Secrets and recommendations
Trading on cryptocurrency exchanges is becoming increasingly popular as digital assets are still classified as “new and unknown” instruments. If in Australia already more than 70% of the population have an idea of what cryptocurrency is, then in our country more than half of the population only remotely heard about it.
Discovering new opportunities for generating income, newcomers to cryptocurrency exchanges plunge headlong into trading, not understanding its details. The result of this approach is the same – they burn out, disappointed in cryptocurrency as a mechanism for making a profit. And often they also become a victim of scammers.
Of course, the basic rule of trading can be reduced to a commonplace one: “Buy cheaper, sell more expensive”, but the question is how to find out when the value of cryptocurrency falls and when it grows. You will need to learn the basics of trading, as one of the main rules of the investor says: \”Do not go there, what you do not understand.\” And cryptocurrency trading can be called investment to some extent in the short term.
In order to become a cryptocurrency trader, you need the following:
- Choose the exchange that you will use to bid.
- Choose the cryptocurrency pairs you are going to trade.
- Conduct an analysis of the selected cryptocurrencies, study the growth and decline graphs of their value, as well as examine the current situation on the market.
- Go deeper into trading tools and strategies to increase trading efficiency.
Consider these details in more detail.
Choosing a cryptocurrency exchange for trading
By analogy with the stock exchanges, cryptocurrency trading is carried out on specialized platforms – cryptocurrency exchanges. According to Coinmarketcap.com, there are 227 cryptocurrency trading platforms, but in reality there are many more. When choosing, you should pay attention to the following criteria:
- Cryptocurrency exchange reliability;
- Simplicity of the interface;
- The need for verification;
- Features of deposit and withdrawal of funds;
- Supported cryptocurrency pairs.
The choice of a cryptocurrency exchange can even be called individual in a sense, since it all depends on how convenient the interface and features of the work are for you personally.
For example, the Binance cryptocurrency exchange takes the top position in the Coinmarketcap rating in daily trading volumes. The exchange does not require verification if you do not plan to trade in large volumes. For beginners, a good solution, given that registering is quite simple, and more than 200 currency pairs are offered for trading.
Of course, against the background of the pros, there are also disadvantages. The exchange does not support fiat money, so you will have to replenish it through other cryptocurrency accounts or exchangers. Someone such difficulties can scare.
For those who want everything to be completely simple, there is Exmo exchange, founded by a team of developers from the countries of the former CIS, and the company’s registered address is registered in London. The interface is in Russian, registration is not difficult, and with small trading volumes verification, again, is not required. In addition, the cryptocurrency exchange works with fiat money, and you can replenish your account using the popular payment systems Webmoney, QIWI, etc. Among the shortcomings, only support for a small number of cryptocurrencies can be singled out, so the exchange is located outside the TOP-50 rating in terms of trading volume.
! It is also important to make sure that you go to the cryptocurrency exchange website, and not to fraudulent websites whose interface is designed as a copy of the popular cryptocurrency exchange!
Choosing cryptocurrency pairs for trading
Returning to Coinmarketcap.com, today there are more than 2,000 cryptocurrencies, so it’s clear that they will not be used in trade. It is necessary to select the most promising pairs. And there are a number of secrets.
- Beginners should choose pairs that include cryptocurrency and fiat currency or stablecoin (stablecoins are cryptocurrencies whose value is supported by fiat, precious metals, etc.). Accordingly, the fiat currency or stablecoin exchange rate is more or less stable, therefore it is easier to conduct analytics. Popular options for beginners are BTC / USD, ETH / USDT, etc.
- In addition, the currency pair must be actively traded on the market so that the trader can make an instant purchase or sale transaction without wasting time.
- The importance of having a large quantity of supply and demand is also explained by the resistance to high rates. Large players do not have a serious impact on the value of cryptocurrencies that are actively traded on the market, not to mention those altcoins, whose offers are much smaller.
In addition, remember that trading is always a risk, like any type of investment, so it is recommended to start with small amounts.
Studying the market situation and cryptocurrency charts
Of course, it is impossible to accurately predict when a particular cryptocurrency falls, and when it grows, it will not work, however, it is necessary to study the general dynamics of the market in order to understand what events can lead to a fall or, conversely, cryptocurrency growth.
The first category includes all kinds of legislative prohibitions and restrictions, the collapse of the stock market, as well as the depreciation of Bitcoin, which is followed by other cryptocurrencies. The increase in value can be caused, on the contrary, by legislative approval, various agreements, updated platforms, etc. Therefore, traders need to be aware of cryptocurrency news, and it will be better if.
Charts of changes in the value of specific cryptocurrencies can be associated with certain events, understanding for yourself in which cases we should expect a fall, and in which – growth.
Such work does not guarantee 100% success, however, knowledge in the industry and the ability to conduct analytics are very important for the trader. In addition, there are various strategies for both beginners and professional traders.
At the initial stages, it is recommended to buy cryptocurrency at the moment of approaching the minimum values or at the beginning of low growth, when the cost is significantly lower than the average. Selling is carried out when the rate approaches maximum values, but if active growth is observed, then there is a probability of breaking through the maximum boundaries.
It is noted that on average traders earn about 100% profit per month, but for beginners this figure often does not exceed 50%.
The advantages of trading as an investment tool
Trading as an investment in the short term is beneficial from the point of view of possible profit in any scenario – whether it is a drop or an increase in value. However, in the early stages, there is a high probability of losing money, so it is recommended to study on small amounts. It is also important to develop yourself in a professional way, namely, to read specialized literature, listen to the opinions of experts, learn all kinds of strategies, since you can become a successful trader only with a professional approach. Amateurs very quickly lose money and are disappointed.