Cryptocurrency Trading: Simple Tips To Get Started Cryptocurrency trading is often called uncertain and volatile, but it is often chosen as the preferred trading domain for those who want to start their journey in trading
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For those keenly interested in taking advantage of the ever-changing token prices and exceptional levels of volatility, cryptocurrency markets are ideal. However, unlike conventional fiats that are issued and regulated by governments, virtual currencies are decentralized, and there is no specific governing entity to control their issue. Presently, more than five thousand cryptocurrencies are circulating in the market, and it's sure that more will come up in the future.
Given the extensiveness of the market and the unconventional process, trading cryptos may look pretty daunting to beginners. To help you learn how to trade cryptocurrency and make way to profit, this guide breaks down the entire crypto trading process into four simple steps.
Picking up a trading platform
To start trading, you should essentially open an account with a trusted crypto trading platform. Be careful while choosing the platform and look for the following factors:
Security: Though it's unfortunate, crypto exchanges are the favorite targets for hackers. In the crypto exchange landscape, cyber theft and security breaches are not very uncommon. Therefore, while choosing a crypto trading exchange, you should check the strength of the platforms' security measures.
Supported assets: If you are willing to buy currencies other than Bitcoin, check well what assets your exchange supports. It will help you to play in the way you want.
Customer service: If you are a beginner in crypto trading, it's pretty natural that you will have questions or grievances in your initial days. To get them resolved precisely, you should always work with an exchange that offers mind-blowing customer support.
Payment methods: Typically, most trusted exchanges leave you with an array of options to fund your account or buy currencies. Before proceeding, check what payment methods your chosen platform supports (Debit cards, Digital payments, etc.).
Fees: To save your investment returns from unjust fees, you should always check how much your exchange is levying as trading or withdrawal fees. Check well if there are any other fees applicable. The idea is to move forward with a platform that charges the least fees.
Depositing funds: Before getting your hands dirty with trading, you need to make a deposit. Usually, reliable crypto exchange platforms let you deposit funds conveniently using e-wallets, debit or credit cards, and wire transfers.
Carrying out market research: The goal of crypto trading revolves around the idea of picking up profitable investment opportunities. Therefore, carry out detailed market research so that you can find the best digital assets that can give you lucrative returns. You can use platforms like Safetradebinaryoptions to cultivate your crypto trading and investment knowledge base. Typically, these platforms help you stay updated with the nitty-gritty of the cryosphere.
Trade crypto: Once you are done with researching and selecting the currency, it's time to place a trading order. The process is pretty simple. Just enter your stake, which usually starts from $10, and then hit the open trade button. Every reputed crypto exchange lets you trade 24x7, adding more to the convenience.
Store your currency: Once you are done with trading, it's time to store your currency safely. You can store your cryptocurrencies in dedicated crypto wallets. Typically, there are two types of cryptocurrency wallets - hardware wallets and software wallets. Hardware wallets let you store your cryptos in a physical wallet, while the software wallets can be accessed only with an active internet connection.
Crypto trade: The structure
There are two active components of a crypto trading environment: a buyer and a seller. Similarly, trading has two opposing sides: a sale and a purchase. Therefore, trading is a zero-sum game. When a winner, there's a loser too.
When you hold a fundamental understanding of the operational method of crypto markets, you earn the ability to optimize the potential profit. Upon agreeing on a price, the exchange executes the trade, which is done as per the market valuation for a specific asset. Typically, as a buyer, you need to set orders at a lower price than sellers, creating two sides of an order book.
If buy orders overweigh the sell orders, the price rises, and contrarily, when selling overweighs buying, the prices fall. Most exchanges show sells and buys in different colors, which helps the trader gain a quick understating of the state of the market. It is how the crypto trading scene looks. There's a thumb rule of trading - when you purchase something, you should spend the minimum amount possible, and while selling your asset, you should focus on making the maximum out of the deal.
What moves cryptocurrency markets?
If you are a crypto trader, you should know how crypto markets move. The entire crypto sphere moves according to supply and demand. However, being decentralized, crypto markets are free from the typical political and economic concerns which influence conventional fiats. The factors that can majorly affect the prices of cryptocurrencies include the following -
Integration: How easily a cryptocurrency integrates into the existing infrastructures may determine its cost.
Supply: The total number of coins, their launch rates, and the rate at which they are destroyed or burned may affect their prices.
Hype: Though it sounds weird, the cost of cryptos is somehow fueled by hype. How much coverage a currency is getting and how it's influencing different social media platforms can raise or decrease a cryptos price.
Major events: Important events like economic setbacks, security breaches, or regulatory updates may also turn out to be impactful on the value of cryptos.
Capitalization: The perseverance of users and the value of all existing coins may determine the price of a cryptocurrency.
Crypto trading in a nutshell: Crypto trading is all about interest, knowledge, and prediction. Currently, many crypto exchanges allow you to trade currencies using a CFD account. These derivative products allow you to predict whether your selected crypto will perform or not. Such platforms quote prices in traditional currencies, making things convenient to understand.
To conclude, apart from following the given steps, you should explore different trading platforms and be a little courageous to find out things on your own. As a beginner, you may face a few ups and downs; however, over time, you will definitely earn the desired skills to bag profit from cryptos.
Note: Investment in cryptocurrency and crypto assets is subject to financial risk and readers should do their own due diligence. Entrepreneur Media does not endorse any such investment.