Cryptocurrency has definitely had its moment to shine within the media as of late. You may be wondering or contemplating on the fact of possibly starting to trade yourself, but do not know where to start at all. Many proficient traders will agree that there is a process behind trading, from strategy, to software and trading bots. All of that needs to be taken into consideration, as well as the taxes that you will need to be aware of depending on the locality that you are based in.
Within our how to guide, you will learn how to day trade crypto, alongside all the facts that come associated around comparing brokers, apps and software and so much more!
How to trade cryptocurrency: In simple
You will first and foremost need to decide for yourself if you will be the trader who has a hunch on the projections i.e. of the value going up or down, or if you actually want to one the currency for yourself. Once you have decided that, you will need to figure out which exchange to go with. It may be so that you want to be a trader that speculates the price and value, meaning you will need to go down the route of a broker instead. Finding yourself an ideal broker is super important, as it will make or break your experience ultimately.
Once you have got past the stages we have listed above, it will all be about funding your accounting and then ultimately buying the cryptocurrency you want, based on the current prices now, to which you should then be open minded to the idea of trading, subject to the current prices and possible rise or fall. It is always advised that in preparation for everything we mentioned above, you could do well to activate a demo account in the meantime of you getting used to the idea of trading.
When you trade you will always be thinking and contemplating the price that is involved within the markets of cryptocurrency. For this reason, you will usually find that should you integrate within the brokers that offer forex and CFDs, it may be easier for an introduction to someone of a complete beginner. That is something for you to chew on and think about, as you continue to read through our passage and inform yourself more around the topic of trading.
How do you compare brokers?
When you opt to participate in trading, one of the biggest decisions you make in your crypto career, is the platform you decide to use to continue your trading and make it happen. This broker platform will be your digital wallet, and allow you to operate multiple cryptocurrencies at once. Before you dive in headfirst into the concept of having a broker, make sure you read and take into consideration all the factors that we have listed below.
When selecting a broker, you will have multiple side avenues that you can explore within your platform. For example, you may find that there are forex avenues within the platform, in addition to CFD’s-in addition to the multipliers within cryptocurrency multipliers. This provides possible leverage on risks and rewards that may come to follow. Meaning, knowing the difference between which platform offers such integrations, will make you open your day trading account and the overall experience, all the more different.
Having the right applications are everything when it comes to trading. You will find that the more you try to stay tuned in, the better you can keep track of huge events which may equate to a profit or a loss. Crypto trading means you need to act fast. That is inevitable here. This is the reason so many day traders nowadays, will use apps that give you the latest notifications when it comes to signals in the media, and any of the press that you think is relevant to follow. This will ensure that you are able to stay up to date, and ultimately be able to support yourself no matter what happens, by making the appropriate preparations, when it comes to you and your trading capacities on the daily. It is always best to stay prepared, right?
The application that you select will be yours to spend a considerable amount of time on, so it is important that you grow to feel comfortable with it, and that it ultimately suits your everyday trading needs. Some applications will offer you super in-depth platforms, with the appropriate educational background, that give you the support you need as a beginner. Others may be the complete contrast, and ultimately be more suited to proficient traders that know what they are doing, what they are looking for, and there may not already be an option to entertain a demo account either.
When you are selecting your broker, it is always appropriate to read up on reviews that are available online. Not all cryptocurrency platforms are safe and secure, meaning yes it may be possible that your account can get hacked and the actual currency being compromised from you. So it is better to be safe than sorry, as if it is hacked, it will be gone forever. A secure platform is always the best way to go about this. Many traders do not realise the importance that comes with making sure your trading software is secure. So, we suppose you may do, now that we have mentioned it.
Exchange offers and commission rates will affect the fee structure of the platform that you are trading with. For that very reason, you will need to be accountable for future trades and take into account the rates that may add up on you. You may be a low trader now, but in the future when you have the knack for things, your volume could very well increase and basically add up, super quickly on you. For that reason, choosing the lowest rates possible, always works out better in the long run. The following factors listed down below, are what will affect you and your cryptocurrency trading within a broker.
Exchange fees between the cryptocurrency software and the currency of coins that you will be trading with, will of course have a different rate. Therefore, make sure the currency you are operating with has a low rate-especially if you are only sticking to one currency in particular.
Yes, there can be trading fees too that can be associated with exchanges that you may make. A marker fee will be applied to the cost of making any offers that you wish to sell. The taker fee is the cost of you taking an offer from another person.
Deposit and withdrawal fees
There is no getting out of these, yet there will be ways that you can minimise them, by picking one broker over the other. You will find that it is cheaper to deposit, than it is to withdraw, but make sure you are mindful of the fact that not all exchanges will allow certain payment options. Each payment method will also have their own charges, for example debit cards will come with a 4% charge on top of your exchange. Because the broker platforms need to make way some profit for themselves, in allowing you to use their platforms in the first place. Makes sense?
After reading everything we have to say about brokers, make sure you don’t make your decision lightly. It is important to consider everything we have mentioned, alongside multiple user reviews, that have had some experience with the broker platforms too. They should most definitely fill in the blanks on the things you may still be questioning about overall.
Trading for beginners
Now, we have come to the actual trading part of what you will need to consider. After you make the decision on the broker and platform you wish to go to, the next step is actually understanding the process and mechanical process involved in trading. To actually be successful, you need to be comfortable with the following factors listed below:
Know your market research
Believe it or not, it is not just bitcoin that is on the rise, Ethereum, Litecoin amongst certain others such as Zcash, Das and Ripple, are ones that you should keep your eye on. If you do your research and stick to consistent homework, you should definitely be super on top of everything.
Of course, trading brings a lot of volatility. One minute it is up, the next minute it is down. Cryptocurrency has a name for that in the market, and within a moment’s notice currency value of crypto, can go from $3000 to $1000 without any warning. If you’re investing more than what you are getting, you will of course be super annoyed and bummed out from such a dramatic decline and drop. But being that it constantly goes up and down, you are set to get a potential profit too, which is always something good to look forward to. That is why if you are looking to get more than what you are willing to spend, investing when its value is down is the best way to go about it.
Know your block chain
The technical complexities are not needed to be known super in depth. However, a basic understanding would work to your advantage massively. Especially, when it comes to price movements and the continuous movement of blocks. It is cryptography that secures you the interactions you need to store publicly.
Where to store your cryptocurrency?
To store your cryptocurrency, is probably a question that you have in your mind right now, right? Well, there are many wallets that are available for you to research, Bitmex being a great example for beginners that want to get great rates. But research the market and find new information across the comparison sites available out there.
When you get right into it, you will need to increase your understanding of how to attain profit margins with the most minimum in losses. Of course, that is easier said than done really, isn’t it? So, for that reason, we recommend that you look into utilising news outlets, to help drive your decisions. Alongside this, performing technical analysis is another imperative that you need to include within your path forward. Studying the metrics, alongside past historical price charts are key to your future success. When you look at the number of wallets versus the active wallets in trading volume, that should allow you to predict currency value and make better predictions.
Being that digital markets are pretty new, you will find that many governments are still scrambling together, in trying to decipher the firm taxation rules to go forward with it. Currently, many countries are classing trading and investors falling under the property umbrella. So, conforming to the reporting requirements of that is key, should you want to prevent bother further down the line of your efforts.
Key things you need to know
When you pick your broker platform, that will set you up for the rest of your career in crypto trading. You need to consider the fees and the user experience when using it, so by reading platform reviews, you should be able to come to a conclusion on the potential of each one you come across. Make sure, you educate yourself as you grow into the element of trading. You will come to understand that the education of strategies and new methods will continually grow, and never stop! You need to embrace that you hardly know anything and this is your moment to continually grow, without holding back at all.
Technical analysis should be imperative towards your trading, as it will play a huge role towards projecting those profit margins in the future and stopping you from losing more than what you are willing, from your wallet. Last thing we will mention is, keep on top of your taxes within your region. They are subject to change, so it is your responsibility to hit it right each and every time! Posted by Myhardwarewallet on April 18, 2021 in Crypto, Trading