Getting started with trading cryptocurrency isn’t as hard as it seems. It just takes a little bit of attention to detail. The main things that you need to understand are when to do what and who’s involved in the process. It all comes down to knowing how to trade, what to look for in a trading platform, and the importance of starting small.
So, if you’ve been thinking about investing in cryptocurrency but making the jump to get started is a little intimidating, it’s time to throw those fears aside and start trading with the help of this guide.
1. Decide what way you want to Trade cryptos:
The first step is to decide how you want to trade the tokens. You can either buy them on an exchange or use a CFD to make more specialized trades.
- If you’re buying, the process is simple. Find an exchange that offers your token, deposit some funds into it, and buy it. To buy the coins, you have to create a trading account on any reliable trading exchange that enables trading in cryptocurrencies. You can choose genuine platforms like Bitcoin Loophole which is a reputable trading platform.
- If you’re using CFDs, it’s slightly more complicated. First, you need to know what a CFD is. This can be done by reading a broker’s website or by looking at their terms and conditions. Next, you need to find out if they offer your token. This can be done by searching their websites for phrases like “CFD trading” or “CFD trading platform”. So, if they are offering, you can open an account with them and start trading!
2. Learn About the Crypto Market:
The next vital thing after getting your cryptos is to gather knowledge about the market. It is normal to be excited about trading cryptocurrencies but at the same time, you have to know the pitfalls of the market and have to be careful about the process.
Risk management and proper storage procedures are great examples of the things you have to learn here because if you don’t have the right plans for a bad situation or the right storage for your digital assets, your crypto venture’s going to go belly up in no time at all.
We’d also advise taking a little time to get a feeling for the volatility of the crypto market and if not predicting it, following a professional analyst who can give you a better idea of how the market’s going.
3. Open an Account:
Most people choose to trade through an exchange instead of a CFD, so that’s what we’ll be talking about here. Trading through an exchange is different from the standard HODL strategy your crypto friends will have told you about. You’re not trying to cash in on long-term appreciation, but instead, capitalize on short-term rises in price by buying low and selling high.
To get started with that, you’re going to register and open a cryptocurrency trading account with the trading platform. You can store the cryptos you’re buying and then sell them when the price rises. The advantage of using the exchange for storing the crypto you’re buying is that you don’t have to transfer your crypto from an offline wallet to your exchange every single time.
4. Develop a Trading Plan:
After you’ve opened an account, the next step is to develop your trading plan. A trading plan helps you deal with market volatility as well as decreases the financial risk you’re taking with your crypto ventures.
To be more specific, a trading plan is an outline of your goals combined with your risk management tools. A good example of a risk management tool is auto-trading software that automatically sells your assets when the token starts badly falling in price.
5. Open Your First Trading Position:
The last step on your journey to becoming a cryptocurrency trader is to open your first trading position. You can do this by either depositing or withdrawing funds from your account.
When you deposit money into an exchange, it will be credited as a cryptocurrency that you can trade with. Once you have deposited funds into an exchange, then you can start trading with those funds immediately.
Withdrawing funds from an exchange is just like depositing except that instead of receiving money into your account, you are sending it out of your account.
So, you’ve officially learned how to get started with becoming a cryptocurrency. The thing is, though, that you’ve only started. There are still miles more to go before you can say you’ve mastered it, and there’s a lot to learn, so always be on the lookout to learn more about the world of cryptocurrency.