Cryptocurrency trading is a new and exciting form of investing. It has become popular among those looking for greater returns than what traditional investments can offer. There are a lot of resources online that can help you, like, the Dan Hollings-The Plan Review. As with any investment, there are risks involved. But if you know what to do and how to manage your risk, you should be able to grow and protect your assets as well as enjoy the opportunity for high yields that cryptocurrency provides. In this article, we will outline a step-by-step guide on how to start trading cryptocurrency.
Step 1: Open an account with a cryptocurrency exchange
There are currently more than 100 exchanges offering their services in cryptocurrency trading. Choosing the right one is crucial when it comes to your money security and efficiency. There are two main types of exchange:
Trading exchanges – allow you to trade cryptocurrencies for fiat currency (USD, EUR, etc.) or other cryptocurrencies. You can place buy and sell orders on those exchanges. These platforms make it easy for one to buy or sell cryptocurrencies on their platform. Their fees vary from 0% to 0.25% per transaction, depending on whether you’re a maker or taker, and can be as low as 0%.
Cryptocurrency wallets – only allow you to buy and hold cryptocurrencies without any option of selling them back into Fiat currency at a profit or loss.
Step 2: Choose the right account type
Some exchanges require you to provide extensive personal information. However, some let you stay anonymous. If anonymity is important to you, make sure your exchange allows you to do so. It’s also good to look for an exchange that has low or no fees and high limits.
Step 3: Take a crypto course to enhance your trading skills
This is important, as it can potentially save you thousands of dollars and a headache. There is a multitude of courses on different aspects of cryptocurrency trading, including ones about the basics and more advanced techniques. When searching for a course, look for one with practical knowledge that can be easily applied in practice.
Step 4: Deposit your fiat currency into an account on the cryptocurrency exchange
Check that the amount you want to deposit is not more than the daily limit for transfers into that exchange (usually 2-3k EUR, no limits for USD). Also, make sure there are no fees involved in depositing money (and there never should be). Once the money is transferred onto your account, it can be used to trade cryptocurrencies.
Step 5: Choose a trading pair and buy some cryptocurrency
Most exchanges offer many different trading pairs: BTC/USD, ETH/EUR, LTC/BTC, etc. It’s up to you which one (or more) you want to buy. Some cryptocurrency exchanges only offer trading within pairs, which means your money can be locked into that market for a long time if the price of the pair doesn’t go up or down. If this happens, don’t panic – it’s just a normal market fluctuation and if you’re patient, the price should revert to normal. Keep in mind that some exchanges have higher daily limits than others, so double-check.
Step 6: Check your new crypto wallet
Your exchange isn’t very wise if they didn’t ask for some ID verification before letting you trade large sums on their platform. But now’s your chance to prove them wrong by transferring some funds from there onto your newly created wallet on another exchange. Always do your research on the service before deciding to use them – there might be security issues with some exchanges, so make sure you only trust one that has good reviews and no history of hacking or other malicious activities.
Step 7: Sell your cryptocurrency for another type
Exchanges should offer a wide variety of trading pairs, which means you should have plenty of options when it comes to selling your cryptocurrencies at a profit (or loss) and withdrawing the profits back into your bank account as FIAT currency. Just remember that if you’re selling high volumes of cryptocurrency, fees can become quite large due to those “low” 0%–0.25%/transaction rates offered by exchanges.
Step 8: Withdraw your FIAT currency from the exchange
Depending on who you bank with, this step might be a bit more complicated than it should. Sometimes banks refuse to process cryptocurrency payments and it might take a while before they fix their systems to allow this type of transaction. However, once you have your funds ready in your bank account, you can always feel free to take advantage of cryptocurrencies’ ever-growing popularity by spending some of that money on the wide range of goods and services available for purchase online.
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