When you hear the word market trading, it might sound like it is a thing that is reserved for the financial elites. But as cryptocurrency grows, it is also accompanied by the growth of online trading platforms and currency changes where anyone could take part of, all you need to do is how to learn how the system works.
Also, the value of cryptocurrencies has been increasing for the past years. In fact, bitcoin or BTC has grown from $997US per BTC to over $11,000US per BTC. With such growth as this in the market trading, it helps currency to keep growing.
Before trying crypto, you might want to consider forex trading. It is quite similar to cryptocurrency trading, but instead of cryptocurrencies, you would be selling and buying local currencies. Forex is short for Foreign Exchange market, which is why it is a global market for trading currencies. Players that use forex trading ranges from large financial organizations that are managing millions of dollars, to individuals who are trading for only a few hundred dollars. There is a big community of Forex Traders around the world, which newbies can benefit a lot. If you want more details, you should check Paul’s guide: forex trading for beginners
But if you are set on trading crypto, let’s begin.
Related readings: What are Initial Coin Offerings?
4 Things You Should Know Before Trading Cryptocurrency
There are only a few things that you need to know before trading when you are a beginner. And listed below are the most important things that you should know before you get started:
- It Is Not Part of the Regular Stock Exchange
We would suggest a broker/exchange Coinbase, but you can also a related GDAX, which is the pro version of a Coinbase with lower fees. However, neither of these are the same as the Wall Street and of course, its exchanges.
- Beginners Might Prefer Trading Cryptocurrency Stocks
At the stock market, GBTC is a trust that owns BTC and then sells shares of it, by trading like this you can avoid trading cryptocurrencies directly. This 2018, the main Bitcoin stock is the GBTC.
However, be aware that the GBTC trades only at a premium, meaning purchasing bitcoins are much cheaper than purchasing GBTC trust shares, which isn’t really ideal. Also, the cryptocurrency trading market works for 24-hours, while the traditional stock market is limited.
- Use Coinbase
For beginners, the simplest way for you to buy, store, and sell coins are by using Coinbase. However, you can only store, buy and sell Ethereum, Bitcoin Cash, Litecoin, and Bitcoin on Coinbase. But if you are really serious about trading cryptocurrencies, you’ll have to need another exchange, such as the Binance, GDAX, Kraken, or Bittrex. You might also want to look for a virtual wallet where you can store your coins in.
- Cryptocurrency Market is Very Volatile
You can make a lot of profits in a moment and then lose it all at the next whether you trade another coin, the GBTC Bitcoin Trust, or Bitcoin. Therefore, you should consider mitigating risks, hedging, and not staying long with your investible funds.
Here’s a tip for you, if you only trade with your top coins by the market cap, or by the GBTC, there is a slim chance for you to everything overnight. It is not impossible, but the chances are slim. Other types of cryptocurrencies are much riskier, but they offer much quicker gains during a good day.
Getting Started by Trading Cryptocurrency with Coinbase.com
If you think that the starting process for trading cryptocurrencies is hard, but it isn’t, it is actually quite simple. But, there would be a few notes that are important to your understanding of the market. Here’s what you need to do:
- First, you need to sign up for Coinbase.com so that you can create your own currency wallet. This is where you can securely store your digital currencies.
- Next, connect your debit card, bank account, or credit card to instantly exchange your collected digital currency into your local currency.
- Now, you can start buying your Litecoin, Bitcoin, and Ethereum. This is by trading US dollars for cryptocurrencies.
- After that, you can sell your Litecoin, Bitcoins, and Ethereums, which is by trading your cryptocurrencies back to dollars.
- You can consider signing up for other exchange, and then by trading one cryptocurrency into another type of cryptocurrency. This way you can transfer it back to Ethereum, Litecoin, or Bitcoin, back into the coinbase, and then back to your local currency. Don’t forget to record your transactions for the tax man, and to improve the conditions on tax implications.
How to Choose the Best Cryptocurrency Platform
There are certain things that you need to consider for you to be able to choose the right platform. And since you can’t get started trading with crypto’s without a cryptocurrency exchange, you’ll need to find one as soon as you can.
Choosing a cryptocurrency exchange platform can be quite a confusing and overwhelming task, especially if you are just a beginner. But to help simplify things for you, we have listed the most important factors that you should look for.
Here’s how you can choose the best platform for you:
Before you sign up to any platforms, you should first find out if the exchange has an office that you can verify too. It would be best for you to choose an exchange that is available in your country. This is mostly for your convenience and security.
Ethereum and Bitcoin are the most popular cryptocurrencies existing. Not only do they good exchange, but they also provide an option for you to trade or purchase by using other types of coins.
Because of the decentralized nature of cryptocurrencies, it is important for exchanges to have strict security to ensure your coins are safe, not only by not losing them but also from unquestionable transactions and unscrupulous individuals.
Listed here are just a few of the things that you need to know before you choose your own platform.
You can easily make a profit by trading cryptocurrencies, but only if you know how the market works and how you can do it right. Therefore, it is important for you to make several types of research on how you can get started and how you can use the trading system, while also making sure that the coins you’re gaining are protected.