If you’re already familiar with the traditional financial world, and in particular with stock trading, cryptocurrency trading can be a lot easier to understand. Read on to learn a few important things you must do to begin cryptocurrency trading like a pro.
Do your research
With crypto trading, everything boils down to research. All the points listed below and pretty much every other thing you do as a trader must be backed by extensive research. As a beginner, you have to assume that you can’t get all the information you need from just one source. The advisable thing to do is browse trading articles and try to find some common ground before you make any decisions.
Choose a cryptocurrency to trade
As stated earlier, there are thousands of assets in the market for you to choose from. There is usually a lot more information for the largest assets, therefore, it makes sense to go down this route. However, it’s also important to not just follow the crowd with the most popular ones; again, this is where research comes in. A good understanding of assets will guide you with your decision.
Pick the right exchange
First and foremost, much like fiat currency, you will need an exchange to trade on. To trade in cryptocurrency directly rather than investing in a fund, you have two choices. You can either use an exchange or use a Forex broker.
To start, you will need to register and put some funds into your account. Following this, you can commence the purchase and selling of crypto. There are a variety of popular crypto exchanges to choose from, some of which include the following:
- Coinbase
- Binance
- CEX
- Poloniex
- Bittrex
- Bitfinex
- KuCoin
Select suitable crypto wallet
There are a lot of exchanges out there. Because of this, investors typically have to somehow be able to transfer funds between them. Moreover, they need a place in which they can store their assets. This is where cryptocurrency wallets come into play.
These wallets are tools that give you the ability to store and send crypto coins back and forth. There is an array of crypto wallet types available, which include mobile, desktop, hardware, and paper. First things first, you will need a mobile or desktop hot wallet. This particular wallet type is the one that connects to the Internet.
Find Proper Source of Information
Among cryptocurrency’s, most notable qualities are the fact that they are highly unpredictable assets. Their prices are prone to moving up and down in large percentages within the span of a few hours. Multiple events can lead to the trigger of these movements, so a cryptocurrency trader needs to regularly monitor market information.
The best method of tracking news pertaining to crypto is to follow major publications and blogs in the industry. Coindesk, News Bitcoin, Hackernoon, and The Merkle are a few choice examples. You can find more useful information on social media. A good idea would be to look into channels on Telegram and Discord, crypto subreddits, and Quora threads.
Utilize Technology
By this point, you should be well-equipped with the proper knowledge and instruments you will need for trading. However, when you compare them with the process of fiat investment, there are still certain elements that are missing. You have to find tools that are similar to the crypto market. For example, Cryptoindex 100 (CIX100) is an automated index whose calculation is by a machine learning algorithm. This algorithm also closely examines cryptocurrencies. This tool gives traders the ability to cut down on volatility and risks for their portfolios.
Conclusion
Cryptocurrency trading has a wide variety of differences in comparison to more traditional fiat exchanges. If you want to thrive in crypto, you will need to find the right assets. The process requires reliable information sources, careful research, selecting a suitable exchange and wallet, and portfolio management benchmarks and tools.