If you want to start trading cryptocurrency, then you need to know the basics. You’ll want to know how many cryptocurrencies are there on the market, which ones you want to trade, and where you can get the best rates. As a cryptocurrency trader, you want to have all the data you can to make informed, knowledgeable trades.
So here’s a quick cryptocurrency trading guide to help walk you through the steps you’ll need to take. Follow this primer and you’ll be trading cryptocurrency like a pro in no time.
The first step on your list is what exchange you want to use. Trading is fairly straightforward, whether it’s cryptocurrency or stocks, but where you trade could make a lot of difference. There are a lot of exchanges available, however, finding the right one might depend on which cryptocurrency you want to buy or trade.
One option is to find an exchange aggregator. This is a site that lists out available exchanges, shows you what coins they support, as well as current cryptocurrency exchange rates. Using this type of site helps save you from visiting each individual site and comparing them with each other. You’ll be able to analyze everything from one place.
Now you’ll need to decide which coin you believe is the best cryptocurrency to invest in. If you’re just starting out, it might be best to choose one you like and work your way up from there. You can build on this to get a solid idea of how you can trade cryptocurrencies.
One factor to consider as you choose your coin is crypto coin market cap. Large-cap coins are those in the top five of market capitalization. Mid-caps are anything that exceeds $200M while small-caps live below the $200M threshold.
As you search for the cryptocurrency you want to trade, remember that just because a coin is cheap doesn’t mean it’s the best choice. Its market capitalization is what you want to focus on. This gives you a better idea of how the coin is performing as opposed to its actual assigned dollar value.
Don’t use price as a condition for selecting your first cryptocurrency, however, when you’re ready to start trading, you want to pay close attention to it. Successful traders buy low and sell high. This means you’re buying your cryptocurrency when it’s not costly and selling it when the price starts going up.
While price is an important piece to consider when trading, you should also consider how much volume has taken place in the previous 24-hours. You can also view the daily highs and lows for your coin as well. This gives you a solid idea of how your cryptocurrency is currently performing.
Additionally, you’ll want to find the best possible rate prior to performing your trade. Once you find the rate you want, you’re now ready to start trading. After you perform a few trades, you’ll start to get the hang of it and begin to feel more comfortable about what you’re doing.