How To Trade Cryptocurrency - The Ultimate Beginners Guide
How to trade cryptocurrency is a question asked by many beginner traders today so, if you are interested in Cryptocurrency Trading but are not yet sure about what it really is or how it actually works? Then you have come to the right place; we will help you understand the fundamentals of Cryptocurrency and how you can start trading it.
Once you know the basics, it is actually not that difficult and trading Cryptocurrency becomes an exciting adventure where you can make a fortune in less than a minute. In this article, we will explain the most important things that you need to learn and know how to trade Cryptocurrency, so read on to find out.
What is Bitcoin?
Bitcoin has received a lot of attention lately, and you might have heard and read a lot about it in one way or another. This is good news for you since this mainstream attention has made it easier than ever before to start trading with bitcoins. But before we start explaining how to trade, we need to know what exactly Bitcoin is.
It was a person or a group, under the name Satoshi Nakamoto that created Bitcoin in 2009, and it came to be the first cryptocurrency ever made. A cryptocurrency, such as Bitcoin, is a digital currency. In other words, it is internet-based money. Unlike conventional currencies such as USD and EUR, Bitcoin is a decentralized currency. This means that it is not controlled by banks, governments or any other authorities.
Instead, bitcoins are managed by people processing transactions with one another who are also known as or called miners.
Mining is done by powerful computers that solve mathematical problems, which in turn generate coins. With that said, you do not have to be a math genius in order to get bitcoins as you can simply buy them. Bitcoins work like real money but it is a currency that only exists online and it is digitally transferred. You can buy bitcoins and then use them to buy things or services online. You can also save them in order for their value to increase over time and then sell them and make profits.
Altcoins – Alternatives to Bitcoin
Although Bitcoin is the most popular cryptocurrency, it is not the only option when it comes to digital currencies.
Alternatives have been launched since the success of Bitcoin, and these are called altcoins. There are hundreds of different kinds of altcoins, such as Ethereum, Zcash, Litecoin and Monero.
What is Cryptocurrency Trading?
You can trade cryptocurrency in order to make money. Market trading currencies are the act of exchanging a currency into another currency. When the price of the currency changes, you change it back and by so doing, you can make profits. Cryptocurrency trading uses the very principle. The only difference is that instead of trading EUR, USD or any other conventional currencies, you trade a cryptocurrency for a fiat currency (such as USD or EUR).
How to Trade Cryptocurrency Short or Long Term
If you want to start trading cryptocurrencies, you can choose to either do long-term trading or short-term trading, based on what you feel you are most comfortable with. Long-term trading means that you buy and then hold the cryptocurrency over a long period of time before selling.
Short-term trading takes advantage of short-term price swings. By doing long-term trading, you hold cryptocurrencies for weeks, months or years. Short-term trading involves buying and selling within a day or just a few hours.
How Do I Start Trading?
You might now be wondering how to start trading cryptocurrencies. In order to begin, you first need to know what a crypto exchange, in other words a trading platform, is. Basically, it is what allows us to actually buy and sell cryptocurrencies.
There are many different crypto exchanges, and they differ a bit from each other. Some are only available in certain countries, and on some crypto exchanges you cannot deposit or withdraw using fiat currencies.
In order to store, send and receive cryptocurrencies, you must have a cryptocurrency wallet. You can compare a crypto wallet to a bank account where you store money.Crypto wallets store encrypted passwords and they represent coins. When creating an account on an exchange, you normally get a crypto wallet.
Cryptocurrency Trading Platform
Cryptocurrency trading is a pretty quick process to get started with. The only thing that might be tricky is finding the right trading platform. There are lots of options out there but as a general rule, make sure that you do some research before you make a decision.
There are a few things you should keep in mind when you are doing your research. For instance, check which cryptocurrency the platform allows you to trade with. If you want to trade with bitcoins, you cannot choose a platform which will only allow you to trade with altcoins. You should also make sure that the exchange does not require you to start trading with a higher starting capital than you have set out to do.
When you have chosen an exchange, you will need to create an account. This usually only takes a couple of minutes, and most often it requires you to verify your identity. For example, you might have to submit a picture of your ID. After registration, you need to deposit money into your account then you are then ready to start trading. A good advice is to read bitcoin news daily if you are serious about making money by trading cryptocurrencies.
The Leading Trading Platform
One of the most popular and user-friendly trading platforms is Coinbase. Matter of fact is that it is the largest exchange in the world when it comes to trading bitcoins.
Nevertheless, you can also trade other cryptocurrencies using this trading platform. It is available to users in more than 30 different countries. With Coinbase, you can buy the cryptocurrency that you want to trade using several different payment methods.
When you want to deposit your money, you also have many options to choose from, including PayPal. We recommend that you use Coinbase as your trading platform, mainly because this exchanger is easy to work with when you are a beginner.
How To Trade Cryptocurrency Conclusion
Hopefully, you are now feeling a lot more familiarized with what cryptocurrency trading is, and what you need to do in order to start trading. Once you have learnt the basics of cryptocurrency trading, you will be ready to start trading, and there is no better way to learn how to trade than to actually start doing it.
Set up an account on an exchange such as Coinbase and buy some cryptocurrency. Set your limits, and you are ready to start trading. Good luck!
If Bitcoin and Cryptocurrencies interest you and you want to get into this relatively new but very exciting and profitable market than you need to educate yourself first. We have great and very informative blog posts for you to read and get acquainted with this world of trading.