Cryptocurrency trading can be an exciting field to get into. It is ever-changing, always growing, and is practically non-stop. Price fluctuations can happen at any time, sometimes dramatically so. Trying to enter the field without any prior knowledge or hearing any tips beforehand can make for an overwhelming, and expensive, experience. Ideally, you should take the time to familiarize yourself with crypto trading before you spend a dime in the market. Following these tips can help make your venture into the world of cryptocurrency a success.
How to Choose the Best Crypto-Exchange
The first thing you should do is choose a cryptocurrency exchange. This is how you convert your traditional government-issued currency, or fiat currency, into crypto-coins. First, be sure you take the time to investigate the reputation of each exchange you are thinking of using. There are many out there with fantastic fees, great customer service, and a focus on privacy and security, so focus your efforts on finding one of these. Ideally, the exchange should be based in the same country as you, for ease of service and transactions. Another key step is to investigate the type of coin they are able to deal with. While coins like Bitcoin and Ethereum are quite popular across all exchanges, others, such as Monero, are not carried by all platforms.
Fees are another key factor to look for when choosing an exchange. While the cryptocurrency market does have lower fees, on average, when compared to other investment opportunities, each exchange does charge fees for transfers. In many cases, the fee is proportionate to the amount of security offered, with exchanges that offer more guarantees and protections for your currency charging fees around four percent and those that are less reputable charging as little as 0.2 percent.
Finally, be sure you are happy with the level of security offered by the exchange. It is rare to have an exchange get hacked, but it has been known to occur. To give yourself peace of mind, be sure that the one you choose has a good track record. If they have been hacked in the past, take some time to learn what steps they took to beef up security on their end.
What Things Should You Be Aware of Before and During Trading
Before you start trading, you should be aware of the price volatility that characterizes many cryptocurrencies. For example, if you hold $100 USD equivalent of Bitcoin in the morning, and do nothing with it at all, you may find that your $100 shrinks to $25 or grows to $250 all within the same day. This makes trading coins very time sensitive, so you need to be sure you have the time set aside during the day to instantly respond to market changes. Failure to do so could cause a big loss of money.
Never invest more than you can stand to lose. This is an important thing to remember before you begin trading and as you are in the process of doing so. Seeing a series of profitable trades can seem encouraging. However, due to the instable nature of the cryptocurrency market prices, it is a good idea to hold back instead of going all in.
How to Safely Withdraw to Your Personal Wallet
Withdrawing cryptocurrency to your wallet should be a process that you feel entirely comfortable with. This means taking the time to find a wallet provider you can trust. Check up on wallet developers online, spend time reading reviews, and choose the one with the best security and lowest fees. Be sure to keep your private key completely confidential for added security. Ideally, you should never keep more in your wallet than you need at any given moment, to protect the rest of your crypto assets.
A Few Simple Trading Strategies
There are a few trading strategies you can keep in mind to make things a bit easier, and more profitable. First, always stay on top of industry news, including the cryptocurrency projects currently in development. Never invest simply because you are worried about missing out but keeping an eye on these types of companies can help you identify the best big thing. Second, sell early. If a coin looks like it is peaking, sell. Do not wait around to see what happens. Finally, constantly study the market. Pick three or four coins, including ones you are not actively trading, and watch their progression. This can help you predict market changes while also giving you practice on how to monitor the volatile world of cryptocurrency.
Following the tips and strategies mentioned above can help ensure that your foray into the cryptocurrency market is a success. Remember to watch the market, have realistic expectations, and do your research.