Crypto trading involves buying and selling cryptocurrencies the same way traders work with currency pairs. Over the past several years, cryptocurrencies have continued to garner popularity in the market as their demand increases.
Bitcoin has been scaling the price charts, and in early 2017,
it surpassed the price of gold per ounce. Although it is the most recognized, Bitcoin is not the only digital coin that a cryptotrader can work with. Ripple, Litecoin, and Ethereum are other currencies that contribute to the ballooning cryptocurrency market value.
The ease of getting into crypto trading is one reason more people are turning to the practice as an investment alternative. Traders can get set up in less than an hour and begin selling/buying digital coin. Crypto trading has smaller spreads compared to the forex exchange, meaning that the margin between the asking and bidding price is low.
As with any other trading activity, working with cryptocurrencies comes with significant risks. The relatively new nature of crypto trading means that traders encounter a lot of misinformation out there. Cryptotraders can end up with digital currencies with no value or fall into financial scams if they don't know how to navigate the sector. But besides gathering relevant data, brilliant traders know the most suitable tools for crypto trading.
The exchange you use for your crypto trading plays a significant role in your success or loss. Cryptotraders have a choice of various digital trading platforms where they can buy and sell digital currencies. Trading exchanges offer different features, which a trader must consider carefully before using the platform.
The same scrutiny you employ to find the
best forex trading platform should apply here. Look for trusted trading exchanges. As crypto trading enters the mainstream market, complaints against trading exchanges have increased. Check out if a digital wallet has any complaints lodged against it before putting your money in.
Coinbase is one of the top platforms to buy Bitcoin. It allows traders to link to their checking accounts, which makes transactions convenient. Poloniex is reliable when trading altcoins. Bitfinex is another top-rated platform by trading volume.
Whether it's Altcoin, Ethereum, or Bitcoin, take the time to learn more about an exchange and its functionality. What type of security does it offer? Can you short bitcoin? How efficiently can you transfer money to your checking account? Use such criteria to pick a trading exchange.
Another tool that a cryptotrader should work with is a charting application. What makes trading easy today is the ability to use software that provides useful information to back up your trading decisions. Before you make an execute order, it is critical that you understand the digital coin market and its performance. A charting tool will give you historical snapshots, which paint a picture of how a particular cryptocurrency behaves.
Pick a tool that simplifies decision-making with features like market capitalizations, trade tracking, and technical analyses. Chris Dunn, a successful digital currency trader, uses Coinigy - a charting tool that allows you to monitor how your trades are going.
A charting tool takes the guesswork and emotion out of your trading decisions. As with other currencies, digital coins follow certain trends in the market and are influenced by many of the same factors of demand and supply. Select a charting tool with mobile capabilities so that you can keep up with trades and check on price charts on your handheld devices.
Whether you are trading in Ethereum, Bitcoin, or Litecoin, you need to find suitable storage for your currency. Cold storage means keeping your coins offline as opposed to leaving them online (hot storage). Storing your cryptocurrency online comes with risks like theft.
Some traders make the mistake of trusting trading exchanges to store their money. The problem with this option is that a trading exchange can go bankrupt, steal your digital currency, or get hacked. The probabilities of such outcomes with cold storage are minimal.
Cryptocurrency wallets are available for different users, so understand your needs before settling on one. Nano Ledger S, Trezor, and KeepKey are some of the top choices. Security is a priority when picking a digital wallet, but other aspects come into play as well.
For instance, is the wallet free or not? The appeal of cost-free storage is obvious, but you must consider what you have to give up in exchange. A trader must also check the reliability of the company. Has the digital wallet had hacking or theft issues in the past? Suji Velu of Blockgeeks
also advises that you factor in the mobility, convenience, and user-friendliness of a cryptocurrency wallet.
The rise of Bitcoin and other breeds of cryptocurrencies has made trading in digital coin a practical way to invest money. Selling and buying digital coin doesn't come with as many complications as other trading options, but still, a cryptotrader must have the right tools.
This press release is for informational purposes only and should not be viewed as an endorsement by CoinIdol. We take no responsibility and give no guarantees, warranties or representations, implied or otherwise, for the content or accuracy. Readers should do their own research before investing funds in any company.