How to trade crypto coins: a beginner's guide to the steps, the costs and the risks

Trading a coin means swapping one asset for another and hoping to be able to swap back at a better price. It is not saving, and it is not a way to earn a steady income. Most people who trade actively lose money after costs, so read this as a description of how it works, not a promise of what it will do for you. It is general education and not financial advice.

Where you can trade

• A centralised exchange (a company’s app): you deposit money, the company holds your assets, and you trade on its order book. Easier to start, and you depend on the company.
• A decentralised exchange (DEX): you keep your own assets in a wallet and swap against a pool of money on a blockchain. You can reach almost any token, including thousands that are worthless.
• A wallet with swaps built in: the same as a DEX, with the screens in one place. Aretia is of this kind, and also shows live token markets on six networks.

The choosing guide lists ten questions to ask of any of them.

The steps, on a decentralised exchange

1. Set up a wallet and write the recovery phrase on paper. Never type it into a website or share it (why).
2. Get the network’s coin. You need a little SOL for Solana, ETH for Ethereum, BNB for BNB Chain, and so on, to pay the network fee, even if you trade other tokens.
3. Find the token and check it before you swap: liquidity, age, who can change it, whether you can sell (the seven checks).
4. Swap a small amount first. Look at the quote: price, fee, price impact and the minimum you will receive.
5. Confirm in your wallet only after you have read what you are signing.
6. Swap back a small amount to prove the exit works before you commit more.

Costs people miss

• The fee shown and the network fee, which can be higher than the trade on a busy day.
• Price impact: a swap moves the price, more in a small pool (the arithmetic).
• Slippage: the price can change between your quote and your trade. Set a limit so a bad price cancels the trade instead of filling it.
• Taxes: in many countries each swap is a taxable event. Keep records.

The mistakes that cost the most

• Trading money you cannot afford to lose.
• Buying because a price is rising and many people are talking about it.
• Using one huge position instead of small ones.
• Skipping the checks on a new token because it is “early”.
• Trusting someone who contacts you first with a tip, a signal group, or a promise of returns. These are scams more often than not.

To see what the market looks like before you trade anything, Aretia Markets shows price, volume, transactions, traders and liquidity across six networks, with gaps shown as gaps. It does not tell you what to buy.