One of the first things that you need to do in trading crypto assets is to ensure that you have a wallet where you can keep any cryptocurrency you’ll be buying from various exchange platforms. The first stage in cryptocurrency trading is creating accounts and its essence is to show interests and provide you the platform to get your wallet. Aside from that, there are other things you should know about, especially if you plan to join a crypto trading competition in the future. Such things include the following:
Cryptocurrency Trading Is Different From Forex Trading
One of the things you should know about cryptocurrency trading is that it’s different from forex trading. The primary difference between forex trading and cryptocurrency trading is that new cryptocurrencies appear constantly and there's a lack of available history showing their ups and downs that may create a strong level of resistance and support. There’s also high volatility in cryptocurrency trading since it’s based on the news and there’s less opportunity for analysis.
Be Aware Of The Types Of Cryptocurrency Trading
If you want to be a pro in cryptocurrency trading, there are two types of cryptocurrency trading that you should know and these include long-term trading and short-term trading.
Long-term trading refers to holding a certain crypto asset for a long time. This is where the term HODL originates, which stands for Hold On For Deal Life. The concept behind long-term trading is to hold the cryptocurrency assets for long term regardless of the volatility in the hope that it would increase after holding it for years.
Short-term trading, on the other hand, refers to purchasing crypto assets at a low price to hold for a short time before selling at a certain marginal profit. Trading time may be between months and minutes. The concept of this kind of trading is simple. You purchase a coin for the reason that you think the price would increase in just a short time and sell it to get quick profits.
Choose The Best Cryptocurrency Trading Platform
When it comes to cryptocurrency trading, it’s essential to choose the right and best platform. There are differences across competing exchanges. So, it’s helpful to do research to decide which is perfect for your needs.
Some of the things you should look out for when choosing a trading platform for cryptocurrencies include:
- Leverage – It refers to the amount you’re allowed to trade above your deposit and by how much you may multiply your gains. High leverage would suit risk-takers who search for high rewards. However, for beginners, high leverage isn’t recommended.
- Available Currencies – The most common one is bitcoin to USD, but some trade pairings could be available on a certain platform but not on another. Just make sure that the crypto you prefer to trade with is supported.
- Customer Support – You would want to know that all of your queries, small or big, can be answered. Just choose an exchanger that has an efficient support team.
- Minimum Investment – It refers to the minimum amount you could invest and deposit with. It’s essential as some platforms would require various minimum investments. So, choose the one that perfectly matches with your budget.
Know What’s Growing
Litecoin, Ethereum, and Bitcoin top the list in terms of ease of use and tradability. But, there are also other cryptocurrencies that you should keep an eye on. These may include Monero, Das, and Zcash. Stay updated by doing your homework and pay attention to the changes.
You don’t have to understand the crypto’s technical complexities, but having a basic understanding will surely help you respond to the announcements and news that could help you predict the price movements in the future. One of the basics you should know in crypto trading is blockchain, which is a growing list of secure records. It secures the interactions and stores them publicly. Moreover, it serves as a public ledger, which cuts out the intermediaries like banks.
Cryptocurrencies are widely known as volatile. For instance, the Bitcoin’s price may lessen and could increase quickly within just several means. While it means that the risks are high, it may also mean that the potential for profits is also good. That is why you must check the volatility of the exchange you want to go with.
Cryptocurrency trading comes with a great deal of opportunities and risks. Regardless of your experience as a trader, ensure that you’ve done your own research to make a well-informed decision when making a move since cryptocurrency suffers from huge volatility regularly. Moreover, make sure to only invest in how much you can afford to lose.