Despite a lack of third-party involvement, cryptocurrency is booming. It is a highly volatile asset class yet is powerful enough to entice traders worldwide. It has the potential to make you a billionaire overnight if you time the market correctly.
Alternatively, if you rush into the immense pool of the crypto world without proper execution, you will most certainly lose more than you can afford. Here’s a quick guide to jumping on the crypto bandwagon for a handsome return.
Quick Guide to Crypto Trading
Crypto trading is not like stock trading, yet both carry the same level of risk. But then again, no quick money-making mechanism is risk-free. Hence, before taking the risk, you must get your finances in order, such as setting up an emergency fund, maintaining debt under control, savings, etc.
Otherwise, you will make a significant loss, even your livelihood. No, I’m not here to terrify you but urge you to be responsible. If you trade responsibly, you can minimize the risk and make a lot of money.
I emphasize you educate yourself on the fundamentals of cryptocurrency. After that, you may commence your crypto trading journey by following the steps described below.
1. Choose the Top-Rated Crypto Exchange
If you are entirely new to trading digital coins, the first thing you need to do is create an account with a cryptocurrency exchange platform. Crypto exchange platforms facilitate the trade of digital currencies in exchange for other digital assets. You may even use fiat money to buy cryptocurrency on exchanges.
In simpler words, cryptocurrency platforms act as a middleman between crypto buyers and sellers. They assist with your cryptocurrency trading in return for transaction charges and commissions.
The top crypto exchange boasts a simple user interface, assists you with multiple strategies to trade easily irrespective of the bear or bull market, offers a variety of altcoins to pick from, is legitimate, and offers a variety of features. A cryptocurrency exchange platform must also be incredibly reliable and respectable. It is best to check the information offered by OKX to get a better idea.
2. Open a Trading Account
Once you decide on a platform, sign up for it. To open it, you must submit personal identification information. Details include your residential address, date of birth, social security number if you are a United States resident, email address, and other relevant KYC information. After submitting all the necessary details, your crypto trading account will be activated.
3. Fund Your Account
After successfully opening a cryptocurrency account, the following step is to link it to your bank account. Typically, crypto trading options accept bank funding via wire transfers or debit cards. But I suggest you should consider wire transfer funding. It’s because it is less expensive than funding through debit cards.
4. Choose a Cryptocurrency to Invest In
Now that you’ve funded your account, choose a cryptocurrency to trade with. Please do not make the mistake of investing just in Bitcoin and Ethereum.
I understand that they appear to be the most lucrative and tempting to you. Moreover, these are more predictable than other cryptocurrencies since technical indications make them easier. But the crypto market is highly volatile. You don’t know which digital coin will outperform the other in the future.
It is best to diversify your crypto portfolio. I strongly advise choosing small to mid-market cap cryptos. I understand they are riskier, but they also provide a higher return. So, make an informed decision.
5. Plan Your Strategy
No matter how dependable the trading platform is, how profitable the crypto coin you invested in is, or how well you time the price of specific crypto, it will all be nothing if you do not plan strategically. There are several trading strategies to select from. These strategies include high-frequency trading, scalping, day trading, dollar-cost averaging, range trading, build-balanced portfolio, etc.
Each crypto strategy has its own set of advantages and disadvantages. Therefore, you must try and test several ones until you discover the one that works best for you. Stick with it for future crypto transactions when you find the right one. Once you have picked a strategy, stick to it to ensure success. You will always have a gut feeling to deviate from the plan, which might also work at times. However, it is best to stick to the strategy.
6. Start Trading in Cryptocurrency
Do you have a crypto account? Check. Do you have funds in your crypto account? Check. Do you have several digital coins in consideration to invest in? Check. You are now all set to begin crypto trading. But you’ll need a plan for that, and the ideal one is to let your trading platform automate it for you with bots.
Simply input your crypto trading objectives into your trading platform. The trading platform will deploy the bot to execute the best trading strategy based on your goals, ensuring the best returns.
7. Safely Store Your Digital Coins
If you are making a long-term investment, you will need to keep your digital money safe. For instance, if you purchase Ethereum to hold it for a longer duration to earn higher returns, you must also buy an Ethereum wallet. Using the non-custodial wallet, you may buy, store, transmit, and trade Ethereum safely.
There are two types of wallets for every cryptocurrency: software wallets and hardware wallets. Software wallets store your digital money online, whereas hardware wallets keep them offline in a USB-like device.
Software wallets are vulnerable to hacking, whereas hardware wallets are vulnerable to losing. Hence, you risk losing your digital currency in either case. You may, however, avoid the risks associated with hardware wallets if you exercise caution.
Starting crypto trading is simple. However, it may not be as successful or profitable if you are unfamiliar with the fundamentals of cryptocurrency, accessible techniques, associated risks, and provincial laws. So, before engaging in crypto trading, it is essential to educate yourself on these topics.