There are many reasons to get involved in trading of some sort. Many people have given up their normal profession to enter the world of day trading as their main source of income. Others like to speculate on the stock market more casually and infrequently.
You may be considering making some investments yourself. Perhaps you are looking for a short-term investment with quick results. Alternatively, you may want some high-yield investment opportunities for your retirement.
Cryptocurrency trading is something that has been capturing investors’ imaginations for a few years now. But perhaps it is the huge price bubbles that bitcoin has experienced since 2017 that have grabbed the attention.
If it is crypto that appeals to you for your investments and trading plans, then you will need to learn a few things.
How to get started with crypto trading
If this is your first venture into cryptocurrency trading then you need to follow a few steps. Here below is a basic plan you may want to consider. Some of the steps are essential if you want to get involved in cryptocurrency, others are optional.
- Set your budget – allocate funds
- Seek out advice on crypto
- Choose which currency to invest in
- Select a crypto exchange
- Create a wallet
- Purchase crypto
- Develop a trading strategy
- Sell at the right time
- Store the crypto safely
One important area that could help you to avoid pitfalls and have smooth trading practices is to read up on crypto. Enthusiasts have created sites such as Cryptoholics precisely to help newbies select the right exchange and avoid scams with crypto.
Carry on reading to look into some of the other areas listed in a bit more detail.
What cryptocurrencies should you choose?
This is possibly the most notable choice you have to make. If you select one crypto and invest a good amount of cash into it, you may be stuck with it for a while.
You may want to stick with larger market caps such as Ethereum and Bitcoin, but Altcoins are worth looking at too sometimes. One tip is to look at who is behind the crypto and read their whitepaper. This may give you some inkling of where the crypto may be heading in the future.
When Bitcoin started trading back in July 2010, it was only worth $0.08 according to Investopedia. It has taken years to get where it is now. Don’t be surprised if your choice of crypto takes some time to rise but there are some interesting options such as Uniswap.
You could also look for crypto that has someone rallying behind it. Elon Musk has shown just how much a cryptocurrencies valuation can change by his tweets and comments on Dogecoin.
Choosing the right exchange
Another reason for checking out crypto resource sites is to be able to compare exchanges and read reviews about them. Look for long-established exchanges that have a good history.
You will want to see some form of licensing and also information regarding the website’s security.
Develop a strategy and sell at the right time
Your next move is to determine how you are going to play the market. Are you looking to sell often to make small but steady profits to reinvest, or are you looking to the long-term and the day that bitcoin reaches stratospheric heights?
One way to start off crypto trading is to use an automated tool to choose the right moments to sell. This has the advantage of removing emotions and their influence on trading decisions.
Choosing the right storage methods for crypto
You may have heard about crypto wallets already. This is where you will store your bitcoins or ethereum. You can keep your balance in an exchange if you prefer but this is often viewed as the least safe option.
The next option is to download a program to your computer that lets you store the crypto in a hot wallet. This means that the wallet has some form of access to the internet.
The safest option out of all is to keep the crypto in a cold wallet. Meaning you store your data in encrypted form on a USB drive or similar. This keeps it safely away from any potential cybercriminal.
Investing in crypto can be an exciting decision as far as trading goes. While the claim to being the first bitcoin billionaires may have already been taken, there are plenty of other fledgling currencies for investing lower amounts.
Many people are still speculating that bitcoin could go as far as $200,000. This leaves plenty of scope for investors to join the bandwagon still. As the number of coins available diminishes, the value, in theory, should continue to rise.
Before you have dreams of being like the Winklevoss twins though, you need to read up on crypto with resource websites. Then after creating a wallet and choosing your exchange. Then you can settle into working out a strategy that suits your manner of trading.