The popularity of online trading created a lot of opportunities for new digital solutions and innovative assets, including cryptocurrencies that were initially created,as a way to safely transfer funds over the internet without relying on any financial institution.
They are basically designed to allow users to send and receive money online without any intermediaries. They are completely decentralized and based on blockchain technology, which means the factors that impact the market supply and demand of crypto will also impact the value of the specific cryptocurrency. The decentralized nature of cryptocurrencies also shaped the volatility of the market and their money-making potential.
Before you create an account on any trading site and start trading, you need to have a good crypto wallet. The crypto wallet can be anything from a hardware wallet to a hot wallet which can be a web wallet, desktop wallet, or mobile wallet.
If you choose to trade with your hot wallet, you should be aware that your crypto funds will be stored on a third-party server. However, there are trading sites that integrate crypto wallets on their platforms and allow you easy access to your funds. There are some trading sites that have integrated their own web wallets, but you can also choose to store your crypto funds on a crypto wallet of your choice.
If you pick a desktop wallet, for example, they are considered the safest option when it comes to crypto trading because they are downloaded on your device, and you can still access crypto funds on your computer.
However, they are not as convenient for crypto trading since you need to have access to a computer to trade online. This is why mobile wallets and wearable tech in general have gained traction in recent years, as they are mobile application installed on your smartphone or tablet that allows you to trade on the move and even use your crypto funds for offline payments.
Before you create an account on an online trading site, you need to do research and register on a reliable platform like this UK crypto exchange. As the market is decentralised you can find and compare hundreds of different crypto trading platforms and many new ones emerge all the time. However, it’s equally important to do research and create an account on a trading site that is safe.
Pick a Cryptocurrencies
As there is an ever-growing number of over 20,000 cryptocurrencies on the market, it’s a really challenging task to narrow down your options. Therefore, our best tip is to do your research and learn as much as possible about the crypto project through white papers, online resources like Crypto Daily, as well as public info. It’s equally important to compare the data available on the cryptocurrency and the price movements based on the conditions in the market in order for you to have a better understanding of future trends.
Many crypto investors choose to allocate most of their capital to major cryptocurrencies on the market, like Dogecoin, Litecoin, Bitcoin, and Ethereum. They are considered more stable than new projects due to their market capitalization and also have been around for a longer period of time, so you have more data available to conduct a technical analysis. The next best option is small to mid-market cap cryptos, which are deemed riskier than large-market cap altcoins, but they have the potential to grow quickly based on the market conditions.
When you’re trading online, it’s important to be aware of the latest market trends because various factors can instantly change the position of certain assets. One example would be Bitcoin halving, which is an important event not just for the crypto community but also for other crypto users.
Since the crypto market is decentralized, different factors also have the power to shift the position of certain cryptocurrencies, like tweets from a big crypto influencer, for example. This is why it’s really important to be notified when new changes happen in the market because you want to be able to make good decisions about your portfolio quickly.
If you have previous experience with online trading but with other cryptocurrencies, then you can apply some of your skills in crypto trading. However, keep in mind that the crypto trading market is the most volatile market compared to traditional trading sectors like the example, stocks or even forex. This is why you need to have a good trading strategy that will help you keep track of your investments and also make appropriate changes in your portfolio.
For example, a lot of traders choose a position trading strategy, especially if they have invested in large-cap cryptocurrencies like Bitcoin. They will hold their position for a longer period of time with the hopes of earning high ROI when the market enters a bull market phase. But there are also other investors who choose to buy cryptocurrencies low and sell high.