Starting with cryptocurrency trading is one of the most challenging bits of the process. Some would get overwhelmed when learning the technology behind cryptocurrencies. They are not patient on the learning curve, or they make bad decisions. On the other hand, some investors could not withstand the drastic changes in prices, and they often opt-out. They safeguard their money once investment and trading even out.
If someone wants to get into the cryptocurrency ‘industry’, they make sure to, at least, know the fundamentals. And that is why we created this article, just for you—someone who wants to get into the world of Bitcoins, Ethereum, among other crypto coins out there.
Nothing is the best time to get into trading crypto but today. If this picks your interest, here is how to start with cryptocurrency trading.
How To Start Trading Cryptocurrency?
This trading model consists of exchanging a cryptocurrency for another, buying and selling crypto coins, and trading fiat money into crypto. It is almost similar to FOREX (foreign exchange), where fiat currencies from different countries are traded 24 hours every day.
The number of distinct cryptocurrencies has blown up in recent years. Today, there are about more than 1,500 are in existence.
Many of these coins can only be earned using major cryptocurrencies such as Bitcoin or Ethereum. Because of this, you will likely have to trade to contribute to initial coin offerings (ICOs,) or use a blockchain company. One advantage of crypto trading is that someone can start without mining the coins themselves– a process that takes energy, technical know-how, time combined with a ton of computing power.
How To Get Started In Trading Cryptocurrency?
To start trading, make sure to have the following:
- Any cryptocurrency wallet – paper, mobile, hardware, or software wallets
- Access to an ‘exchange’ that lets you buy, sell, or trade crypto
Some reminders about cryptocurrency trading
- The cryptocurrency exchange is not part of stock exchange
- Beginners may opt and prefer to trade cryptocurrency stocks.
- Cryptocurrency trading is a 24-hour market
- The market is incredibly volatile.
Some Beginner Slip-Ups To Avoid
- An excellent tip is to determine the reason behind the rise and fall of a particular cryptocurrency’s price before you make an investment. Buying a crypto coin in freefall and waiting for its value increase again may seem a wise option, but there is no formula saying that it’ll bounce back. Chasing profit by backing a currency that surged can also be tempting, but there’s always the danger of “pump and dump” schemes where the price crashes afterward. So, make sure to know fluctuation’s “why” before you buy.
- Avoid putting your entire investment in one basket. Just like good-old investing, it is better to have a diverse portfolio and spreading risk. In this way, if one cryptocurrency’s price drastically goes down, it won’t have a disastrous effect on your asset’s overall value.
- Lastly, always check, over and over again while trading – a simple tip that even seasoned crypto holders seem to forget. When setting up buy or sell orders, ensure that your numbers add up, as even the smallest of nuances can make you lose significant amount. Also, when bargaining with an exchange, make sure you are sending crypto coins to the correct address.
How To Know Which Platform To Invest Into?
There are a lot of exchange platforms for cryptocurrency, and each is almost different. If you decide to get into cryptocurrency trading, you need to analyze the platforms on the following criteria:
Crypto-exchange platforms are not always transparent. For example, many of them have been found to distort the volume of trades largely. Honest company services usually do not hide their data.
Acceptance for fiat money
Of course, be attentive to the sites that work with your national currency. This will help save on commissions, especially if you pay with a credit card.
Many exchanges are showing off their security systems to their users. The worst thing that can occur is hacking, causing the loss of customer funds. Some exchange systems have started to accept insurance assuring reimbursement in case of such a mishap.
Even though the crypto trade has been steadily getting popular over the past years, there is a problem that the industry can’t yet cope with – it is hacking. According to Chainalysis, an entity that helps governments and financial institutions fight money laundering, about $282.6 million was stolen from exchange sites in 2019. Although this is well below the $875.5 million stolen a year earlier (partly because of the higher value of the crypto monitors themselves), there is still insufficient assurance that the money stored in the wallets on the exchanges is safe. Click here to know more about cryptocurrency trading!
Although cryptocurrencies are gaining popularity these days, there is still a widespread notion that this is mere speculation. Some countries and economists say that this will eventually crash. But without a doubt, with its traction to the global community, cryptocurrency’s potential is endless! Just remember what the internet did to those who did not adapt early – they have been behind.
Learning how to start with cryptocurrency trading is one of the best decisions today. Not only is it a time for several services and options, but the information is also out there. It is for you to take and make use of it. Also, look at the trend at how other economies and banks have been accepting cryptocurrencies as a mode of payment and transaction.