum drawdown.
- Only move to live trading after consistent positive expectancy and emotional stability.
- Start live with the smallest position size your exchange allows.
Mindset pillars
- Patience: Wait for setups that match your plan.
- Discipline: Follow risk rules even when tempted not to.
- Review: Spend as much time reviewing trades as taking them.
- Continuous learning: Markets evolve. Revisit these guides regularly.
Next steps
- Read the Tools & Data Guide to see how this platform supports your analysis. Open guide
- Create a risk statement using the Risk & Planning guide. Open guide
- Keep the Glossary open while exploring new features. Glossary