As you have decided to start trading cryptocurrency, you must be aware of the facts and things associated with it. You need to know what exchanges are? How to trade? Which exchanges are leading and uncomplicated? And so on. Let’s move ahead and learn about trading cryptocurrency.
What is Cryptocurrency Trading?
Considering the actual definition, we can say, cryptocurrency trading is to speculate the cryptocurrency price movements. EIther through a CFD account or by buying and selling the digital coins via an exchange.
These are derivatives, where one can keep an eye on the prices of cryptocurrencies and their movements. It does not necessarily require any ownership of the coins. It is easy to go long, that means “buy” when you think the value can rise, or go short means “sell” when you think the value can fall.
As far as exchanges are concerned, you need to buy the coins and own them properly. Moreover, you will need to sign up and create an exchange account. Then place a higher value of your asset for starting a position. Keep the cryptocurrency tokens in your digital wallet.
When you are ready to sell, just go ahead, but before that, you may store the tokens for as long as you want. The details about how much you can deposit/withdraw, or the methods for transactions depend merely on the exchange. It also varies from exchange to exchange. The sense of the data and technology involved may also be different in each exchange.
Names of Famous Exchanges
The top leading exchanges include:
- Prime XBT
Types of trading cryptocurrency
There are mainly two ways of trading cryptocurrency, which are described below:
Fiat to Cryptocurrency
When investors initially start trading crypto, they generally prefer this one. Fiat refers to the conventional money type, i.e., cash. Trading from cash to crypto is beneficial and also profiting. It is easy and straightforward to learn because the exchanges are user friendly and comparatively less complicated.
Cryptocurrency to Cryptocurrency
Mostly the advanced investors having pleasant experience enter this type of trading. When crypto to crypto trading takes place, there are many complications and pairs of coins available on different exchanges. It is essential to learn about the market before hands. However, it further depends on the investor to choose the most suitable type of trading.
How brokers/exchanges support?
It is a vital question. They provide you a platform to trade cryptocurrency and let you become a part of the transactions as you buy and sell your coins. The brokers guide you in an appropriate manner if you are a beginner. Advanced investors can also concern brokers when they are unsure of the market status and price movement.
A very useful website, in this regard, can best guide you. You can take full advantage of “CompareBrokers”. It has detailed descriptions of all exchanges, their exchange rates, and the cryptocurrencies. The data available on this website is relevant and accurate.
What are Digital Wallets?
It is a very significant element of the digital world. As we do need a wallet in our regular lives, similar to that, we do need a wallet for online transactions. This is originally a software program, which allows you to keep your private and public key. It further cooperates with many blockchains and lets the user receive and send money in their wallet. You also have to audit the digital wallet. The records of transactions are merely maintained on the blockchains.
Types of Crypto Wallets:
The crypto wallet is divided into two categories, which are:
The hot wallet is almost the same as the wallet you carry daily in your pocket. It refers to the ease of accessing your cash. Moreover, this wallet is termed as “Hot Storage” and is sensitive with respect to security because it is connected to the internet.
The typical examples of hot wallet are:
- Desktop and mobile wallets
- Exchange wallets
- Multi-Signature wallets
In contrast to hot storage, cold storage or wallet is similar to a savings account. It is not useful in daily transactions. The important point is, it remains safe when both the storages are compared. The accessibility is restricted, but it is only for security purposes. You can save a significant amount of your funds in your cold wallet. This is entirely disconnected from the internet. This is what keeps it safe from all the high risks of viruses and hackers.
The typical examples of cold wallet are:
- Paper wallet
- Hardware wallet
How to Trade Cryptocurrency?
There are mainly five steps, which you can follow to trade cryptocurrency uncomplicatedly:
- Choose the most suitable cryptocurrency exchange with respect to its availability in your area, its payment methods, and safety.
- Make your account after signing up.
- Set your profile and prove your identity by providing your phone number. It doubles the security.
- Add payment methods for depositing and withdrawing money. You may select the exchange that has a credit card facility.
- Start trading according to the rules of your opted exchange.
- Take proper security measures by managing your private key (your password to open) and your public address (where others can send you money). Do not
Confuse their usage.
Is Cryptocurrency Profiting?
This is the question that people usually wonder before entering this market. To inform you, yes, it is profiting for all those who learn the tactics to trade and stay wise. As there is a huge competition in the local market, the crypto market is not yet thickly populated and is considered relatively new.
This is one of the reason that this market is not dominated by any institutional investors. Nevertheless, many people might be afraid of the high risks, which are associated here. But still, some of the seasoned traders enjoy the thrill of this wild market. It is in the hands of investors to make it a paradise for themselves.
This is a brief knowledge that you must have before entering to trade crypto. For further knowledge about brokers in your city/country and brokers regarding any particular cryptocurrency, you can visit the website mentioned above.