Cryptocurrency has seen a huge surge in popularity in recent years, with the first big boom in 2017, followed by a renewed wave of interest starting in 2020. Anyone who has looked into cryptocurrency has heard of those lucky people that made millions from their investments in crypto years ago. Buying and holding crypto for the long-term is one way of making money, but others are looking for a quicker way - through trading crypto.
What is crypto trading?
If you're new to cryptocurrency, you may not know exactly what the difference between buying, selling, investing, and trading is. I'll clarify that for you here in a simple way.
Buying cryptocurrency is exactly as it sounds, you are spending your fiat currency (Australian dollars) to purchase cryptocurrency (eg: Bitcoin).
Selling crypto is exchanging your crypto (eg: Bitcoin) for Australian dollars.
When people talk about investing in crypto, they generally refer to the act of buying crypto and holding it for a long time (months to years), until the price of their crypto has increased. For example, if you bought $1000 worth of Bitcoin in 2018 when it was worth $10,000 per BTC, then sold it in 2021 when price of Bitcoin was $80,000, you would have made 8x your initial investment. Your $1000 is now worth $8000.
Crypto trading is when you frequently buy and sell cryptocurrency as the price fluctuates, to make profits from market volatility. For example, you may buy $10,000 worth of Bitcoin when it is worth $50,000, then sell all your Bitcoin when the price of BTC reaches $55,000 a few weeks later. You have made a 10% profit (or $1000) in a few weeks. If the price of BTC drops again, you may choose to buy some again, with the plan of selling it when its value hopefully rises again.
Can I make money trading crypto?
Yes, you can make money trading crypto, but it is very difficult, and also risky. There are definitely people that make huge profits trading cryptocurrency, but the number of people that end up losing money will outweigh those that are successful. Successful crypto traders tend to have experience in trading other financial markets, such as stocks and forex. They have a deep understanding of how to use various indicators and tools, while conducting technical analysis on charts. If you are new to trading, and especially if you are also new to cryptocurrency, I would steer clear of crypto trading. That doesn't mean you can't invest in crypto, and still make money in the long term. A safer option for newcomers is to buy and hold crypto for the long-term, and even stake your crypto to earn interest which will compound over the years. If you are interested in that, take a look at our list of best crypto exchanges for Australians.
Where should I trade cryptocurrency in Australia?
If you are confident in your trading skills, and you have decided you want to try trading crypto, the next thing is to decide where you should trade. These are our top 3 recommendations for Australian crypto traders. Scroll down to read a brief description of each one, to see which one fulfils your trading needs.
Best Crypto Trading Platforms in Australia
- Over 280+ different cryptocurrencies
- Demo mode: practise trading risk-free
- Easy to use, perfect for newcomers to trading
- Over 280+ different cryptocurrencies
- Live Chat support if you need assistance
- Low trading fees of 0.5%, with tight spreads
Low Fees & Spread
- Over 300+ different cryptocurrencies
- Low fees of just 0.1% which can be discounted
- Advanced markets: futures and margin trading
Best For Serious Traders
Swyftx - Best Crypto Trading Platform
Swyftx is the best crypto trading exchange for Australians, with over 280+ different cryptocurrencies, Live Chat customer support, 0.6% trading fees, and the unique Demo mode which isn't found on any other Aussie platform. With the Demo mode activated (easily toggled with a button), you have $10,000 of virtual money that you can use to practise trading. You can make trades based on the actual real-time prices of cryptocurrency, so you can implement a strategy and see what works before you invest your real money. To learn about the full range of features, see our detailed review of Swyftx.
Digital Surge - Low Fees & Spread
Digital Surge is another excellent option for Australian crypto traders. It has a simple interface that makes it easy to navigate, and is great for new traders. Digital Surge offers more than 280+ different cryptocurrencies, and has low trading fees of 0.5%, with tight spreads. This real-world test by top review site Marketplace Fairness shows Digital Surge has the lowest combined fees and spreads. If you run into any issues, you can easily get a hold of customer support via Live Chat or email, which I have tested out to be super responsive and helpful. To find out more about what makes Digital Surge an excellent trading platform, read our full review of Digital Surge.
Binance - Best for Serious Traders
Binance Australia is the best choice for serious crypto traders. If you have extensive experience trading other financial markets, you will find yourself at home on Binance. Not only can you access over 300+ different coins through spot trading, you can also find additional markets such as futures and margin trading. The fees on Binance are just 0.1%, which can be reduced by 25% just by paying the fees using their native token BNB. This means your fees end up being just 0.075%. However, if you are not familiar with trading, I would suggest choosing one of the other two options, either Swyftx or Digital Surge. Binance can be intimidating for new users, and the lack of customer support means you are on your own. To read about the entire range of features found on Binance, read our Binance Australia review.
Top Tips for Crypto Trading in Australia
Once you have opened your crypto trading platform account, it is time to start trading. This can be both exciting and daunting, so I've come up with a few tips to help you start on your journey, and hopefully make some decent profits. If you are an experienced stock trader or you have an extensive background in forex, you are off to a good start. However, it is still important to remember that the crypto market behaves very differently to other markets, so start small and take heed of these useful tips.
#1. Trade Liquid Cryptocurrencies
Especially when you are first starting out, you want to make sure you focus on the more liquid cryptocurrencies. These are usually the most popular coins, such as BTC, ETH, BNB, SOL and ADA. An easy way to check liquidity is to visit CoinMarketCap and sort by 24hr Trade Volume. With high liquidity, it makes it easy to fulfil your buy and sell orders, which is important when you are trading in the short term.
#2. Buy Crypto When It's Trending Up
As a short-term trader, you want to ride the waves and take advantage of bull runs. When a coin you are watching is trending up, it is a good time to buy. Other traders and investors are seeing the coin increase in value, and also jumping on board, due to FOMO. If you are early enough to get on board, you can ride the price increase, and then sell it after you are happy with the gains, or if you see the price starting to trend back down.
#3. Set Limits for Profits and Losses
Everyone wants to sell at the very peak of a bull run, but it is impossible to know when that is. A better strategy for trading is to set a limit of how much you want to profit on a particular trade, and stick to it. For example, maybe you want to make a 10% profit on your trade, or maybe you want to sell when the value of the coin reaches a particular price. Either way, be disciplined and stick to it, otherwise you can end up losing all those unrealised profits, if the price starts plummeting downwards. The same goes with losses - no one wants to lose money, and there is the temptation to hold onto a coin in the hope it reaches the initial price you bought it at, so you break even. However, if you have made a poor choice, and the price is continuing to drop, it is much wiser to exit your position and recover the remaining amount of money, rather than losing it all. Set yourself a limit, for example, to sell if you lose 10% of the initial investment.
#4. Stay in Control of Your Emotions
This tip is closely linked to tip #3. Because cryptocurrency is so volatile, you may experience huge gains and losses in a short amount of time. Don't let greed, fear and anger control how you make your trading decisions. If you can remain disciplined and stick to tip #3, you will have an easier time dealing with your emotions, and not making rash decisions. If you are suffering from a big loss, do not try to recoup that by taking a bigger risk on your next trade. Instead, it may be a good idea to take some time away from trading, step away from the computer or phone, and do something relaxing instead.
#5. Manage Your Risk
Cryptocurrency trading is a very risky activity, so you need to take extreme caution when you do so. Set boundaries on how much you are willing to invest in crypto trading, and if you lose it all, do not use more money to try and make it back. Never invest the whole amount you are willing to trade in one coin, no matter how sure you think you are of the outcome. Crypto markets are extremely volatile, and there is no way you can predict exactly what will happen. Invest a small portion each time you make a trade, and stick to tip #3, remembering to sell and minimise your loss if it was a bad choice. There is no need to make a poor decision turn into a devastating situation.
Final Words of Advice for Crypto Trading
Remember that trading cryptocurrencies is high-risk, and you should only attempt it if you have experience. It is not recommended for complete beginners to cryptocurrency. Also, be sure to do your own research, and seek professional financial advice before investing large sums of money.