Crypto trading can feel like the Wild West, especially when you are a newbie to this adventure. Nevertheless, you can become a crypto master if you inform well and consider some key factors. Ethereum, Dogecoin, or Bitcoin? It can be one of them, all of them, or other cryptocurrencies because the ocean of virtual coins is so vast you have plenty of choices.
But before embarking on this thorny journey, ensure you meet these simple requirements:
Choose the Right Broker or Crypto Exchange
The first and most important step when taking this route is to choose a cryptocurrency exchange or a broker. Select something based on your particular needs, but ensure you know the difference between the two and balance the options well. Simply put, crypto brokers are nothing but individuals or companies that play the role of financial intermediaries when you want to exchange your digital currencies for other ones or real money. Exchanges, on the other hand, are platforms where sellers and buyers get in touch to trade digital currencies. These also charge a fee, so be sure you document what it is all about before getting started.
Have a Trading Strategy in Place
It is essential to have a strategy not to find yourself in a situation where you lose money rather than earn it. You also need to know what trade to make, when to act upon it, when to exit it, and how much capital you should risk. It is easy to get wrong in such a complex and not fully explored market, so ensure you think about a profitable strategy and start trading after that.
The most appreciated strategies among traders are:
- Day Trading
- Scalping
- Position Trading (Buy and Hold)
- Dollar-Cost Averaging
- High-Frequency Trading (HFT)
Every strategy has its own advantages and disadvantages – what is important is to know what can work for you. This depends on how much you are willing to invest, what cryptocurrency you choose, and your expectations regarding this situation. Suppose you know little about the crypto market and find it difficult to document by yourself. In that case, we recommend working with an expert who can help you get started and provide professional advice and specialized legal services if you or your company becomes involved in legal matters due to crypto.
Select a Storage Option
Since cryptocurrencies are still in the early stages, you risk hacking or theft if you do not have a secure storage place to deposit your assets. After deciding on your buying option (broker/crypto exchange), look for a way to store your electronic coins. If you have chosen a broker, possibilities are limited, but if you bought crypto through an exchange, you can use hot or cold wallets and even leave the coins on the exchange. Cold wallets are considered the safest storage option, as they are not connected to the Internet, thus taking the form of a hard drive or USB. On the other hand, hot wallets run on an Internet-connected device, which makes them more prone to be hacked.
Thus, ensure you research what each type of storage option implies and choose wisely.