Sunday, August 14, 2022

How To Get Into Crypto Trading

What Cryptocurrency Should I Invest In

How To Get Into Crypto Trading Easily | 2 Ways You Should Know!

If you’re a beginner and searching for the best crypto to invest in, then perhaps it might be wise to stick with established projects like Bitcoin, Ethereum, and XRP. However, there are thousands of other cryptocurrencies to choose from – so you should ensure that you conduct your own independent research.

This article was written for Business 2 Community by Kane Pepi.

Cryptocurrency Trading Vs Stock Trading

Cryptocurrency trading is often seen as more high risk than stock trading, but it depends on what stocks or cryptocurrency youre trading and how youre trading it. Trading penny stocks or trading options can be equally, if not more, risky than trading cryptocurrency.

Before trading cryptocurrency, you should be aware that you risk losing your money to the market. If you really believe in the future of cryptocurrency, holding your crypto assets for the long term may be more beneficial than trying to time the markets.

Differences Between The Stock Markets And Crypto Markets

  • Owing to its old age, the stock market is more stable and less volatile. The crypto market, on the other hand, is accustomed to wild price swings. It is pretty normal to see double-digit percentage swings in a matter of hours.
  • . Age is a significant factor in trading. The stock market has been around for a long time, while the crypto market is only about a decade old. This means that market value and trade volume in the former is much larger compared to the latter. The younger age also contributes to the wild volatility experienced in the crypto market.
  • . In the stock market, you invest in the publicly listed company shares by buying their stocks. In the crypto market, you invest in the idea, the technology, or the currency , but not the company behind the currency.
  • Regulations. Since the stock market has been around for ages, regulators have had enough time to develop and implement rules and regulations governing the markets conduct. This contributes to the minimal volatility we highlighted earlier. In the cryptocurrency market, this is not the case. The regulators are still grappling with understanding the emerging asset class, and this lack of regulations are part of the reason for the markets wild nature.

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Exchange Cryptocurrency To Cryptocurrency

If however, you already have some Bitcoin stashed, or you would prefer to purchase Bitcoin and then use it to trade with other cryptocurrencies, then these cryptocurrency- cryptocurrency exchanges are most definitely worth a look.

This is usually the next step, after you dip your toes into cryptocurrency world, but these are the exchanges you should be using if you decide to go for trading:

This is one of the fastest growing exchanges in the world. Launched in 2017, it has grown at an incredible rate and managed to acquire a pretty good reputation in the process.

Binance has also become a crypto-community latest sensation due to a large number of available coins.

It is available in multiple languages, it offers a very user-friendly interface, and it also provides super high-speed processing of orders, which is very convenient. You can only trade cryptocurrencies on it though, and all payments must be effected in cryptocurrency, not fiat currency.

One of the great things about it is that they are always adding new coins and it is one of the first to offer coins after a successful ICO, something a lot of the other exchanges are a bit slow to pick up.

Think About The Value That The Project Is Bringing In

Role of Canadian Crypto Exchange In The Future of Crypto

Check to see whether the project is bringing in any practical utility into the ecosystem. The perfect example of this is Ethereum. There is a reason why it took off so fast for the first time, developers around the world had a platform that they could use to build their own dapps or decentralized applications on a blockchain.

Along with that, keep in mind the issues that the crypto world is desperately looking to solve privacy, scalability, and interoperability. A good way to go about your investment is to find the projects that are specifically working on solving these problems.

As of 2021, the players trying to solve these same problems and roll them all into their platform, or Layer 1 network include:

  • Matic

Each token role has its own purpose, as outlined below:

  • Right: the token holder gets a certain amount of rights within the ecosystem, such as the right to vote.
  • Value exchange: the token helps buyers and sellers trade value within the ecosystem.
  • Toll: the token acts as a toll gateway in order for the holder to use certain functionalities of the system.
  • Function: the token enables the holder to enrich the user experience inside the confines of the environment.
  • Currency: the token stores value that can be used to conduct transactions both inside and outside the ecosystem.
  • Earnings: the token provides an equitable distribution of profits or other related financial benefits among investors.

So, how does this all help with evaluating token utility?

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Choose Which Cryptocurrency To Invest In

If your eToro account is funded, you can now decide which cryptocurrency to invest in. eToro lists 60 digital currencies – so click on ‘Discover’ to see what markets are supported.

Alternatively, you can use the search bar at the top of the page if you already know which cryptocurrency to invest in. In our example above, we are searching for BNB.

Leverage At Crypto Trading Platforms

Leverage trading means you can start the crypto trade way more than your capital investment.

Top cryptocurrency trading platforms like Bitmex, , Binance, and OKExoffer leverage up to 1:100. For example, every 10 $ you invest, you will have the possibility of trading cryptocurrency worth 1000$ at those exchanges

Likewise, other crypto trading platforms like e-toro or Whaleclub, every $10 let you trade crypto worth $250. While forex trading platforms generally do not offer such leverages.

The first major rule to cryptocurrency trading is finding the specialized altcoin trading platform.

When it comes to investing the money everybody wants the secure, user-friendly and renowned altcoin trading platforms Just as the number of altcoins is increasing in the market so are the trading platforms.

Hence finding the right crypto trading platform is not a piece of cake. The problem is that not every cryptocurrency trading platform is legit and can be trusted.

If any Crypto trading platform run away with your coins or shut down, then there is no way you can get your Cryptocurrency back.

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What You Should Know Before You Start Trading Cryptocurrency

If all you know about crypto trading is the above, you know enough to get started trading cryptocurrency.

However, there are a few things to know about trading cryptocurrency beyond what was noted above that can help you go into crypto trading prepared:

In other words, if you understand order types, security, and what you are trading, you are ready to start trading.

NOTE: For more tips and tricks, check out our crypto investing tips and tricks page.

TIP: There are a few sides to cryptocurrency. 1. you can trade and invest in it, 2. you can use it for transactions , 3. you can break out a graphics processing unit and some software and mine coins , 4. you can develop for it, etc. All those and more are valid and interesting ways to interact with the crypto space, but with that in mind, this page is focused on trading cryptocurrency . With that said, even if you want to do the other things with cryptocurrencies, you still need to be set up for trading .

Investing In Cryptocurrency Vs Trading Cryptocurrency

Futures & Options in Live Crypto Trading || Delta Exchange || How to Trade Into Crypto || DT4B

The terms ‘investing’ and ‘trading’ are typically used interchangeably in the cryptocurrency industry. However, just like in the stocks and shares scene, these two terms refer to different strategies.

For example, in the case of cryptocurrency investing:

  • When you invest in a cryptocurrency, you typically do so with a long-term vision in mind. Hence why so many investors look for the best long term crypto investments on the market.
  • This means that at a minimum, you will likely hold onto your tokens for at least one year.
  • Cryptocurrency investing requires little input from you after having bought your chosen tokens.

And, when you trade cryptocurrency:

  • Cryptocurrency trading is typically viewed as a shorter-term strategy.
  • This means that you might buy a cryptocurrency and cash out within the next few weeks or months. This is also referred to as crypto day trading.
  • In some cases, traders will open and close a position within one day.
  • Crucially, cryptocurrency trading requires active participation in terms of research and technical analysis.

As a newbie in this industry, it’s best to stick with a long-term approach to cryptocurrency. This means that you will look to choose solid projects that offer a viable long-term outlook and thus – you will have little interest in shorter-term volatility.

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Before You Buy Bitcoin

Privacy and security are important issues for Bitcoin investors. Anyone who gains the private key to a public address on the Bitcoin blockchain can authorize transactions. Private keys should be kept secretâcriminals may attempt to steal them if they learn of large holdings. Be aware that anyone can see the balance of a public address that you use. The flip side to this public information is that an individual can create multiple public addresses for themselves. Thus, they can distribute their stash of Bitcoin over many addresses. A good strategy is to keep significant investments at public addresses that are not directly connected to ones that are used for transactions.

Anyone can view a history of transactions made on the blockchainâeven you. Although transactions are publicly recorded on the blockchain, identifying user information is not. On the Bitcoin blockchain, only a user’s public key appears next to a transactionâmaking transactions confidential but not anonymous. In that sense, Bitcoin transactions are more transparent and traceable than cash because all of them are available for public view, unlike private cash transactions. But Bitcoin transactions also have an element of anonymity built into their design. It is very difficult to trace the transacting partiesâi.e., the sender and recipient of bitcoinâon the cryptocurrency’s blockchain.

What Are The Most Popular Venues To Buy Bitcoin

The most popular venues to buy bitcoins are cryptocurrency exchanges, brokerages , and payment services like PayPal. You can also buy Bitcoin from peer-to-peer exchanges. For indirect ownership of bitcoin, you can invest in companies that hold the cryptocurrency on their balance sheet, such as Tesla, Inc. or MicroStrategy Incorporated .

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How To Buy Cryptocurrency On A Decentralized Exchange

  • First create an account on a centralized exchange
  • Create a hot wallet by adding as an extension to your browser
  • Be sure to physically write down your secret passphrase on paper and keep it safe!
  • Transfer crypto from the wallet on your centralized exchange to your hot wallet
  • Evaluate and choose a blockchain ecosystem you want to use
  • Find a decentralized exchange that has the liquidity and assets you want on the ecosystem you want
  • Buy crypto!
  • The question, what type of exchange to use depends on a number of factors. What is your risk tolerance? What are your investment goals and timelines? What is your investment or trading strategy? How important is security, privacy, or decentralization to you?

    There are a lot of variables and trade-offs to consider, and no one-size fits all answer. One thing is for certain: crypto investing can be risky so do your own research, and do not make investments without strong conviction.

    If you want to learn more about how to safely invest in CeFi and DeFi exchanges, our Crypto Investment School course has a comprehensive curriculum taught by crypto investors whove got real-world experience.

    How To Make A Crypto Trading Plan

    Crypto Trading Signals  How They Work

    The difference between gambling and trading is having a plan. The most important part of creating a plan is ensuring it suits your specific trading goals. In general, a trading plan involves a 3-step process:

    1. Look for patterns

    The basic principle of reading charts and creating trading plans is to look for patterns in previous price movements and then use those to try and predict future movements.

    Some patterns emerge frequently enough across multiple markets that they’re given their own names, such as resistance and support. Others can be much more obscure and aren’t given names of their own.

    For example, if you think Bitcoin goes up when Ethereum goes down, or that Bitcoin rises when the US dollar falls relative to the Chinese renminbi, or anything else you can think of, that could be a pattern you can trade on.

    While patterns can be very helpful for traders, it’s worth remembering that past performance is not always a reliable indication of future performance.

    2. Make a plan and stick to it

    The following are the 2 basic components of a trading plan:

    • A point where you take profits
    • A point where you cut your losses

    For example, someone’s basic plan might be to sell 33% of their Bitcoin for every $1,000 the price goes up or to immediately sell all their Bitcoin if prices drop below the current support line . To lay out this plan, they could set up a series of stop-limit orders.

    3. Experiment

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    What You Need To Start Crypto Trading: A Four

    Image credit: Unsplash

    The crypto market cap is now about $300 bn with more than 1500 crypto coins. It comes as no surprise that more and more people worldwide are deciding to get into this industry and starting to invest in crypto. However, at the beginning trading crypto can seem confusing as the process itself differs from trading on fiat exchanges and what many investors and traders are used to.

    Today we will outline the four essential steps that will help you kick off your crypto trading.

    1. Pick an exchange to trade on

    Just like fiat finance, to invest in cryptocurrencies you need a place where these coins are traded. To commence you will need to register and put some funds into your account, and then start buying and selling crypto.

    There are a number of popular crypto exchanges, for example:

    Such websites can have different terms of service and their trading platforms may differ a lot, so it is best to research and go through several reviews of exchanges . This will help you to choose a venue that suits you best.

    Important note: not all exchanges accept fiat money, so you may have to buy cryptocurrency first and then deposit coins into the exchange to start investing .

    This leads us to the next step of obtaining a cryptocurrency wallet.

    2. Chose a cryptocurrency wallet

    Currently, there are several types of crypto wallets . To get started, you will need a mobile or desktop hot wallet, connected to the internet. Read more on the topic in this guide.

    Prerequisites For Choosing A Specialized Cryptocurrency Trading Platform

    1. Regulation & Security

    A trading platform should be regulated by concerned authority then only it can be trustworthy. The security of the cryptocurrency platform should be the utmost priority

    2. Fees

    Fess generally express a percentage of the transaction amount and an average cap of around 0.30%. Most cryptocurrency exchanges offer a volume-based fee structure means if you buy or sell a large volume of altcoins you have to pay smaller fees.

    Some exchanges use maker-taker fee model. Because every transaction costs fee so one has to find platforms which best fitted for a profitable trade.

    3. The number of altcoins

    Higher the number of altcoins and fiat currency available to trade, higher the legitimacy of a cryptocurrency exchange

    4. Trading volume

    Trading volume is also a major factor in the verge of finding a right crypto trading platform.

    The high trading volume provides you an insight into that cryptocurrency trading exchange, that people are willing to spend their money on that trading platform.

    This justifies the reliability and good business practices of that network.

    5. Reputation and Longevity

    Reputation and longevity of a trading platform help in building trust especially for beginners.

    Below are the few trusted cryptocurrency trading platforms which are best suited for the crypto trading

    • Bitmex One of the reputed trading platform available worldwide

    Generally, there are two types of crypto trading approach.

    Long-Term Cryptocurrency Trading


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    What Are Cryptocurrencies And How Do They Work

    Cryptocurrency is based on blockchain technology. That’s a chain of information registration and distribution that is not controlled by any single institution. Instead, it works as a record of digital transactions that are independent of central banks.

    There are all kinds of technical details related to blockchain technology that may be worth investigating if it doesn’t drive you into a technological coma. But essentially, it eliminates the middleman such as a bank and allows buyers and sellers to transact business directly between each other. That should also serve to lower or even eliminate transaction fees, which is a major part of the attraction of cryptocurrency.

    The most popular cryptocurrency is Bitcoin, whose price is regularly tracked in the major financial media questioning- should you invest in bitcoin?. But there are actually hundreds of cryptocurrencies, including many that have already come and gone.

    Crypto Trading Vs Stock Trading


    Stocks and cryptocurrency are two very distinct types of investment vehicles. While both are liquid assets that belong in your speculative portfolio, that’s where the similarities end. These are two entirely different kinds of securities that should be kept in separate portions of your portfolio.

    Stocks are the ownership stakes of a publicly traded corporation. Each share of stock you purchase gives you a percentage stake in the company. This ownership is proportional to the number of shares issued by a corporation.

    An investor can profit by selling their stock to other investors. The difference between what you spend for the asset and what you get when you sell it is known as capital gains. Aside from that, the advantages of owning shares are entirely dependent on the firm in question. Stocks can also gain value by providing dividends to their shareholders and exercising voting power.

    A cryptocurrency is a digital asset that exists solely on the internet. This means it doesn’t have a physical component and only exists as records in an online ledger that tracks ownership. This is in contrast to the United States dollar, which has both a physical and a digital component . A cryptocurrencys individual unit is referred to as a token, much as a stock’s individual unit is referred to as a share.

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