The cryptocurrency market is booming, and the stocks have skyrocketed recently. More people are investing every day to take a big chunk out of the crypto-pie. You are interested, right? That’s why you’re here in the first place!
If you’re completely new to this if you stare blankly when your friends or colleagues talk about how they’re getting rich everyday trading money that exists in the crypto-world, this guide is for you. In this guide, you’ll learn how to trade cryptocurrency.
Even if you’ve started already, we still urge you to take a look at this article, and you might come across something that you were doing wrong, or weren’t doing at all!
What’s a Cryptocurrency?
Cryptocurrency is, in essence, an asset that exists in the crypto-world and can be used as a medium of exchange for real cash.
Cryptocurrency doesn’t exist in any physical form, usually. However, sometimes it does in the form of cryptocurrency paper.
Types of Cryptocurrency
There are tons of cryptocurrencies that you can choose from when you’ll be exchanging and trading them. Each currency comes with its value and number of buyers and sellers.
According to that, the prices rise and fall. The prices of some of these coins can be rather volatile, as they can change in a matter of moments.
The first step you’ll have to take when you are exchanging cryptocurrency is picking an exchange.
Before You Start
There are a few aspects that you must look into before riding head-on into the traders’ battle arena. These are:
1. Find Out What’s Working
Remember, the hyped currencies aren’t the only one that deserves attention. There are coins such as Das, Ripple, Zcash, and several others that are steadily growing. Keep your eye on these and do the maths.
2. Should You Risk Everything?
Taking a risk is a part of crypto trading. The prices of these currencies are extremely volatile. For example, the price of Bitcoin reduced by a thousand dollars, and then leaped by a staggering amount of four thousand dollars, all in three months! Yes, the risk is pretty high.
But there’s a possibility in that risk. If you can ride the tide, you’ll certainly be able to make a profit out of it.
3. What’s Blockchain again?
Blockchain is the concept that keeps cryptocurrency trading alive. Although you don’t have to know what the nodes and miners are doing, you should try to understand the basic concept of how this works. This knowledge will enable you to predict price hikes and drops.
Picking an Exchange
When you want to start trading cryptocurrency, at first, you’ll have to pick an exchange. These exchanges are essentially online marketplaces that allow the customer to buy and sell their crypto assets. You can trade a variety of currencies from the conventional fiat to bitcoin.
You’ll need to select from a long list of brokers. There’s:
- Binance etc.
It’s only natural to be confused about cryptocurrency platforms. As this is one of the most important decisions you’ll make, you better consider the following factors before jumping right in!
Cryptocurrency Exchange Apps
Cryptocurrency exchange apps are the place where you’ll be spending most of your time. In the life of a cryptocurrency trader, every moment is precious. One small moment can make you miss a huge profit. That’s why traders are always glued to the apps.
The exchange you sign up to make sure it’s got an app that you can use easily and understand what it’s trying to say. If the app or the software isn’t friendly to your taste, you’ll have a hard time profiting from it.
If you’re unsure about a particular exchange, open up a demo account first to understand whether that platform is suitable for you or not.
The exchange platforms come with a commission and a fee for each transaction or conversion you make.
As you’ll be trading a huge amount of assets, even the slightest change in fees will have a heavy impact on your assets. That’s why you better keep a lookout for the following fees:
1. Trade Fees
This the amount of charge you’ll have to pay for exchanging on their platform when you trade from one currency to another. The fee on the person who offers is called the marker fee. On the other hand, the fee on the person who accepts the offer is known as the taker’s fee.
2. Exchange Fees
This is the fee you’ll be paying for using their services. The amount you’ll have to pay depends on the type of currency you’re using.
3. Withdrawal and Deposit Fees
As the name explains itself, this is the fee you have to pay for depositing or withdrawing money to or from the exchange.
Check which exchange has the most customer satisfaction and least complaints regarding security. As you already know, these online platforms aren’t free from hackers and malware.
A lot of exchanges fall under attack regularly. So, pick an exchange that’ll offer you decent protection. Otherwise, you’ll have to say goodbye to your precious money!
Don’t take this lightly, as this decision can affect all of your future actions. Sit down with a cool mind and do the maths. Spend a decent amount of time judging the available cryptocurrency exchanges, and select the one that comes with the tools you need, and at a reasonable price.
Get a Crypto Wallet
The third step we’ll be talking about in our “how to trade cryptocurrency” guide is getting a crypto wallet. Crypto wallets are the next major thing you’ll have to choose.
There are tons of Crypto wallets available. However, if you’re starting, we would recommend you use the Exodus wallet (complete review)
Why this particular wallet?
The Exodus wallet comes free of cost. Which means you won’t have to spend any initial cost. Secondly, the Exodus wallet supports more than a hundred different cryptocurrencies, which is absent even in some of the paid wallets!
Thirdly, this wallet has a great customer support and help desk. The official website of Exodus contains more than a hundred articles that explain different tips and tricks, user manuals, etc.
Finally, the user-interface of Exodus is so intuitive that you’ll take no time learning it. The information is visualized in stunning graphs and charts that you’ll understand in minutes!
Then again, you’ll be able to link these wallets with hardware wallets such as Trezor. Hardware wallets are one of the safest for day to day traders. And if you wish to continue trading, this feature makes Exodus all the more attractive.
However, Exodus doesn’t have airtight security. So, you better not keep too much or all of your coins in this wallet. Just keep the amount you’ll require for a day to day transaction, and you’re good to go. However, if you want to look into other wallets, take a look at Jaxx Wallet, Coinomi, or Blockchain.
Do Your Research
Cryptocurrency is a volatile asset. You never know when it’ll rise and when it’ll fall. However, you can always try to predict. And the more accurate your predictions get, the more likely you’ll succeed. And the only way to get better at predicting is researching different currencies.
Before you invest in a particular currency, go research about several coins using Coinmarketcap. This is one of the best tools to research cryptocurrencies. With this website, you’ll find information on the trade volume, supply, and capitalization.
You’ll be surprised to know that the best way to keep track of these prices is very ancient. You just have to read the news!
There are amazing blogs regarding this industry, such as; News Bitcoin, Hackernoon, The Merkle, etc. You can make use of social media as well. Dig into the channels in Telegram, the discord that talks about these kinds of stuff.
Utilize Technology and Metrics
Make sure you utilize the array of software and predictive tools the internet has to offer. No matter how up to date you are with everything, these tools will always give a result that’s a bit different than yours.
Using this data, mixing them with your analysis, you can make the perfect models for prediction. These tools will give you the extra edge you require to gain the upper hand in the industry.
Study the metrics presented to you. If you compare the number of the trading volume with the number of active wallets, you’ll be able to predict an approximate value for that specific currency.
In our guide of “How to trade cryptocurrency“, we’ve tried to focus on the basic points you would need focus on. Crypto-trading is full of risks, but you can always use that to your favor and get the best out of it. Make sure you do the research properly.
A lot of people ride head-on into trading, and they completely ignore the fundamentals. Make sure you don’t make the same mistake.
Learn the basics of Blockchain, wallets, and exchanges. If you know the business before you start, you’ll certainly be able to generate profits from it!