For nearly two decades now, cryptocurrencies have changed world as we once knew it. The inception of cryptocurrency aroused mixed reactions among people. The optimists saw the numerous opportunities that came with it while pessimists branded it as a tool that promotes various vices in society.
After several years of being in the market, more people have expressed their trust in digital currencies. Consequently, the number of people who trade cryptocurrencies rose significantly. Many who familiarised themselves with trading cryptocurrencies became multimillionaires within a short period. This led to the massive movement of trading crypto that has now spread all over the globe.
Every day, more people are showing interest in this knowing the novel world of trading crypto. However, the majority of people are unaware of where to begin. To help you avoid unnecessary confusion that may end up killing your passion for this new area, here are some vital things you should know about trading crypto.
Steps To Trading Cryptocurrencies
Step 1: Opening A Cryptocurrency Brokerage Account
The first step of getting into the world of crypto trading is joining a crypto brokerage platform. Nowadays, you can find numerous brokerage companies. Some of the most popular ones include Gemini, Coinbase, and eToro among others. These platforms have been created with a simple user interface which makes it easier for beginners to start buying and trading various altcoins.
The requirements of opening a brokerage account vary from one company to the other. Some platforms are stricter than others, requiring detailed personal information. Some of the information you'll be asked to provide includes your name, date of birth, personal identification number, address, etc.
Step 2: Funding Your Account
Once you have chosen and opened the crypto brokerage platform of your choice, your next step is connecting your bank account. It would allow you to deposit and withdraw funds between your brokerage account and your bank.
A good number of brokerage account also allow their customers to fund their accounts through debit cards and wire transfers. Typically, wire transfers are the cheapest way of transferring money to your brokerage account.
Step 3: Choosing Your Asset
The best way to start trading cryptocurrencies is by choosing the ones that are mostly traded. In essence, Bitcoin and Ethereum are the most popularly traded cryptocurrencies. They usually have a higher 24-hour trade volume than the other altcoins.
Although mid-market cap altcoins are somewhat risky, they offer lucrative returns of over 1000% in a matter of weeks or months. However, caution should always be taken when investing in such assets.
Step 4: Selecting Your Preferred Trading Strategy
To be profitable in trading cryptocurrencies, you'll have to learn various trading indicators which you'll use to create a strategy. It's always advisable to start with the basic indicators such as simple moving averages. It would give you a lot of exposure and learn the basic psychology of the market.
Step 5: Storing Cryptocurrencies
Another crucial aspect of trading cryptocurrencies is storing them. Cryptocurrencies are usually stored in wallets which are either in the form of software or hardware. Hardware wallets are usually more secure since they aren't susceptible to hacking. Thus, if you're planning to have a lot of crypto assets, be sure to store them in a hardware wallet. Ledger is the most popular hardware that is currently available on the market.
Cryptocurrencies have changed the financial landscape of the entire world. It has also opened numerous doors of opportunities, giving rise to new business. Many people have also benefited from trading altcoins which have earned them lucrative money. If you're planning on starting your trading journey, be sure to follow the guide provided above.