How To Trade Cryptocurrency To Make Profit?

As for potential earnings, the sky's the limit for the most skilled and disciplined day traders. However, precise figures are challenging to obtain due to the opaque nature of the crypto trading world. The Binance Futures Leaderboard provides a glimpse into the upper echelons of crypto futures trading profits:

Binance Futures Leaderboard

While these top traders undoubtedly rake in millions, it's crucial to remember that they represent the crème de la crème - the absolute elite of the trading world. For the average day trader, consistent profitability is an immense challenge.

According to Forbes, only 5% of crypto traders in the UK realized a profit, which aligns with Cointelegraph’s findings that 95% of Bitcoin traders lose money and fail. So, if the statistics are so skewed in favor or losing, why do so many people insist on trading?

In my personal opinion, and from what I’ve seen in my experience, it’s because everybody thinks they will be in that 5% that actually profits. Everybody feels they will be the exception. The reality is, the 5% will likely be occupied by traders who have been trading for the last 10 or 20 years. If that’s not you, statistically speaking, your chances of losing money are much higher than your chances of making profits.

Relevant and insightful information on how to trade crypto for beginners can be found in our article How To Trade Crypto With $100?

Regarding salaries, data from Glassdoor suggests that the average annual salary for a crypto trader in the United States ranges from $72,000 to $129,000, with the average being around $96,000.

In terms of overall salary averages (not just in the United States), the average is around $77,000 according to CryptoJobsList.

What is the salary of a cryptocurrency career?

However, it's important to note that these figures can vary significantly based on factors such as location, company size, and the trader's experience and track record.

Quantifying the potential profits for long-term investors is a tricky endeavor, as it heavily depends on the specific cryptocurrencies held, the entry and exit points, and the overall market conditions. However, historical data provides some insights:

• Bitcoin: If you had invested $1,000 in Bitcoin in July 2010, your investment would be worth over $200 million today (as of March 2024)

• Ethereum: A $1,000 investment in Ethereum's ICO in 2014 would be worth approximately $60 million at today's prices

Of course, these are exceptional cases, and not every crypto investment will yield such astronomical returns. However, they do highlight the immense wealth-generation potential for patient and disciplined long-term investors.

Even over the course of one bull market, the gains can be life-changing. That is how I personally prefer to play in the crypto markets. My approach is - I invest during a bear market, and sell during a bull market. In the previous cycle, I managed to make a 6x on my assets by investing in 2019 and selling throughout 2021 and 2022. It’s not something that made me a millionaire, but a 6x on your investment every few years is a pretty good deal in my book.

Is it too late to invest in bitcoin today? Our forecast will help you get valuable information to answer this question: Bitcoin Price Prediction 2024, 2025, 2030 - Will BTC Go Up?

The profitability of copy trading depends largely on the performance of the traders being copied and the associated fees. While some copy trading platforms advertise potential returns of up to 30% annually, these figures should be viewed with caution, as past performance is no guarantee of future success.

It's crucial to thoroughly research and vet any traders or platforms you intend to copy, as well as to exercise prudent risk management practices. Personally, I don’t have a lot of experience with copy trading myself. It’s a good concept, one that I’m sure can work if the right trader to copy is chosen. My only concern would be - if you are not experienced enough to trade by yourself, what makes you experienced enough to be able to pick the right trader to copy? I don’t have an answer to this.

For example:

• Staking on major proof-of-stake networks like Ethereum, Solana, or Cardano can yield annual returns ranging from 5% to 15%, depending on the network and the amount staked

• Yield farming can offer higher potential returns but also carries greater risks. By providing liquidity to decentralized finance (DeFi) protocols and constantly moving capital between different yield opportunities, some yield farmers have reported annual percentage yields (APYs) in the triple digits. However, these high yields often come with significant risks, including smart contract vulnerabilities, impermanent loss, and potential rug pulls

In my view, yield farming and staking can be viable options for those seeking alternative income streams within the crypto space, but it's vital to thoroughly understand the mechanisms of how these methods work, the associated risks and exercise caution.

Another piece of advice I would give is - never purchase coins just because their yield farming APY (annual percentage yield) is high. If you wouldn’t invest in a coin otherwise, don’t do it just so you can use it for yield farming. Extremely high APY is usually only available for highly risky coins, and even those high yields won’t cover the losses you will have if the coin drastically loses in value.

Let’s look at it in an example. Say you buy a coin that’s worth $100 because it gives 300% APY, and you start yield farming. If the coin drops in price by 90% in a year, yes, you will have 3 coins instead of 1, but each of those will be worth only $10, bringing your total net value from $100 to $30. So, the bottom line is - only purchase cryptocurrencies you would invest in anyway, even without yield farming, and then treat yield farming as a nice bonus on top.

For those who are determined to do this, here are some tips to increase your chances of success:

1. Develop a Well-Defined Trading Strategy: Successful traders have a clear, rules-based approach that aligns with their risk tolerance and investment objectives

2. Master Risk Management: Proper risk management is the cornerstone of longevity in trading. Implement strict position sizing, stop-loss orders, and portfolio heat limits

3. Cultivate Emotional Discipline: Trading is as much a psychological battle as it is a financial one. Develop the ability to detach from emotions like fear, greed, and overconfidence

4. Continuously Learn and Adapt: Markets are dynamic, and successful traders must be willing to constantly evolve their strategies and adapt to changing market conditions

5. Treat Trading as a Business: Approach crypto trading with the same dedication, professionalism, and commitment as you would any other business endeavor.

For a more in-depth exploration of this topic, check out our article: 5 Steps To Start Investing In Cryptocurrencies.