3 Key Factors Always Keep in Mind While Trading Crypto
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Trading in Cryptocurrency: A New Future
While relatively new, the acceptance of cryptocurrency has increased dramatically since 2009. The decentralized aspect of cryptocurrency has attracted a lot of attention from the Millenials and has aided it to become what it is now. With less hassle and the use of innovative technology, trading crypto seems to be the new trend. The quick rise to riches, dramatic fall in wealth, volatile trading, and skyrocket growth trends – all indicates to cryptocurrency being the next big thing.
However, before you make a trade, you must conduct extensive research on the type of cryptocurrency that you want to trade, the process itself, and the selection of an appropriate trading platform.
Types of cryptocurrency:
With the ever-growing market, there are more than 1000 different types that can be found in regards to cryptocurrency. However, the oldest and most popular cryptocurrency to date is bitcoin (BTC). You might have heard how bitcoin trading initiated the start of this digital era. Some of the other types are –
If you are a beginner in trading crypto, then you must focus on the more active and popular cryptocurrencies. It is better to start with the known ones and then venture when you have gained enough insight into the market.
What is Cryptocurrency Trading?
Trading in cryptocurrency involves either buying and selling cryptocurrencies or simply speculating over the market via a CFD account. The difference between the two is massive. The former is quite easy to understand. To buy or sell cryptocurrencies, you must make an exchange account on any one of the trading platforms. Then, you have to convert your fiat currency to the cryptocurrency available on the platform and make the trade. You can then store the currency in your wallet.
But, if you are a novice interested in making trading in crypto, then it is advisable to simply speculate over the movements of cryptocurrency prices in the market. Due to CFD trading being leveraged, you only have to pay a small margin to gain access for speculation of the underlying market. Then, you can either go long (which is essentially selling) or go short (this is buying).
For example,you are speculating over the position that is equivalent to 500 Samsung shares. With CFD, you only have to pay about 5% of the total cost of the shares to initiate your trade. Now, if you predict that the shares are going to rise and it does, you earn a profit. But, if it goes down, you encounter loss. The profit or loss is assessed based on your position.
How to choose a correct cryptocurrency trading platform?
Before embarking on the journey of trading cryptocurrency in India, you must find a suitable trading platform. Whilst there are several out there, you must find the one that satisfies your needs. But, on your search, you must take a look at the most basic aspects before choosing one.
Choose a platform that offers tight security. Take note of how many security features they employ. This includes asking for ID verification, 2-step phone verification, etc.
The platform must support various cryptocurrencies. Also, check out the exchange rate and compare it with other platforms.
Check out the credibility of the platform by going through the comments and reviews of the users who have attained their services. You can look into Reddit, Facebook, Twitter, etc.
How to initiate trading?
After you have accumulated some cryptocurrencies, you need to find a suitable trading platform. Extensive research must be done before making a final decision. For example – trading bitcoin in India is easier as this crypto is available on most of the platforms.
You must make an exchange account with them. After verification and other procedures, you can start the cryptocurrency trading.
- For instance, BitXmi is one of the trading platforms that have gained massive popularity since its inception in 2018. Within this short period, the trading platform has focused on enhancing security and architecture by partnering with ChainUp.
- BitXmi allows users to purchase crypto with the use of payment and credit cards.
- The security aspect of the cold wallet, private key management, and multiple servers are prioritized.
- They also use a plethora of tools to ensure that no fraudulent activity takes place there.
Studying charts and graphs:
If you are new to the world of trading cryptocurrencies, then technical analysis and complex jargon are bound to leave you baffled. But, it is essential to know about the various charts and graphs that are related to the rise and fall of crypto.
On the first look, it seems impossible to even grasp the concept. But, as you study andspend adequate time in understanding the various graphs and charts, you will find it comparatively easier.
Some of the charts, graphs, and terms that you must be aware of are listed below.
- The Dow Theory
- The Japanese Candlestick Charts
- Relative Strength Index
- Technical Analysis
- Cryptocurrency Market Cap
The Crypto market, although fairly novel,is here to stay, with promises of great potential in it. The risks associated with trading crypto are quite significant due to the presence of very few consumer protection laws. Trading in crypto has indeed given rise to many unexpected millionaires. But, caution must be excised in the form of thorough research before investing your hard-earned money. Also, keep in mind that the market is extremely volatile before making any trades.
Disclaimer: Bitxmi News is a news portal and does not provide any financial advice. Bitxmi's role is to inform the cryptocurrency and blockchain community about what's going on in this space. Please do your own due diligence before making any investment. Bitxmi News won't be responsible for any loss of funds.