A Dynamic Introduction to Cryptocurrency Trading
Cryptocurrency trading is the act of speculating the prices of digital currencies. Since it also involves purchasing digital currencies, holding them in a wallet, and expecting to sell them at a higher price to profit from the right speculations or price appreciation.
This article provides a comprehensive guide on digital currency trading. It shows how cryptocurrency trading works and the best altcoins to trade. With also highlighting the importance of trading signals and sheds light on other important pieces of information that will aid your Cryptocurrency trading.
Best Cryptocurrency Alt for Trading
Bitcoin is unarguably the most popular digital coin. Therefore, it is also the most tradable Cryptocurrency, thanks to its position as the first recognized digital currency.
However, several other digital currencies aside from Bitcoin, commonly known as altcoins, are tradable too. Some of the best alternative coins to Bitcoin that you can invest in are:
1. Ethereum (ETH)
Ethereum is often rated by crypto enthusiasts as the best crypto alt. Since the Ethereum blockchain is the foundation for Decentralized Applications (DApps) and Smart Contracts, two incredible Ethereum blockchain applications. Thus, it is a decentralized software platform for creating life-changing applications.
The multiple uses of the Ethereum blockchain are responsible for the growing interest in this digital currency as the best alternative to Bitcoin. Hence, it is also the driving force behind its increasing popularity among cryptocurrency investors.
2. Polkadot (DOT)
Gavin Wood created Polkadot as an alternative to Ethereum. The former member of the Ethereum project charted a different future for the Polkadot project. A special proof-of-stake powers Polkadot. This unique digital currency delivers interoperability between the wide ranges of blockchains behind the cryptocurrency industry.
Polkadot system provides a platform for developers to create individual blockchains while using Polkadot’s chain’s security. It currently has a market cap of over $26 billion and a DOT (its currency), which sells for $28.81 while writing this piece.
3. Bitcoin Cash (BCH)
Bitcoin Cash (BCH) has been around for years and is undoubtedly a leading alternative to Bitcoin. It is a Bitcoin hard fork and is one of the most successful Bitcoin forks.
BCH was created to correct one of Bitcoin’s shortcomings: scalability. While the Bitcoin network can only handle one megabyte on its block, the BCH block size is 8MB. However, the argument is that the bigger block size enables the digital coin to handle more transactions per second, making it a faster cryptocurrency than its parent: Bitcoin.
At a current value of $596.98 and a market cap of approximately $11billion, Bitcoin Cash is a digital coin that deserves any investor’s attention, one of the best crypto alt.
4. Stellar (XLM)
Stellar is a popular cryptocurrency in the financial sector. Since it was designed to ease the challenges associated with the traditional transaction processes. Thus, financial institutions use it extensively for large transactions, driving its popularity among users.
For instance, huge transactions required several intermediaries and took days to complete. The combination of these factors made such transactions not only expensive but time-consuming. Thanks to Stellar, banks and other financial institutions can effortlessly process transactions without intermediaries.
Stellar’s intervention is a cost-cutting alternative to the expensive traditional transaction processes. No wonder that cryptocurrency investors consider investing in this digital currency a smart move. Its market capitalization currently stands at $12.6 billion, and its coin is valued at $0.56.
5. Ripple (XRP).
Ripple serves duo purposes. Aside from being a digital payment network adopted by financial institutions for financial transactions, it is also a cryptocurrency.
Jed McCaleb and Chris Larsen created Ripple. Digital currency removed the challenges of traditional financial transactions. Ripple’s impact on the financial industry is why this digital currency always makes the list of the best crypto alt.
This digital currency supports fast transactions. It only takes between 3 and 5 seconds to complete transactions conducted over its decentralized blockchain. Therefore, Ripple users don’t need intermediaries for their transactions. The absence of a third party is one of the underlying factors behind its swift transaction process.
While Ripple has a market capitalization of about $1.5 billion. You can purchase a Ripple coin for just $0.5720.
Selling at just $30.63 per coin or LINK, Chainlink is another cryptocurrency for investors aside from Bitcoin. It’s a little over $12.4 billion in market capitalization notwithstanding, this digital currency is rated among the best digital currency for investors.
Chainlink was designed to bridge the gap between outside data and Smart Contracts. Smart Contracts are executed through their decentralized oracles because the coin ensures communication between the outside data and Smart Contracts. Its support for Smart Contracts is the underlying factor behind its wide acceptance by digital coin stakeholders.
7. Moreno (XMR)
Monero is a unique cryptocurrency. Since aside from being private and secure, it is also untraceable. Therefore, the currency has gained massive recognition and patronage since its launch in April 2014 because it focuses on scalability and decentralization,
Through its “ring signatures” technique, this crypto coin ensures users’ complete privacy, one of its selling points. You can purchase a Monero coin for just $216.16 and contribute to its market capitalization of over $3.8 billion.
Since its launching in 2011, Litecoin has gradually lived up to its reputation as a worthy alternative to Bitcoin. Since the digital coin, created by an MIT graduate, Charlie Lee, is powered by a global payment network whose proof of work is a scrypt.
Although it shares several similarities with Bitcoin, Litecoin boasts of a faster transaction rate digital coin. Its incredible processing speed is due to its superior block generation rate. The faster processing power and other features make it the preferred coin for merchants and developers.
Currently, Litecoin has a market capitalization of over $13.8 billion, and an LTC is available for $213.43.
9. Tether (USDT)
Tether is a reputable member of the stablecoins. Stablecoins are digital coins that offer both payment privacy and instant processing features. Therefore, Tether and other group members gained immense popularity as they overcome the dramatic volatility that is the hallmark of Bitcoin and some other major coins.
Thus, this digital coin allows users to combine the power of a blockchain network. And their technologies to transact in traditional currencies without struggling with the complexity and volatility that are the trademarks of digital currencies.
One of the top three crypto coins by market capitalization. You can purchase a USDT for $1 and be a part of the currency’s over $31 billion market capitalization.
10. Cardano (ADA)
Cardano is another digital currency created by a former team member of the Ethereum project. Ably supported by mathematicians, engineers, and cryptography experts, Charles Hoskinson co-founded the digital currency with a blockchain that is considered more powerful than the Ethereum blockchain.
Cardano was designed as a decentralized financial product that will serve as the world’s financial operating system. Although it has a long way to achieve its objective, Cardano is still a digital currency with growth potential. Cardano’s current price is $0.8862 per coin. And has a market capitalization of almost $27.7 billion.
Cryptocurrency Trading Guideline
You can trade Cryptocurrency in two ways. That through a broker or an exchange. Trading digital currencies through a Forex broker requires that you purchase a Contract for Difference (CFD). The CFD allows you to speculate on the future of the digital currency you invest, commonly known as the underlying asset.
Your speculation’s outcome determines whether you will make a profit or not on your asset. Note, however, that when trading CFD, you don’t own the asset. This is the primary reason why many Crypto traders steer clear of trading digital assets via Forex brokers.
Alternatively, you can choose the Exchange option. Trading through Crypto exchanges gives you control over your asset. You can hold the asset for as long as you want and trade it off at your convenience.
After deciding on the trading option you are comfortable with, follow this step-by-step guide to start your cryptocurrency journey:
1. Visit any of the trusted exchanges and open a trading account.
2. Subscribe to any of the supported eWallets to store your asset.
3. Credit your brokerage account from your bank.
4. Use the deposited fund to buy any digital coin of your choice and store them in your wallet. Some exchanges allow you to buy a cryptocurrency with a bank transfer or your credit/debit card.
5. Sell the coin at your convenience.
Best Cryptocurrency Exchanges
Most traders prefer trading on Cryptocurrency exchanges. On these trading platforms, they have access to tens or hundreds of digital coins to purchase. However, to spare you the stress of choosing a crypto exchange, this is a list of the top 10 best cryptocurrency exchanges you may check out and patronize:
Some of the best cryptocurrency exchanges where you can trade your digital asset with ease are:
Binance was founded in July 2017. A year later, the Malta-based exchange built a reputation for itself as the world’s largest digital currency exchange per trading volume. Since then, it has retained its number one spot among the best cryptocurrency exchanges over the year.
Binance offers traders a mobile app for ease of trading. Hence, downloading this app on your mobile gives unrestricted access to the exchange. And the tens of digital coins available for trading. The easy accessibility will enable you to trade any coin at your convenience. And that anywhere, at home, in transit, or while enjoying your vacation thousands of miles away from home.
The ease of accessibility is in addition to the massive number of tradable cryptos supported by the exchange. Thus, traders can always trade any of their preferred digital currencies on the platform. Some of its exciting features include exchange coin (BNB), margin trading, an API designed for efficient and easy means of integrating your trading application into the Binance platform, and a host of others.
Poloniex was founded in 2014. The Seychelles-headquartered crypto exchange offers over 100 cryptocurrencies for trading. While it offers some attractive features such as lending, margin trading, and staking.
The popular cryptocurrency exchange makes trading a lot easy for its users. Thus, traders on the exchange can trade on several platforms such as Websocket, web, HTTP APIs, iOS, and Android.
Coinbase is another cryptocurrency exchange that meets the growing needs of crypto traders. Headquartered in Francisco, California, Coinbase was founded in June 2012 as one of the leading names in the cryptocurrency exchange industry. Investors can purchase the leading crypto coins such as Bitcoin, Ethereum, Bitcoin Cash, and several others from the site. While they can also sell off their assets via the exchange.
Coinbase helps traders stay on top of the crypto market through its Coinbase app designed for iOS and Android devices. Once you download the app on your device, you have the whole crypto market on your palm. Therefore, trading on the exchange is easy and stress-free. And, some of the benefits of trading on Coinbase are insurance protection, secure storage, availability of tons of tradable assets, and more.
Bisq is an exchange that uses its open-source desktop software and peer-to-peer network to support private and secure cryptocurrency trading. The no-registration trading platform is decentralized and allows instant trading without going through a rigorous identity verification process.
Bisq is also a safe exchange. It doesn’t hold traders’ funds but deposits the fund in 2-of-2 multisig wallets for optimum security. They guarantee traders’ privacy by storing their data on local disks, not a central server. Therefore, it ensures that you can start trading within 10 minutes. Download the app and add your cryptocurrency or national account. Once you are done with that, take an existing offer or create a new one. The user interface provides a step-by-step guide that will help you finalize each trade effortlessly.
Coinmama is a legendary cryptocurrency exchange. This leading exchange platform allows traders to buy and sell their chosen crypto coin with a debit card, credit card, or bank transfer. Therefore, its millions of users drawn from all walks of life can attest to its efficient services since it came on board in 2013. While aside from debit and credit cards, Coinmama accepts other payment options such as bank transfer or Apple Pay.
On Coinmama, traders can purchase an array of digital coins that include Ethereum, Bitcoin, and other altcoins. The icing on the cake is the instant delivery the exchange offers, without requiring a deposit. The exchange will deliver your coin as soon as it confirms your wallet address and payment.
About a decade ago, some Cryptocurrency experts created Kraken. They hoped to use the exchange to meet the growing need for cryptocurrency platforms that support easy trading. The exchange is operational in some 180 countries and 48 U. S states. Therefore, making it one of the most popular crypto exchanges in the cryptocurrency trading community.
Kraken helps newbie traders master the art of digital currency trading by providing helpful resources that will take them through the trading process. And with the aid of the exchange’s Resource Center, you will learn the basics of digital assets trading, a crucial step to your success as a cryptocurrency trader.
The exchange also prioritizes traders’ investment security. Hence, Kraken stores the digital assets in cold wallets, some of the most secured wallets for digital coins, to prevent cybercriminals from accessing investor’s assets,
Building a Cryptocurrency portfolio with Gemini exchange is a great experience. It is a secure platform for digital currency trading. However, your trading status notwithstanding, Gemini has the right trading tool for both beginners and experienced crypto traders to help them sell or buy any cryptocurrency. Security-wise, Gemini is on top of the game. Gemini is certified for operation by the crypto exchange regulatory bodies. Hence, it has both SOC 1 Type 2 and SOC 2 Type 2 SOC certifications.
Through WebAuthn, a hardware security key, Gemini ensures that traders’ accounts and assets are secured. It also provides insurance coverage for all the cryptocurrencies held in their exchange wallet, making it one of the world’s most security-conscious digital currency exchanges.
Founded in 2017, KuCoin deserves a place among the best cryptocurrency exchanges for digital coin enthusiasts. The exchange reportedly supports 25% of the world’s crypto holders. Ripple, KCS, Litecoin, Ethereum, and Bitcoin are some of the scores of tradable digital currencies for traders. Hence, with a reported over 733 million trades, KuCoin is a leading name in the crypto exchange business.
Thanks to the KuCoin website and app, traders can trade digital assets with ease. Either you are at home or not, you can always invest in any digital asset of your choice. Download the app on your mobile device. And trade any of the scores of supported digital currencies.
eToro is one of the few exchanges that charge zero commission for transactions performed on their platform. Thus, whether opening or closing a position, eToro allows you to trade without paying a dime for using the exchange.
However, aside from providing a platform for users to trade leading currencies, you can trade crypto crosses too. To boost your trading skills, use the provided advanced analysis and charts tools to your advantage. They enable you to follow cryptocurrency trends. You can follow trends for some specific coins that catch your attention.
For real-time updates that keep you abreast of the Crypto industry, each trader can create a custom Watchlist for that purpose. The knowledge garnered from the daily updates may make a significant impact on your trading activities. You can trade any of the leading digital currencies on this exchange.
A veteran of the game, Bittrex’s primary focus is users’ security, stability, and speed. A reliable trading platform, Bittrex is a member of a small group of exchanges with a perfect security record; it hasn’t been hacked. However, such a security degree is expected of an exchange that deploys the most reliable and effective security technologies to secure traders’ transactions and funds. So, rest assured that you are covered when using this exchange.
Bittrex supports Bitcoin and other leading altcoins. The exchange’s expansive marketplace listings enable users to trade several digital coins confidently on the exchange by taking advantage of the trends provided through the listings.
Cryptocurrency Trading Pitfalls to Avoid
Cryptocurrency’s volatility and other factors make traders susceptible to some pitfalls that may impact their trading negatively. Some of these pitfalls and how to avoid them are discussed below:
1. Having zero knowledge of how Cryptocurrency trading works
While Cryptocurrency trading can be lucrative, a lot depends on your knowledge of the industry. How does crypto trading work? What are the potential challenges of trading these digital assets? How can you overcome the trading obstacles? You must understand the digital market and find answers to these questions to become a successful trader.
2. Investing your entire savings in Cryptocurrencies
The rule of business investment is that you should always invest whatever you can afford to lose. Hence, this rule holds irrespective of how promising the investment sounds. Thus, if the investment goes south, you won’t lose your life savings and will always have something to fall back on.
3. Storing Your Asset in Unreliable Wallets
Granted that exchanges provide storage eWallets to store digital assets, not all these wallets are reliable. While some are from legit companies. Some are created by fraudulent people who trick people into using their products. The blind trust gives them access to people’s investment. They can either steal all the coins or a substantial portion of it.
So, research the available eWallets and have an idea of the best wallets to use. Check online reviews of these wallets and make your decision from the garnered information. Note, however, that some companies hire people to write positive reviews about them. Thus, don’t limit your research to a website or two.
4. Investing in Worthless Cryptocurrencies
Today, there are over 3,000 digital currencies in the Cryptocurrency market. Therefore, the creators of these digital coins assure investors and traders that their coins are promising.
Sadly, not all crypto coins live up to their promises. While some such as Bitcoin, Ethereum, and other altcoins listed in this article are worthy of any investor’s money and time, some digital coins are worthless. Investing in such digital coin is a waste of money.
It is your responsibility to research the existing digital coins and choose promising ones to invest in. crypto experts recommend that you stick to the top currencies when investing in digital assets.
How you handle these pitfalls will make or mar your investment result. Avoid them and have better chances of having a profitable crypto trading experience.
Cryptocurrency Trading Tips
Cryptocurrency trading is volatile and risky. Their passion for digital assets only does not drive successful traders. They leverage their trading knowledge and risk management skills to overcome some of the challenges of trading crypto coins.
As you venture into the world of Cryptocurrency trading, consider these trading tips:
1. Take calculated risks
All forms of trading, Cryptocurrency trading inclusive, are risky. Traders can minimize the risk of trading crypto coins by calculating the risks and leverage the knowledge to make wise trading decisions.
Once you are fully aware of the risks associated with Cryptocurrency trading, you can make decisions that will minimize your investment risks.
2. Diversify your investment
Some traders put all their investments on a coin. While that may seem a smart move, it is undoubtedly a wrong move. The famous saying “Don’t put all your eggs in one basket” holds water in Cryptocurrency trading too.
So, rather than invest thousands of dollars on a single coin, spread the investment over a couple of digital coins with growth potential. Diversification is another risk management trick. If any of the coins depreciate, you won’t lose your entire investment. You can always count on appreciating coins to recoup your investment and make some profit.
3. Be prepared for losses
While this may sound too harsh and blunt, the reality is that not every crypto coin you invest in will turn out well. While some may appreciate, some will depreciate too. So, no coin promises profitability. The earlier you are aware of this bitter truth, the better.
4. Have a plan for Cryptocurrency Trading
Don’t go into crypto trading without a well-thought-out plan. Successful trading requires that you have a precise and proper plan. That is a surefire way to get a good result from your trading activities. Without a trading plan, you are susceptible to making wrong trading decisions that may undermine your best efforts to trade profitably.
5. Use proven strategies
Experienced traders understand that there are several trading techniques for crypto traders. Sadly, these strategies give different results. More so, a strategy that works perfectly for a trader may not work for another trader. Thus, one of your responsibilities is to study existing strategies and identify proven ones. Stick to these trading techniques to increase your chances of making a profit.
6. Don’t trade with emotions
Giving your emotions a chance to influence your trading decision will work against you. A trader leaves no room for greed or fear as these emotional factors can ruin whatever efforts you put into crypto trading.
Overcome the Fear of Missing Out (FOMO): FOMO is a dangerous emotion that all traders must guide against.
Traders entertain this fear when they purchase a crypto coin because it is the talk of the town. Before investing in any digital asset, do your due diligence and minimize emotion’s impact on your decisions.
7. Have a motive for each trade
Why are you considering crypto trading? Answers this question and your trading objective will be crystal clear. Most of your investment decisions will be based on your trading purpose, making it easier for you to overcome potential obstacles and trade like a pro.
8. Use Crypto signals for Cryptocurrency Trading
Trading with crypto signals is one of the most effective trading tips every crypto trader should understand and use.
Let’s discuss this extensively.
What are Crypto Signals?
A crypto signal is an analysis-based call for action. Since it prompts a trader to buy or sell a crypto asset. Professional traders with years of experience in the industry can use technical indicators, quantitative analysis, fundamental analysis, and economics to generate them.
They understand crypto trading and, from their years of experience, can make meaningful deductions that can assist less experienced traders to overcome their inadequacies. Their deductions form the basis for crypto signals to help traders understand the crypto trading concept better.
On the other hand, computers depend on mathematical algorithms supported by market action to generate the signals. The computer software program scan digital coins. They equally analyze these assets and their prices. The result of their analysis provides them with the information they need to create credible trading signals.
Irrespective of how they generate these signals, they are invaluable trading tools for traders who know their onions.
Crypto Signals’ Attributes
Crypto signals’ success in helping traders trade with ease can be attributed to their attributes. The result-oriented attributes are:
1. The currency to buy:
While having tons of digital currencies to invest in may be great, you may be overwhelmed by the number of available options if you don’t have a specific cryptocurrency in mind.
Deciding on the crypto coin to buy is a big challenge for traders. Especially for those who don’t have reliable information about these digital assets to help choose. Crypto signals will help you to overcome this challenge as they specifically give you a clue into the best digital coin to purchase at any moment in time.
2. When to buy the currency:
This is another useful element of crypto signals. You are not left to figure out the best time to buy a suggested currency. The crypto signals let you have a clear idea of the best time to invest in the currency. The knowledge not only helps you invest wisely, but it also enables you to spend your time wisely.
3. Trading price:
Crypto signals will also help you know the best price to trade a digital asset for a profit. With this information and the buying price, you can dispose of your asset and make a profit with ease. The piece of information is especially important considering cryptocurrency’s volatility. Without this information, a trader may hold an asset expecting it to appreciate more before selling it off, while it may end up depreciating.
4. Stop loss level:
As you may be aware, cryptocurrency trading isn’t risk-free. However, it may be profitable and if done right. You may lose your investment too.
The stop loss feature will help you to predetermine the right price to sell your crypto coin.
The crypto signal will automatically stop the asset at the predetermined price. And thereby reduce your trading loss considerably for a depreciating asset. It is a perfect preventive measure against investment loss.
• Exit time:
Setting a fixed price to exit a trade is another possibility with crypto signals. It doesn’t matter whether you have reached your target price or not. The feature helps you plan your exit time. This is a proven strategy that prevents several traders from overstaying in trade. And thus avoids the pain of losing their assets to sudden depreciation.
Closing Remarks On Cryptocurrency Trading
It is noteworthy that crypto signals are powerful trading tools that every business-minded trader should use to their advantage. Therefore, with its unique features, traders can dare to dream of making profitable trading and minimize the probability of losing their investment to the volatile cryptocurrency trading business.
Websites that provide crypto signals abound. These platforms promise to assist crypto traders in realizing their trading dreams.
One of such crypto signal platforms is our Best Trading Signals platform. As the name suggests, the platform provides highly reliable crypto signals for crypto lovers. You can find Bitcoin signals and other types of crypto signals on the website.
While Cryptocurrency trading is fun and rewarding if you do it right, it can be risky too. With this guide, you have the information you need to trade successfully. The ball is now in your court.