This new educational article is all about equipping you with knowledge and skills in cryptocurrency trading.
We shall delve into the beauty and the beast of crypto trading and answer the question of whether the venture is for everybody.
We intend that you, as our reader, will have more beauty experience with cryptocurrency trading rather than the beast after reading this article.
We intend to teach you some best practices to use in your venture into the market.
What is Cryptocurrency?
Cryptocurrencies are virtual currencies that serve a wide variety of functions depending on their make-up and are secured using cryptography.
Created in 2008, Bitcoin is the original cryptocurrency in the world, and it assumes the design of a virtual form of money, which is also known as payment cryptocurrency.
Today, a majority of the 2,000 plus cryptocurrencies in existence in the world share the same virtual money attribute as the number one cryptocurrency.
However, since the launch of Bitcoin, other virtual assets have come up to perform different roles.
Virtual assets such as Ethereum, NEO, and EOS are known for their ability to create decentralized applications or DApps while allowing other crypto projects to create their virtual assets within their platforms.
For instance, there are over 180,000 virtual tokens in existence today that wascreated using Ethereum’s platform.
Many virtual currencies perform different roles in allowing users to access certain features and functionalities of a platform.
By possessingand utilizing some of these utility tokens, users can interact with certain platforms to gain some form of monetary value.
Stable coins, privacy coins, and forked coins are some of the other forms of cryptocurrencies that we will not look at this particular time.
What You Should Know Before Commencing Cryptocurrency Trading
No need to worry as there are only a few things beginners need to know about cryptocurrency trading before jumping into the trading waters:
- A cryptocurrency exchange platform is not the same as a regular stock exchange platform. There are different crypto exchange platforms in the market today, but our desk advocates users to use either Coinbase or Coinbase Pro for their trading activities.
- The crypto market is extremely volatile. Potential traders and investors should stand advised that they can make a fortune in a minute and lose all their monies in the next, whether they trade Ripple, Bitcoin, or any other coin. Users should consider mitigating risks and not going all the way with their investable funds.
- Make rational decisions before trading. Trading in virtual assets can be a stressful task; it is best to make decisions based on reason rather than emotions. Trading choices that are based on emotions, fancies, and whims tend to fail, leaving the trader or investor sad and miserable. It is advised to do proper research on the market volatility before settling on an asset to maximize your trading profits in the long-term or the short-term. Users are also encouraged to consider choosing a reputable company that offers exchange and wallet services to its users to help keep the process simple.
- A beginner should also consider trading stable and prominent virtual assets such as Bitcoin and Ethereum before going deep into the crypto market.
The process of buying virtual assets is simple and straight-forward, but there are a few things beginners need to do before buying crypto assets.
- Sign up on a Crypto exchange platform such as Coinbase to create a virtual currency wallet where you can store your virtual assets securely.
- Connect your virtual wallet to your debit/ credit card or your bank account to exchange virtual assets into and out of your fiat currency.
- Purchase your preferred crypto asset.
- Sell your crypto asset at a good price and ensure you make a profit from the venture.
- Repeat the process over and over again until you strike it rich.