What Is Cryptocurrency Trading And How Do You Get Started?

Are you wondering what Cryptocurrency trading is? Rest assured, you have come  to the right place and your fear of missing the “Next Bitcoin” will finally end. In  order to understand what Cryptocurrency trading is, we have to know what  Cryptocurrency is.

Cryptocurrency, also known as Crypto, is a form of digital currency that makes use  of encryption algorithms in order to process payments. Unlike traditional  currencies, Crypto is decentralised this means that it does not have a regulating  authority. Like any other currency, Cryptocurrency can be traded and the  popularity of Cryptocurrency trading is ever growing. For some lucky few, it has  led to early retirement and great riches. This guide will explain how  Cryptocurrency trading works and how to get started.

What Is Cryptocurrency Trading?

Cryptocurrency trading is the buying and selling of digital assets in order to make a  profit. This all based on block chain technology, which keeps record of all  transactions and ensures transparency.

Pick Your Crypto Broker Or Exchange.

A Crypto broker is a financial intermediary used to exchange different  Cryptocurrencies or exchange Cryptocurrency for a fiat currency, such as USD,  Euro, GBP, etc. They are the intermediaries needed to exchange your money for  Cryptocurrency. Crypto Brokers are ensure safe and legal transactions and protect  buyers against scams.

On the other hand, Crypto exchanges are platforms where Crypto traders trade  directly with other Crypto traders without the use of a third party. Crypto

exchanges are generally better for dealing with small amounts of money, whereas  Crypto brokers are better for dealing with larger amounts.

Fund Your Account.

To start your Cryptocurrency journey you will need capital, as you cannot buy or  sell anything without it. So now, you should start to save up where ever you can.

Choose Your Trading Platform.

Trading platform is where the actual buying and selling of Cryptocurrencies  happens. Most Crypto broker exchanges have their own trading platforms, which  are freely available to anyone who registers.

There are many trading platforms out there, so it’s important to do your research on  the benefits and tools that they may have and see which one is ideal for you.

Decide On Which Cryptocurrencies to Trade

When choosing the right Cryptocurrency to trade, there are multiple factors to  consider. We will briefly explore a few of them, such as market capitalisation, and  use case.

Market capitalisation is the total value of the of the Cryptocurrency. It’s calculated  by multiplying the number of Cryptocoins in circulation by the current value of the  Cryptocoin. In general, the smaller the market cap, the more volatile the price will  be.

Use case is how the Cryptocoin will be used. Cryptocoins with a strong use case  and demand for their services are more likely to increase in value overtime. People,  businesses, and organisations tend to use and acquire coins like this, resulting in an  increase in value. For example, if a there’s new Cryptocoin created with the  intention of solving a problem, it would be a good idea to invest in it.

Create A Trading Strategy.

A trading strategy, a plan that is followed to execute a trade (buy or sell). These  plans have a criteria for what trades to make, how to make them, and how much  capital you should use. A well-designed trading plan is essential when dealing with  Cryptocurrencies

You are now ready to be a Crypto trader.

This has been a brief overview of how Cryptocurrency trading works. You know  have a basic idea of how people get started and the processes involved. I hope that the confusion you was cleared up and you understand what Cryptocurrency trading  is.

Disclaimer: This content is informational and should not be considered as  financial advice. The views expressed in this article may include the author’s  personal opinions and do not reflect The Crypto Basic’s opinion. Readers are  encouraged to do thorough research before making any investment decisions. The  Crypto Basic is not responsible for any financial losses.