Free guide
Crypto trading basics, risk management and a real trading plan
Most new traders lose money for the same few reasons: no plan, positions that are too big, and no record of what worked. This guide covers the basics you need, the risk rules that keep you in the game, and a step-by-step plan you can follow.
01
Crypto basics
Crypto trading means buying and selling digital coins like Bitcoin and Ethereum, hoping to profit from price changes. Prices trade 24/7 and move fast. A 5% move in a day is normal for Bitcoin, and smaller coins can move far more. That's the opportunity, and the danger.
Exchange
Where you buy and sell, like Coinbase or Kraken. You deposit dollars and trade them for coins.
Wallet
Where coins are stored. A hardware wallet keeps them offline under your control.
Spot trading
Buying the actual coin. The most you can lose is what you put in. Start here.
Leverage
Borrowing to trade bigger. Gains and losses are multiplied, and you can be wiped out fast. Avoid it while learning.
Market order
Buys right now at the best available price. Fast, but you may pay a little more than you expected.
Limit order
Buys only at your price or better. You control the price, but it may not fill.
Stop-loss
Your exit if the trade goes wrong. Decide it before you enter, never after.
Fees & spread
Every trade costs something. Small, frequent trades can lose money to fees alone.
See live prices, 24-hour moves and 7-day charts for the top coins on Markets.
02
Prediction markets
Prediction markets let you trade on real-world events: elections, interest rates, sports, crypto prices. Each market is a yes/no question. A share pays $1 if you're right and $0 if you're wrong.
The price is the crowd's probability. A YES share at 62¢ means the market thinks there's about a 62% chance it happens. You only have an edge if you believe the real chance is meaningfully different from the price.
Example
YES trades at 40¢. You think the true chance is 55%. Your edge is 55% − 40% = 15 points. If you're right on average, each 40¢ share is worth 55¢ to you. If your 55% is just a hunch, you have no edge at all, only a bet.
The odds & edge calculator does this math for you, and Markets shows live odds for the most active prediction markets.
03
Risk management
You can be wrong half the time and still make money, as long as your losses are small and your wins are bigger. Risk management is what makes that true. Three rules matter most.
1. Risk a small, fixed share of your account per trade
A common guideline is to risk 1–2% of your account on any single trade. "Risk" means what you lose if your stop is hit, not the size of the position. With 1% risk, ten losses in a row still leave you with about 90% of your money.
Position size = money at risk ÷ distance to your stop
Account $5,000 × 1% = $50 at risk. You buy at $100 with a stop at $95, so you risk $5 per coin. $50 ÷ $5 = 10 coins, a $1,000 position. If the stop hits, you lose $50, exactly as planned.
2. Only take trades where the win is bigger than the loss
Reward-to-risk compares your target with your stop. The better it is, the less often you need to be right just to break even (before fees):
| Reward : risk | Win rate to break even |
|---|---|
| 1 : 1 | 50% |
| 2 : 1 | 33% |
| 3 : 1 | 25% |
3. Protect against big drawdowns
Losses are harder to recover from than they look. The deeper the hole, the bigger the gain you need to climb out:
| If you lose | You need to gain |
|---|---|
| −10% | +11% |
| −25% | +33% |
| −50% | +100% |
| −75% | +300% |
Also watch your total exposure. Five open trades in coins that all move with Bitcoin are really one big bet. The Risk Dashboard shows your exposure and drawdown across all open trades.
04
Your trading plan, step by step
A trading plan is a checklist you follow every time, so emotion doesn't make the decisions. Here's a simple one, and the EdgeLab tool for each step.
1.Scan · Markets & Signals
Find what's moving. Star coins and markets you want to follow, and check RSI, MACD and trend before you get attached to an idea.
2.Form a view · Thesis Checker
Write down what you expect and why. The AI checks it against live prices and odds and tells you what would prove you wrong.
3.Size it · Calculators
Pick your stop first, then let the position size calculator tell you how much to buy so a loss costs only what you planned.
4.Stress-test · AI Analyzer
Run the full setup: entry, stop, target and size. You get a score, the biggest risks and concrete fixes before any money moves.
5.Wait for your price · Alerts
Set an alert at your entry and stop levels instead of watching charts all day.
6.Log it · Journal
Record every trade, win or lose, with your reason for taking it.
7.Review · Analytics & Risk Dashboard
See your total exposure, drawdown and which setups actually make money. Cut what doesn't work.
8.Improve the rules · Backtester
Test a rule on up to 5 years of real prices before trusting it with real money.
Markets, Calculators and the Journal are free. Free accounts also get one AI check a day. The full plan, with unlimited AI, Signals, Alerts, Analytics, the Risk Dashboard and the Backtester, is part of EdgeLab Pro.
05
Common mistakes to avoid
- No stop-loss. Hoping a losing trade comes back is how small losses become big ones.
- Sizing by feel. Betting more because you're "sure" is the fastest way to a big drawdown. Use the formula every time.
- Chasing pumps. By the time a coin is trending everywhere, much of the move is often gone.
- Revenge trading. Trying to win back a loss right away leads to rushed, oversized trades. Step away.
- Leverage too early. It turns normal price swings into account-ending losses.
- Not keeping a record. Without a journal you can't tell skill from luck, or fix what's going wrong.
Put the plan to work
Create a free account to use the calculators, journal and one AI trade check a day. When you're ready to trade, see where to open an account.
This guide is for education only and isn't financial advice. Crypto and prediction markets are risky, and you can lose all the money you put in. Only trade what you can afford to lose.