Cryptocurrency trading is a whole new market that’s quite similar to stock and Forex trading, and yet has several notable differences to make it a unique asset.
If you’re interested in giving cryptocurrency a go, here’s a quick primer and reference for you.
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Where Can I Buy and Sell Cryptocurrency?
Gaining a foothold in the crypto market is definitely easier compared to stock trading. You won’t need to hire a broker to get involved- you just need to find a good crypto exchange online.
A cryptocurrency exchange is an online hub where cryptocurrencies get bought and sold. There are lots of them on the world wide web. However, you will need to pick one that has high security and is versatile.
You may need to register an account, verify your identity and then link a preferred payment method to get started. After that, pick a crypto you like, then exchange fiat currency for it.
What Trading Techniques Can I Use?
Chances are, if a technique for trading other assets has worked for you before it will work in the crypto market.
Everyone has his or her own preferred trading strategy, and this boils down to how much time you have and your goals for entering the market.
Day trading is a fast-paced trading strategy where actions are completed in minutes, hours or days, while HODLing is a long term method where you keep a relatively stable ‘coin for months or years.
Each method will have its own pros and cons, but you’ll need a tool like bitcoin bank software to tell you when the time to sell your digital asset is nigh.
Do I Have to Pay Fees?
The answer is mostly yes. However, the fee amount will depend on the crypto exchange you’re using.
Trade fees in the cryptocurrency market are much lower compared to ones in stock trading and Forex. You’ll probably survive making a few trades a day as long as you factor in the fees. If you want to keep more than your share you can minimize the number of trades you make to a few per day instead of every hour.
What are Good Cryptocurrencies to Invest In?
The answer depends on your goals and what you want out of the investment.
Because Bitcoin is the most popular cryptocurrency and its value is rising you should spend a portion of your capital to acquire it as an asset.
It’s generally a good idea to spread your capital to several cryptocurrencies. For long term holding it’s better to pick stable ‘coins and ones that have been around for a long time as opposed to new and upcoming tokens. When day trading or swing trading you should look at new cryptos and those that are volatile.
Also, choose cryptocurrencies that you think will last and those whose functions you like. Make sure to put your profits in a crypto wallet for safekeeping, and don’t bite off more than you can chew, money-wise.
Lastly, learn from your mistakes and don’t follow rumors and speculation.