In the last few years, cryptocurrency trading has become a massive trend. The volatility of cryptocurrencies can prove to be an advantage when people are able to time the market right and they can enjoy much higher returns, as opposed to traditional investments. There are usually two goals of cryptocurrency traders; accumulate the cryptocurrency they buy or to make profits through buying and selling. There are a number of cryptocurrencies out there that you can trade, with Bitcoin being the most popular, considering it is the pioneer. If you are interested in investing in this space, you need to learn how to begin. Here are a few simple steps that you should follow:
Step 1: Sign up with a crypto broker
Unless you already own some cryptocurrency, the first thing you need to do to start crypto trading is to open an account with a broker. Nowadays, there are plenty of crypto brokers working in the blockchain industry and you can do your research and choose one that seems like a good fit for you, depending on their features, offerings and reputation. You will be required to provide some personal information to open your account and deposit funds to start buying and selling cryptocurrencies.
Step 2: Fund your account
After you have signed up with a selected crypto broker, you will need to connect your account with your bank. Most brokerages give their clients the option of using their debit and credit cards, along with wire transfers. Some crypto brokers are also adding support for online payment options to make it more convenient for their users to add funds.
Step 3: Choose a crypto to invest in
This is one of the most important decisions you have to make. As mentioned earlier, there are numerous cryptocurrencies that you can trade nowadays. Most of the active traders in the market allocate majority of their capital to the two leading options i.e. Bitcoin and Ethereum. As they are more predictable than smaller altcoins, trading them can be easier. However, there are plenty of smaller altcoins to explore as well and you can invest a little bit of capital to them too.
Here, you will find a lot of variety and the best part is that these altcoins also have substantial potential to grow, which means that you can expect to make some solid returns, as long as you choose right.
Step 4: Select a strategy
When you are buying and selling cryptocurrency, there are a horde of indicators that you can choose from and different factors that can be taken into consideration. You can take some time to learn about the various strategies that can be used for trading cryptocurrencies. The risk tolerance and trading style of every individual is unique, so you have to take yours into account before you choose any strategy. You can also use strategies that you have used for trading other instruments like stocks of foreign currencies. But, you need to be cautious because cryptocurrencies tend to be more volatile than any other instrument in the market.
Step 5: Store your crypto
If you are trading your cryptocurrencies actively, you will have to store them on the exchange you are using in order to be able to access them easily. But, if you decide to hold onto the bought cryptocurrency for the mid or long-term, it is a better idea to open up a cryptocurrency wallet for keeping your assets. It is not safe to leave them on the exchange for a longer period of time.
You can find both software and hardware wallets and while both offer security, the latter are a better choice in this regard because they store crypto offline in a physical device. You can easily find trusted crypto wallets and choose one of them for your storing needs.
Follow these steps and you will be able to start cryptocurrency trading easily and tap into the market’s potential.