Recently, I’ve noticed more and more people around me want to enter the crypto space, but most of them only have a superficial understanding of this market. I want to share some of my basic knowledge from these years with newcomers to the crypto world, hoping to help you avoid some detours.
First, let’s talk about what trading cryptocurrencies is. It’s basically buying low and selling high to profit from the price difference, similar to stock trading or real estate speculation. However, digital currencies have a natural advantage: 24/7 trading without limits on price fluctuations, which is why many people think the opportunities here are much greater than in traditional financial markets.
To start trading cryptocurrencies, you first need to find a reliable exchange. An exchange is a platform for trading digital currencies. Top-ranked exchanges tend to be safer and more liquid. Each exchange has its own ecosystem; some coins can only be bought on specific exchanges.
Next, you need to understand what USDT is. This is a must-know concept for beginners in crypto. USDT stands for Tether, which is essentially a digital version of the US dollar, with 1 USDT equal to 1 USD. Exchanges cannot directly sell you USDT; you need to first exchange RMB for USDT, then use USDT to buy the cryptocurrencies you want. This process is called crypto-to-crypto trading.
Then, here are some basic terms that are very important for newcomers. For example, “position” refers to the proportion of your funds invested. Full position means investing all your money into coins, which is very risky. There are also concepts like take profit and stop loss—setting target points for profit or loss, and selling once reached. A bull market is when prices keep rising, a bear market is when prices keep falling. Going long means buying with the expectation of rising prices, going short means selling with the expectation of falling prices. You need to understand these terms thoroughly, or you might get confused when watching the market.
Mainstream coins usually refer to Bitcoin and Ethereum, which have the largest market caps and highest recognition. There are also other coins that rank high; these coins generally have good liquidity and lower risk. Conversely, small-cap coins with very low market caps may have large gains but also come with exponentially higher risks.
Regarding risks, I have to be honest. Ethereum’s creator, Vitalik Buterin, once said something very insightful: “Never invest any money you cannot afford to lose.” I want to emphasize this again—never borrow money, take out loans, or use credit cards to trade crypto. Especially for beginners, avoid jumping straight into derivatives trading.
Futures trading (contracts) is different from spot trading. Contracts are a form of futures trading that can use leverage. You can use a small amount of margin to control a larger position—for example, 1% margin can give you 100x leverage. It sounds tempting, but the risk is also amplified 100 times. Beginners should definitely avoid futures contracts; this is not a quick way to get rich but a fast track to liquidation.
If you really want to start in crypto, I suggest preparing three things. First, an Android phone for easy access to various apps. Second, some idle funds—money you don’t need urgently—so that even if you lose it, it won’t affect your life. Third, a good mindset—don’t be anxious or overly greedy, and don’t let market emotions control you.
There are many ways to make money in crypto; trading isn’t the only option. Some people mine, some participate in ecosystem development, and some hold long-term. The key is to find a method that suits you. I hope we can all gain something in this market.
