How To Trade Cryptocurrencies Safely
In the previous article, you got a glimpse of the crypto world and what cryptocurrencies really are. In this one, I’ll take you through a few tricks of the trade when it comes to trading cryptocurrencies safely.
Cryptocurrency trading is similar to stock trading. Instead of buying, selling, trading, or investing in stocks, you do the same with the different cryptocurrencies. Right now, there are more than 14000 cryptocurrencies spread across 431 crypto exchanges.
So, if you’re a beginner, these many options and choices might be a tad bit overwhelming to you. Lucky for you, I’ve got a few simple factors you need to assess before you start trading in cryptocurrencies. Let’s jump right into it.
3 Easy Steps to Trade Cryptocurrencies Safely
Just 5 simple things to do, and you can debut into the crypto world to make your first trade.
Research The Cryptocurrencies You Want to Invest In
When I began trading, I was spoilt for choice. Of course, since then there are so many new crypto assets have emerged. So how do you choose the right assets? Well, do your research on the cryptocurrencies you want to invest in.
For instance, if you want to invest in Ethereum or Bitcoin, read about the team behind the project, the purpose it is trying to solve, and the tokenomics behind it. These would give you a clear idea about the motive of the cryptocurrency and how well it is supplying its volume and allocating it.
Usually, a crypto asset with no purpose or bad tokenomics is not sustainable in the long term and hence is a bad investment.
If you’re wondering where you can read about them, you can go to their website, which would describe the cryptocurrency project in detail, ideally along with its whitepaper and the roadmap for the future. You can also look at experts and their views on the assets.
With all this info, you can decide on which cryptocurrencies you want to invest in.
Research The Cryptocurrency Exchanges You Want to Trade On
Now that you know what crypto asset you want to invest in, you need to choose the exchange to perform the trades.
For this, a few factors that you need to keep in mind are:
● The transaction fee charged by the exchange per transaction. This needs to be lower so that it doesn’t eat into your profits.
● The variety of cryptocurrencies enlisted on the platform. The more, the merrier. This way, you can be exposed to different kinds of cryptocurrencies and create a diverse portfolio.
● How easily navigable the platform is. People who debut on exchanges usually find it difficult to understand what is where. So, it is necessary to have a beginner-friendly platform.
● How secure the platform is. Exchanges need to have the highest level of security. After all, they will be managing your funds. So, research what kind of security measures the team has deployed, how often they upgrade it, and what contingency measures they have in place in case of a disaster.
With these few factors, you can select the suitable cryptocurrency exchange with the assets you want to invest in while also providing the other facilities mentioned above.
Keep An Initial Trial Fund to Experiment
If you follow the above two steps, you’re almost there. However, you still haven’t experienced what it’s like to trade in real-time. When you do so, you’ll have many doubts, and there will be many errors you make.
So, give yourself that leeway. Keep aside a small volume of funds that you will use only for experimenting. This way, even if you incur a loss, it isn’t a big deal, and you can afford the loss.
So, explore different platforms, forms, and modes of trading, test the waters to see what works, what doesn’t, how the process goes on, etc.
Utilize this trial-and-error phase most efficiently, and you’ll gain a lot of insights into the world of crypto trading.
Conclusion
Thus, with these three simple steps, you can start trading on exchanges such as DHCOINX safely. While this is merely an overview, we can discuss how to buy and sell crypto assets on an exchange in the following article.