A Cryptocurrency Trading Guide for Beginners
Cryptocurrencies are growing and many cryptocurrency traders have turned millionaires. But still, there are a lot of people asking if cryptocurrency trading is beneficial or not.
If you are also one of them, then this post is for you. But, we are not going to change anyone’s mind about cryptocurrency trading.
We are going to give the exact situation that the cryptocurrency trading arena is facing. Along with it, we will tell you almost everything about trading cryptocurrencies.
From the basics of this volatile market to the tips for trading cryptocurrencies. We are here to get you going in this market.
If you are going to start trading in crypto exchange or you have already started. You will get useful information reading this post till the end.
Know The Basics Of Cryptocurrency Trading
Before we start anything we need to know more about the basics of that particular thing. The same thing happens when we talk about cryptocurrency trading.
You have to know more about cryptocurrencies and how people made them. These are digital currencies, which are created using technologies such as cryptography.
The most unique thing about these currencies is that they are decentralized. There is no government, reserve bank, financial institution, etc to regulate this currency. This currency was started with the foundation of bitcoins.
But later on, many currencies have started. We will tell you about the basic but vital things that you need to start cryptocurrency trading.
Things You Need To Start Cryptocurrency Trading
These are basic but necessary things required to start cryptocurrency trading. Almost any digital currency trading will need these things.
Without these things, you cannot trade any virtual currency. We are not adding Bitcoin mining, analyzing tools, fundamental analysis, more to this.
#1. Wallet To Hold Cryptocurrency
Crypto wallets are different from your banking wallet connected to a bank account. Many cryptocurrency wallets are there such as Coinbase, Trezor, Keepkey, Ledger. People also use them in cryptocurrency trading. You can use these wallets to keep your digital money.
#2. Cryptocurrency Trading Platform/Exchange
As in other financial markets, cryptocurrency exchanges are also different. There are many cryptocurrency exchanges out there in the world. Millions and billions of users use these exchanges for cryptocurrency trading.
Some of the major exchanges are Binance MLT, Upbit ROK, Coinbase, Bithumb, Bitfinex, more. These exchanges have different regulations and terms.
No matter if you are going to trade Bitcoins or Ethereum, you will have to get a cryptocurrency account. Many brokers are there and they have different trading brokerage fee structures.
Some wallets like Bitcoin Wallets, are also providing brokerage services in cryptocurrency trading. Choose any broker from major brokers such as TD Ameritrade, Interactive Brokers. You can also go for Robinhood, E-Trade, Tradestation, more.
#4. Perfect Cryptocurrency
Like the foreign exchange market, crypto markets also have many blockchain currencies. There are many popular currencies other than Bitcoin and Ethereum.
Some are Ripple, Litecoin, Libra, Bitcoin Cash, Monero, EOS, more. Must try to know more about the currency that you have chosen. If you want to trade Bitcoins, then you must know about the Bitcoin Foundation, Bitpay, Bitcoin ATM, etc.
#5. Crypto Trading Approach
Choose a trading style before you spend virtual coins from your online wallet. Buy bitcoins or any other currency after having its complete understanding.
There are many trading styles of this market that a trader can follow. Trading USD to crypto and crypto to real money is one of them.
#6. Information Source
Try to develop a strong and authentic source of data for cryptocurrency trading. These sources must provide you with bitcoin news, blockchain policies, bitcoin exchange rate news. Also keep a track on cryptocurrency market news, cryptocurrency mining policies, more.
Pros & Cons Of Cryptocurrency trading
You can decide on your own if the crypto market is profitable or not. Understand the pros and cons of cryptocurrency trading before going ahead.
The most common advantage of cryptocurrencies is rapid growth. Cryptocurrencies are popular because they are not controlled by any government authorities.
These virtual currencies are independent. The accessibility of this type of trading also makes it a good option for investment.
Other than this ease of trading, there are many other benefits of this trading. Confidential transfers, individual ownership are some other pros of cryptocurrency trading.
High-level of risk is the major disadvantage of this trading market. The volatility and the scalability of this market always cause loss to the new traders. Beginners who don't know how these work will get confused by the market volatility.
The other major drawback of cryptocurrencies is that it is an anonymous currency. People use them for many illegal acts for financial offenses. Some of the activities are like money laundering, running Ponzi schemes, etc.
Cryptocurrency Trading: Things To Consider
Must consider the below-mentioned things before you start your career with cryptocurrency trading.
#1. Order Types
The fundamental rule of cryptocurrency trading is the order types. Various order types are there like Limit order, Market order, more. You must have to know about these orders and other terms like Slippage.
Crypto exchanges don't have that level of liquidity as compared to forex markets. So using order types and stop features is necessary.
#2. The volatility of Crypto Markets
Cryptocurrency exchanges are high volatile markets. No experts can predict anything about cryptocurrency trading. So it is better to earn profits and make your funds withdrawn.
If you think that you will invest money for a long time. And will earn huge profits on it, then you may lose money due to volatility.
#3. Legality Of Crypto
It is not a part of the standard and regulated financial markets. Many brokers provide stock trading, forex trading, and crypto trading on a single platform.
But it doesn't mean that all these trades are under one economic market. Each country has its central banks to legalize or regulate the exchange markets. But cryptocurrency is still illegal to trade in some countries.
Because central-banks and federal reserves don't have policies and terms drafted for cryptocurrency. Crypto trading from a country where it is banned won't be profitable for you as an investment. So it is always good to check the legality of crypto in your country.
#4. Beware of Hackers
When you are in cryptocurrency trading, you must beware of hackers. Many phishing brokers are there to steal details. It includes your payment system details and other private data. Due to the anonymity of this currency, it is very hard to find the hackers behind any Ponzi scheme. So always take care of your payment systems and their details.
Conclusion: Cryptocurrency Trading
Crypto markets are growing and the growth is going to be very high in upcoming years. But it is very vital to get more knowledge and information about the market where you are going to enter soon.
If you are going to try your hands with cryptocurrency trading, then you must gain more knowledge.
The above data is not only for beginners but for intermediate traders also. They can also improve their plan and trading strategy by using this information.
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