Introduction
Cryptocurrency trading is becoming increasingly popular as more people invest in digital assets like Bitcoin (BTC), Ethereum (ETH), and other altcoins. Unlike stock trading, crypto markets are open 24/7, allowing traders to buy and sell anytime.
If you’re new to crypto trading, this guide will help you understand the basics, including different types of trading, strategies, and risks.
What is Crypto Trading?
Crypto trading means buying and selling digital currencies to make a profit. Similar to the stock market, traders try to buy low and sell high. However, crypto is highly volatile, meaning prices can change quickly.
There are two main ways to trade cryptocurrencies:
- Spot Trading (Buying & Holding Crypto) – Buying crypto and holding it in a wallet for the long term.
- Derivatives Trading (Futures & Options) – Speculating on price movements without owning the actual cryptocurrency.
Let’s explore different crypto trading types in detail.
1. Spot Trading (Buy & Hold Strategy)
Spot trading is the simplest form of crypto trading. It means buying a cryptocurrency at the current market price and holding it in a crypto wallet until the price increases.
Example:
Ravi buys 1 Bitcoin at ₹30,00,000 because he believes its price will go up. After 6 months, Bitcoin’s price rises to ₹40,00,000, and he sells it.
👉 Profit = ₹40,00,000 – ₹30,00,000 = ₹10,00,000 (before transaction fees).
If the price had fallen, Ravi would have had to wait or sell at a loss.
Best for: Beginners and long-term investors.
Risk Level: Low to Medium
2. Intraday Crypto Trading (Short-Term Trading)
Intraday crypto trading is similar to stock market day trading. Traders buy and sell within the same day to take advantage of small price movements. Since the crypto market is open 24/7, traders can trade at any time.
Example:
Priya buys Ethereum (ETH) at ₹2,00,000 in the morning. By evening, the price increases to ₹2,05,000, and she sells.
👉 Profit = ₹2,05,000 – ₹2,00,000 = ₹5,000 (excluding fees).
However, if the price had fallen, she would have had to sell at a loss or wait for a recovery.
Best for: Active traders who can monitor the market.
Risk Level: High
3. Futures & Options (F&O) in Crypto Trading
Crypto futures and options allow traders to speculate on price movements without owning the actual cryptocurrency. This method can result in high profits or losses due to leverage.
Example of Futures Trading:
Amit expects Bitcoin to rise. He buys a Bitcoin futures contract at ₹30,00,000 with 10x leverage. This means he only needs ₹3,00,000 to control ₹30,00,000 worth of Bitcoin.
If Bitcoin moves up to ₹31,00,000, he makes a ₹1,00,000 profit.
However, if Bitcoin falls to ₹29,00,000, he loses ₹1,00,000. If the loss is too big, the broker may liquidate his position, resulting in a total loss of his ₹3,00,000 investment.
Best for: Experienced traders who understand leverage.
Risk Level: Very High
4. Scalping (Quick Small Trades)
Scalping is a high-speed trading strategy where traders buy and sell within minutes or seconds to earn small profits. Since crypto prices change rapidly, scalping can be profitable but requires experience.
Example:
Raj buys 100 XRP at ₹50 and sells them 3 minutes later when the price rises to ₹50.20.
👉 Profit per coin = ₹50.20 – ₹50 = ₹0.20
👉 Total Profit = ₹0.20 × 100 = ₹20
By doing multiple trades in a day, scalpers can accumulate small profits that add up.
Best for: Highly skilled traders with fast decision-making.
Risk Level: Very High
5. Staking & Earning Interest (Passive Income from Crypto)
Staking is a way to earn passive income by holding cryptocurrencies in a wallet. Many platforms pay interest to users who stake their coins.
Example:
Pooja holds 10 Solana (SOL) and stakes them on an exchange that offers 5% annual returns. Over a year, she earns 0.5 SOL as a reward.
This method is less risky than trading and is good for those who want to earn steady income from crypto.
Best for: Long-term investors looking for passive income.
Risk Level: Low
| Feature | Crypto Trading | Stock Market Trading |
|---|---|---|
| Market Hours | 24/7 | 9:15 AM – 3:30 PM (India) |
| Volatility | Very High | Medium |
| Regulation | Less regulated | Highly regulated |
| Leverage | High in F&O | Limited in India |
| Ownership | Can be stored in wallets | Held in Demat accounts |