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05.09.2018

How to start trading cryptocurrency

Picking an exchange

While you may have missed out on the fantastic bull market of 2017, it’s never too late to start trading cryptocurrency. No doubt you have probably heard stories about crypto millionaires – prudent investors who managed to buy bitcoin or altcoins before the massive crypto rush of late 2017.

It’s important to recognize that cryptocurrency is still in its infancy and that plenty of opportunity remains for those seeking to turn their own profit. This article is here to tell you that the industry is still growing and that it’s never too late to start trading cryptocurrency. In this definitive guide to trading cryptocurrency, we will explore the four steps necessary for getting started: picking an exchange, setting up a crypto wallet, and sourcing market analysis and news.

With over 1500 different coins and a combined market capitalization of $300 billion, it should be no surprise that people all over the world are getting into crypto trading. And while the learning curve may seem steep to those unfamiliar with crypto, the process is not meant to be difficult; in fact, anyone can do it. With a little knowledge, you can start trading cryptocurrency with confidence.

Similar to the traditional stock markets many are familiar with, crypto also uses market exchanges to facilitate trading. The first task for a budding crypto trader is to pick an exchange to trade on.  There are many exchanges out there, each with their own unique terms of service and reliability. Picking the right exchange is critical, as many suffer from unreliability or are generally untrustworthy. In fact, some exchanges have suffered from hacks that have lead to thefts of millions of coins. Others, more nefariously, have mysteriously shut down their operations overnight without explanation, leaving traders empty handed and at a complete loss. A good resource to begin examining different exchanges is Coinmarketcap, where rankings and fundamentals for almost everything crypto can be found.

Beginner traders should also decide how much personal information they are willing to share when registering for an exchange, as data security is a critical security issue for many. Many exchanges require large amounts of personal information. For instance, the San Francisco based exchange known as Kraken, requires government-issued ID, proof of residence, and signed application documents. On the other hand, there are a few exchanges that allow traders to trade anonymously, such as Xchange.me, that cater to those concerned with data security and surveillance. Xchange.me offers traders a fully anonymous, decentralized trading platform perfect for those concerned with privacy and security. Several other popular crypto exchanges include: Coinbase, Poloniex, CEX, Binance, and KuCoin.

 

Funding your account

Once you have decided on an exchange, you will need to register and fund your account with ether fiat or crypto. Once your account is funded, you can start trading cryptocurrency.

Be aware that some exchanges do not accept fiat currency, or money that has been declared legal tender by state governments, thus requiring you to deposit crypto coins into the exchange to begin trading. Fortunately, there are some exchange/wallet hybrids that allow traders to purchase and trade crypto all in one place, which leads us to the next step: choosing a crypto wallet.

Crypto wallets are tools used to store and send crypto between exchanges. As exchanges are the marketplaces where crypto is traded, wallets are secure tools where crypto assets are stored. Several types of wallet exist, such as mobile, desktop, hardware, and paper wallets. To get started, however, a trader needs to choose what is known as a hot wallet, one that is connected to the Internet.

Most cryptocurrencies have their official own wallets, although multicurrency wallets are often more practical as they offer storage for many different coins. Read more about types of wallets in our post “How to create a cryptocurrency wallet?” For the sake of simplicity, exchange/wallet hybrids are offered by providers such as Coinbase or Poloniex. While hybrid systems are practical all in one providers of storage and exchange, they often trade security for ease of use, and thus may not be suitable for everyone.

 

Sourcing market intelligence

The final step to start trading cryptocurrency is sourcing market analysis and news. Cryptocurrency is extremely volatile, meaning prices can change dramatically in a very short time. Volatility is triggered by many factors and forces crypto traders to keep up to date with market news and recent developments.

If monitoring market news is important, finding quality sources is critical. Many traders suffer by not studying up on their purchases or from failing to keep up with recent events. The best places to source information and market intelligence are reputable blogs such as Coindesk, Hackernoon, and Medium. There analysts and developers regularly post updates and analysis.

Of course, before buying anything, a trader should familiarize themselves with the coins they wish to trade. Understanding an asset is key to trading it successfully. Fortunately, several sites, such as Coinmarketcap or Cryptocompare, offer information on every available coin. Moreover, important news often breaks on social media channels such as Discord and Twitter, where traders can interact directly with developers and innovators of certain tokens such as EXCC. Important data to analyze could be market capitalization, trade volume, supply and demand, and liquidity.

In addition to cultivating general knowledge and understanding the fundamentals of the assets, traders also need to cultivate a disciplined trading psychology. Trading can be an emotional rollercoaster, as volatility rapidly forces prices up and down there is nothing worse than succumbing to our worst emotions and selling at a loss. Patience and discipline are important attributes that often separate the best traders from the worst.

In conclusion, to start trading cryptocurrency you must first decide on an exchange, find a wallet, and source market intelligence. These steps are offered as a guide but may be performed in any order. In fact, successful traders often begin by reading and absorbing as much market analysis as they can before they embark on their trading careers. As a final tip, remember not to trade anything that you cannot afford to lose. While traders are here to seek profit, they must also consider the possibility of losing it all. Thus risky behaviour such as borrowing money at high interest rates, investing all of your savings, or even borrowing money from family or friends is never a good idea. Only trade with what you can afford to lose. Good luck and happy trading.

Follow us:

https://twitter.com/xchange_me_
https://medium.com/@exchangecoin
https://steemit.com/@exchangecoin
https://twitter.com/EXCC_Team
https://t.me/cryptoxchangernet
https://www.youtube.com/channel/UCBws9hxnSXYv3NbxuHLuexg

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