Trading

What Do You Need For Cryptocurrency Trading

By November 17, 2017 No Comments

Since the invention of cryptocurrency’s back in 2009, the sector has evolved at an exponential rate.

Bitcoin was the first cryptocoin to burst onto the scene when it was created by the anonymous developer(s) Satoshi Nakamoto.

Since its incredible rise to prominence and success, its format has been replicated, developed, and evolved and there are now literally hundreds of different cryptocurrencies to choose from.

As more and more currencies burst onto the scene, so the opportunity to make money through trading them presents itself.

But what do you need for profitable cryptocurrency trading? What are the vital ingredients that you need to add to ensure success?

Of course, we cannot give you the winning formula to make millions on the cryptocurrency exchange, but we can certainly provide you with a sort of checklist to help you on your way.

So, without further ado, let us read on to find out more!

What Is Cryptocurrency Trading?

How to trade with Bitcoin

The chances are that you have probably heard of Forex– the strategic buying and selling of world currencies with the intention of making a profit based on their rising or falling values.

Well, now as currencies like Bitcoin and Ethereum start to give fiat currencies a run for their money, a popular trading environment has developed.

Nowadays you can buy, sell, invest, and trade your cryptocurrencies to make a profit and further line your digital wallets.

You can choose to trade fiat currency for the cryptocurrency, cryptocurrency for cryptocurrency or cryptocurrency for fiat currency – any combination of such trades has the potential to make you money, and the structure of trading and the methods used closely resembles that of the world of Forex.

Before you start delving into the world of cryptocurrency trading, there is some research that you need to do, a few decisions that you need to make, and a few things that you need to consider.

Luckily for you, we have covered them all.

What Do You Need to Consider Before You Start Trading?

Cryptocurrency trading is pretty straightforward, but if you want to be good and successful at it, you need to get your ducks in a row before you dive in at the deep end.

Choose The Currency

First things first, you need to consider what currency you are going to trade. Bitcoin is an obvious choice due to its worldwide popularity, and the fact it is well known and well respected.

It is however somewhat volatile and costly when compared to the dollar.

For beginners, it could be wise to consider one of the other options on the market. For example, Ethereum is an excellent choice – stable, valuable, and widespread it is considered a safer bet and much less volatile than Bitcoin.

It works on the blockchain – a decentralised, open source public ledger which keeps a record of every transaction that is actioned, it is expected one day to overtake Bitcoin regarding the market lead possibly.

Other currencies you can consider investing in include Monero, Litecoin, Zcash, and Ripple- they are all well known, well respected, and popular enough to be worth dabbling in.

Define Your Budget

The next thing you need to think about is how much money you are going to invest in your cryptocurrency pursuits. As with any investment, there is nothing guaranteed, and as such, you should never invest more than you can afford to lose.

While most people make a profit when it comes to cryptocurrency trading, it is impossible to predict the way that the market will behave genuinely, it is wise and shrewd not to put all of your eggs in one basket.

Don’t borrow money to invest, and don’t spend the mortgage repayments as if you lose, you could find yourself in hot water.

You need to set yourself some limits before you start such as how much you can afford to lose, and at what point you will quit trading once you have made a profit. Establishing these limits and having the discipline to stick to them is the key to your success.

Once you have decided on these two factors, it is time to consider the types of technology you will enlist to help you.

Choose a Reliable Cryptocurrency Wallet

You need to pick a good digital wallet that will keep your money safe and secure while allowing you easy access to it when you need it.

You then need to pick a good trading platform that suits your needs and requirements. With so many different ones on the market, it can be very tough knowing which ones to choose, and that is why we will give you our top picks of the best, to make the job a little easier for you.

Which Wallets Are The Best for Cryptocurrency Trading?

The best cryptocurrency wallets for iPhone

So, a digital wallet is pretty self-explanatory. It is a piece of software such as an application that can be downloaded onto your mobile, tablet, or computer and that stores your cryptocurrency for you, much in the way that a regular wallet would.

The difference is that with a digital wallet you cannot leave it in a bar, and instead, you download it, set up some security, and you are good to go.

There are lots of different cryptocurrency wallets on the market – there are even hardware wallets available, but for cryptocurrency trading, we will focus on digital wallets as they are the most suitable.

We have rounded up a list of the top three that we feel are the most suited to cryptocurrency trading:

Coinbase

Coinbase is one of the most well-known and well-established cryptocurrency wallets on the market. It stores Bitcoin and Ethereum, as well as offering a crypto exchange amongst others.

Supported in more than 30 countries, it boasts over 10 million users with a transaction value exceeding $20 billion. As well as having a reputation as industry leaders in the exchange world, their easy to use interface makes their digital cryptocurrency wallet, one of the most popular on the market.

It is free to use except for a small fee for transactions which depends on the size of the trade being made.

All you need to do is sign up, link your bank card and buy your currency. You will need to verify your identity by submitting one or two pieces, but this is dependent on how much currency you are buying.

StrongCoin

This is a hybrid wallet that allows you to send, receive and store Bitcoins as and when required. The differences are that the Bitcoin private key, which you need to send money, is encrypted within your browser before it is sent to their servers.

This means that they can never “hold your Bitcoins ransom” because you can access and download your entire account as a PDF.

You can buy Bitcoins directly from the wallet, so they are never at the risk of being stolen on the exchange. It is one of the longest-running Bitcoin wallets and has over 150,000 users.

Well known with an excellent reputation, they are free to use and sign up to, except for a nominal transaction fee based on the size of the transaction. Not one of the biggest players in the game, but they are probably one of the best.

Exodus

These guys are offering up what is perhaps the best-designed software wallet on the market.

Exodus is the first desktop software wallet that offers ShapeShift built into it as a standard. This means that you can benefit from quick conversions between altcoins and various cryptocurrencies.

Apart from its ShapeShift integration, it is also a multi-asset wallet and allows you to store all of your private keys in one place with a super smooth and slick user interface.

You have full and total control over your private keys, and they enjoy full encryption. Exodus also offers live charts and a great support system via help desk or email regardless of the time of day.

Which Trading Platforms Are The Best?

What Do You Need For Cryptocurrency Trading

Which trading platform is the best depends on how much you are looking to trade. To help you make a decision, here is our pick of the best.

Kraken

Launched back in 2011, Kraken is the most significant Bitcoin exchange regarding volume and has the highest rate of liquidity.

Using this exchange, you can buy and sell Bitcoins as well as trading between Bitcoins and Euros, US Dollars, Canadian Dollars, Pounds, and Yen. You can also trade with other cryptocurrencies such as Ethereum, Monero, ETC, Zcash, Litecoin, Ripple, and Dogecoin amongst others.

For those that have a little cryptocurrency experience, Kraken offers margin trading and a plethora of other features.

Poloniex

This platform was launched back in 2014 and is one of the world’s leading cryptocurrency exchanges.

It offers clients a secure trading environment with over 100 crypto-pairings as well as tools and data analysis for those who are a little more advanced in trading. With one of the highest trading volumes in the industry, users will always be able to close a trade position.

The platform offers a volume-tiered fee schedule that also charges depending on whether you are the maker or the taker.

Fees range from between 0% to 0.15% depending on the amount you decide to trade.

Another great feature on Poloniex is its chat box which means you can engage in conversation while you are trading. You can chat about anything, get advice or info, or have in-depth discussions depending on your preference.

Cex.io

Cex.io offers a broad range of services for those that are trading in fiat and cryptocurrencies.

The platform allows users to quickly and easily trade their fiat cash for the cryptocurrency, and vice versa.

If you want to trade your Bitcoin professionally, Cex.io also offers a personalised and very user-friendly trading dashboard that also supports margin trading.

The platform also offers a brokerage service which is a great help to novice traders and gives them the opportunity to buy at prices that are more in line with the market rate. The site is secure, smart, intuitive, and you can store your coins in safe cold storage.

eToro

eToro markets itself as a social trading and multi-asset brokerage. With registered offices in Cyprus, Israel and The UK, it has a global reach and is fully regulated in all of those markets.

Founded back in 2006 in Tel Aviv as RetailFX, the eToro OpenBook social investment platform along with its copy trading feature were released in 2010. It allows traders to view, follow and replicate the actions of the networks top traders.

eToro also gives an opportunity for individuals to trade in stock CFDs, Forex, and cryptocurrencies and has over 4 million active accounts.

Conclusion

The world of cryptocurrency trading is an exciting and fast-paced one. Hence, getting involved is a good way to invest, and possibly make yourself a tidy profit.

By following our guide above, you should be able to arm yourself with the information, tools, and the knowledge that you need to take your first steps in the trading world, and to be ready to try your hand at successful cryptocurrency trading.

As with many things, it is advisable to start small and to get to know the markets and the way they work, before you begin making bit investments.

By making small deposits, low investments and small trades you can get to grips with the nuances of cryptocurrencies before you start putting serious money into the exchange. Despite what some sources say (usually CEOs of banks), the future of cryptocurrency is not going anywhere, and if anything, its popularity will continue to grow at a pretty fast pace.

Now is the time to bite the bullet and get involved, before prices reach a level that makes them inaccessible to many.

Think back to the time where one Bitcoin was word $1, whereas now they are worth over $3000… Imagine if you had invested back then, you would be sitting on a small fortune now.

With hundreds of established and fledgeling currencies available to choose from, picking the right one could put you on the path to success.

So do your research, pick your currency wisely, and get trading in one of the most exciting currencies in the world – cryptocurrencies!

Now that you know what you need for cryptocurrency trading, you can move on to choosing the best trading platform.

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Megan Frydel

Author Megan Frydel

Megan is a self-thought blockchain enthusiast. She enjoys combining finance with technology, from a less-techy perspective. BiteMyCoin is her most recent project underneath the umbrella of an international digital marketing agency ANCHOVY.

More posts by Megan Frydel

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