What Is Crypto Trading?
Can you do more with your digital assets than hold for price appreciation? Yes. With crypto trading, investors can buy and sell cryptocurrencies at predetermined intervals. The most popular cryptocurrencies include Bitcoin and Ethereum, but there are also 7000+ other cryptocurrencies you can trade. This process is risky, but thankfully, there are several indicators from which you can understand the market’s direction and make informed decisions on your purchases.
How Does Cryptocurrency Trading Work?
It is usually done via an exchange (crypto trading website) or peer-to-peer systems. If you are using an exchange, you can either buy a long position (you predict that the price of the digital asset will go up) or buy a short position (you predict that the price of the digital asset will go down). To further amplify your position, you can use leverage, but the caveat is that as much as leverage amplifies your profit, it can also amplify your losses.Â
How to Trade Crypto
There are a few steps to follow before you start buying cryptocurrencies. In addition to these steps, a good interest in knowledge is required too.
Register on an Exchange
The first step is registering on an exchange. Some exchanges like Redot make trading easy and secure and also allow traders to have access to derivatives.
Fund Your Account
After you have opened an account, the next step is to fund your account. This can be done via fiat currencies (for exchanges that allow fiat) or through peer-to-peer transfers.
Pick a Crypto to Invest In
The next step is to buy cryptocurrency. The choice of exchange will determine the type that is available to you.
Place Your First Trade
After you have your cryptocurrency, you can start to trade. Some exchanges allow automated trading, while others allow you to copy the trades of adept traders.
Store Your Cryptocurrency
Exchanges are primarily for trading, not for storing crypto. You will need to transfer your crypto from an exchange to a cold or hot wallet. Thankfully, for some people, this step is not necessary as several exchanges have inbuilt wallets.
Popular Exchanges
Coinbase
Coinbase is one of the market-leading exchanges. Although there is a low barrier to entry, its fees can be burdensome.
Redot
Redot is an EU-accredited exchange. It is ranked amongst the best crypto trading websites, and the exchange couples ease and modern security to protect users’ crypto. Redot’s customer care is another noteworthy part of the exchange. With quick, round-the-clock response time, it is worth trying out.Â
Crypto.com
Crypto.com is one of the best websites for day trading crypto. It is a good exchange for traders who want to do more than buy-and-hold. The exchange features zero fees and is available as both website and app versions.
Gemini
Gemini favors both new and adept traders. It has enough resources to get people started with investing and also has advanced tools for those interested in using them.
FAQs
How Can You Best Trade Cryptocurrency?
There is no best way to trade cryptocurrency, but using a registered exchange gives more confidence. Factors like available liquidity, fees, and security should also be considered.
Can You Make A Profit From Crypto?
Yes. With a good knowledge base and reasonable use of leverage, crypto trading can be profitable. This doesn’t mean there will be no losses, but traders should ensure they make more profits than losses.
Key Takeaways
- Bitcoin and Ethereum are the two most popular crypto, but there are also 7000+ other ones in the world.
- Exchanges are primarily for trading, not for storing crypto.
