Cryptocurrencies let you exchange them for goods and services, just like conventional money, or trade them for profits. However, unlike conventional money which is issued and controlled by governments, digital currencies are decentralized and there is no single entity that controls their issue.
The first cryptocurrency to be created was bitcoin in 2008 by a mysterious person or group going by the name Satoshi Nakamoto. Bitcoin’s introduction was only the beginning of an influx of a myriad of cryptocurrencies, all launched with the aim of replacing bitcoin. All those other currencies that came after bitcoin are today known as altcoins – alternatives to bitcoin.
Today there are over 5,000 cryptocurrencies circulating in the market, and more will come up. After bitcoin, the second largest and popular cryptocurrency in the world today is Ethereum. Ethereum is especially popular because of its products such as decentralized finance (DeFi) and non-fungible tokens (NFTs). Read more brians club.
Crypto investing vs. crypto trading
As you learn how to buy and sell these digital assets, you need to differentiate what is cryptocurrency trading and what is investing in cryptocurrencies. Which one is better? No matter the differences, in the end the goal is always the same: making a profit. However, the expected outcome times are quite different: in investing, the outcome time ranges from medium to long term, while in trading, it ranges from the short to medium term.
Cryptocurrency investors buy and hold their assets for a long time ranging from several months to years. On the other hand, cryptocurrency traders hold their positions ranging from a few seconds, to several weeks.
This article will guide you on how you can start trading cryptocurrencies as a beginner.
A beginner’s guide to currency trading
The first step in cryptocurrency trading is to find a suitable cryptocurrency trading platform and create an account. Different cryptocurrency traders have different needs and goals when it comes to trading. Fortunately, there are a variety of trading platforms to choose from on the internet. There are various factors to consider before choosing a platform such as security, ease of use, number of assets supported and many others.
After selecting a reliable platform, the next step is to create an account. Most platforms will provide you with a registration form to complete. You will need to enter a valid email address, choose a strong password and then click register. You will then be required to verify your account: an email will be sent to your address with a code that you use to verify your account.
After successful verification, the next step is to deposit your initial capital and begin your cryptocurrency trading journey. There are several methods of depositing funds such as credit/debit cards, Skrill, bank transfer, etc.
Trading cryptocurrencies might sound simple. However, there are many factors that determine whether you will be successful or not. Cryptocurrency trading is not a get-rich-quick scheme, but a wealth building and income generating method that requires discipline, patience and skills. Here are some tips to help you become a good cryptocurrency trader:
- Do your researchThe crypto market is a vast market with different protocols of trade. Therefore, it would be best if you understood the market from your point of view. Your research should include the crypto exchanges, cryptocurrencies, and platforms for trade. Be wise to check the pros and cons of investing in such a diverse market. Once you are convinced with the information gathered, you can progress to trading.
- Practice different trading strategiesThe crypto market is volatile, and it changes daily. So there is no better way to understand the market than to start trading the same assets. Dummy accounts help with the practice of how the actual market operates. There are multiple dummy accounts online for different coins. Pick the tab that best serves your interest. Read briansclub cm
- Pick a cryptocurrency and start trading.There are about 7,000 cryptocurrencies in circulation in the current market. Pick a crypto currency based on the criteria of performance and its longevity in the market. You want to trade a currency that will offer you reasonable returns in the long run. As a beginner, avoid trading initial coin offerings (ICOs) because you do not know their success rate or how legitimate they are.
- Diversify your investmentsAs the saying goes, “do not put all your eggs in one basket” and this rule applies in digital assets as well as stocks. Investing in digital assets can be lucrative but, likewise, the possibility of total loss come in equal measure. Diversifying across several altcoins helps you to cut your losses in case one cryptocurrency drops in price.