Categories
Cryptocurrency

How to trade cryptocurrency?

Introduction 

Because it is an extremely volatile asset, several investors like to trade cryptocurrency. Trading cryptocurrency can give you much higher returns if you can time the market right. It can be more profitable than traditional investments. 

Often, cryptocurrency traders have one of two goals: to make a profit in USD or accumulate Bitcoin. 

It is pretty easy in a crypto bull market for your portfolio to increase in USD value. But for Bitcoin value, it is more challenging to increase. 

You can trade altcoins against Bitcoin on exchanges like Coinbase pro to track your portfolio’s Bitcoin.

You can risk losing your crypto to the market by actively trading your cryptocurrency.

It’s not uncommon for traders to lose their money quickly trading cryptocurrency since its prices are so volatile. This is why several crypto enthusiasts just hold their Bitcoin.

Take a look at these five steps of trading cryptocurrency.

1. Make a cryptocurrency brokerage account. 

You will need to open an account with a cryptocurrency brokerage unless you already own it.

Some of the best cryptocurrency brokerages on the market are eToro, Gemini, and Coinbase.

All these three options provide a simple user crossing point and a diversity of altcoins to select from.  

You will need to provide your crypto brokerage with your identification details to open an account. It is the same as making an account with the stock brokerage.

When setting up your account, your social security number, address, date of birth, and email address are some of the common information you need to provide. 

2. Fund your account

You will need to connect your bank account once you’ve signed up with a crypto brokerage. 

Through wire transfers and debit cards, most crypto brokerages offer bank funding.

To fund your account, wire transfer is typically the cheapest option. It is because it is free on Coinbase and Gemini. 

3. Pick crypto to invest in.

Several traders of cryptocurrency allocate most of their capital to Ethereum and Bitcoin. So trading with technical indicators can be easier as these cryptos move more predictably than smaller altcoins. Several traders allocate a portion of their capital to smaller altcoins.

Even though small mid-market cap cryptos are chancier than large market cap cryptos, they provide higher upside potential.

In a matter of months, many small altcoins have risen to over 1,000, making them attractive savings for risk-tolerant savers.

4. Choose a strategy 

Most traders when buying and selling cryptocurrency, consider multiple factors. But there are plenty of trading indicators to choose from. 

You may need to consider purchasing a cryptocurrency trading course if you are new to investing.

You may have already had a strategy you use to trade if you are an experienced trader. For cryptocurrency, stock trading strategies are also commonly used.

Elliot Wave Theory is a personal favourite trading strategy that many traders use.

It works particularly well for speculative assets like cryptocurrencies. It is because it focuses on the psychology behind the market. 

5. Store your cryptocurrency

You will have to store your funds on the exchange to have access to them if you are actively trading your cryptocurrency. 

You should get a cryptocurrency wallet if you are buying your cryptocurrency to hold for the mid to long term. 

These wallets come as hardware wallets or software wallets.

Hardware wallets as they store your crypto on a physical device offline, offer the best security, but both are secure.

The great hardware wallet is called a ledger. Several investors trust to store their crypto assets on it. 

There are many options if you are looking for software wallets on Google chrome, Android, and iOS that are free to use.  

When it comes to cryptocurrency brokerages there are several options. But Coinbase is a great option for new investors. It has a free cryptocurrency conversion feature where you trade your crypto for any other token supported by Coinbase. 

Conclusion

Using the tips provided above, you can now safely trade on cryptocurrency. And as I stated, cryptocurrencies are digital assets that are powered on the Blockchain. This technology stores a ledger of every transaction of the cryptocurrency on each node.

how to trade cryptocurrency
Categories
Cryptocurrency

Is Cryptocurrency for you ? (or a Hoax!)

As with any other fringe product or service, there are many myths surrounding cryptocurrency. Cryptocurrencies aren’t just for computer geeks and drug dealers trying to avoid the government. Relieving yourself of these myths will permit the formulation of a more accurate opinion. It’s easier to make informed decisions when your knowledge is sound.

Myths regarding cryptocurrency

  1. Cryptocurrency is illegal. It depends on the country. It’s legal in the United States, but there are other countries, such as Canada, that have deemed it illegal. It’s unlikely the legal status will change anytime soon in the United States. It’s possible that it will become regulated, however.

  2. Bitcoin is the only relevant cryptocurrency. There are several other cryptocurrencies. All have their strengths and weaknesses. Bitcoin, released in 2009, is the oldest and most well-known of them. Most of the other cryptocurrencies are less than three years old:
  • Auroracoin
  • Blackcoin
  • Dash
  • Dogecoin
  • DigitalNote
  • Ethereum
  • Litecoin
  • Mastercoin
  • There are several others.

  1. Only criminals have a use for cryptocurrencies. While cryptocurrencies continue to be used for illegal activity, cash is still king for illegal transactions. There are reputable retailers that accept cryptocurrencies, including Microsoft and Dell.

  2. I can get rich with cryptocurrency. The potential for profits does exist. People have gotten wealthy through increases in the value of cryptocurrencies. However, just as many people have lost a tremendous amount of money, too. It might happen, but you’re unlikely to retire on your cryptocurrency purchases.

  3. Cryptocurrencies are fiat currencies. Most of them are. That’s true. But so are the Euro and the US Dollar. All major world currencies have abandoned a gold standard. The US decoupled the value of gold and the US Dollar in 1933. The value of all fiat currency is based on the willingness of the public to agree that it possesses value. For instance, In 2016 India announced that high denomination notes will cease to be legal tender from the next day. This created ruckus, with people not accepting money from the time of announcement, gold merchants refusing to see gold for money.
  4. The government can shutdown cryptocurrencies. The government could make cryptocurrencies illegal, but shutting down the system would be next to impossible. There’s no central server or location that houses a cryptocurrency system. The information is stored on the computers of every user.
  • Unless the government can find a way to shut down the internet, it would be challenging to put an end to cryptocurrencies.

  1. It’s easy to mine cryptocurrencies and make money. Entire companies have been built for the sole purpose of mining cryptocurrencies. It requires a tremendous amount of computer hardware and electricity to be successful. Unless you have several hundreds of thousands of dollars, you can’t even begin to compete.
  2. Cryptocurrencies are subject to hacking. Bitcoin merchants and wallets have been subject to hacking activities. However, Bitcoin itself has never been hacked. Other cryptocurrencies have similar security profiles. Insufficient security is always a potential problem with cryptocurrencies and cash. Protect your wallet and you should be fine.

  3. It’s impossible to trace cryptocurrency transactions. It’s not easy, but it can be done. Regarding Bitcoin, the blockchain ledger lists all the transactions that have ever occurred with Bitcoins. The challenging part is linking the wallet address with the owner.
  • With enough time and effort, the government can eventually track you down. The government has seized and auctioned off millions of dollars’ worth of Bitcoins.

Have you been guilty of believing these myths? It’s easy to be led astray. Cryptocurrencies still aren’t very common, and myths are easily formed and spread. Become more knowledgeable about cryptocurrencies. They might just be the wave of the future. They’re certainly becoming more popular each year. Comment if this post helped you!