Quick Guide To Trading Cryptocurrencies
The cryptocurrency market can be a fantastic way to make money for those interested in trading and investing.
Below is a beginner’s guide for trading cryptocurrencies.
Choose Your Route
When trading cryptocurrency, there are two possible routes:
- Speculating on the price of cryptocurrency by using CFDs; or
- Outright buying cryptocurrency with the expectation of increased value.
The term “CFD” refers to a contract in which it is agreed that an exchange will happen in terms of the difference of the price of a cryptocurrency from date of opening of position to date of closing thereof.
This comes down to speculation instead of outright ownership.
The second route, and possibly the more popular option, is to buy cryptocurrency with the aim of holding it in a wallet and selling it for a profit once it increases in value.
To do this, you will first have to sign up for a cryptocurrency account, as well as open a crypto wallet.
Education Is Key
Since the cryptocurrency industry functions in a very different way from traditional markets, it is crucial to learn the basics before jumping in on your first trade. You can go through a Crypto blog in Nigeria and other locations to get information about the latest cryptocurrency updates. With a trustworthy source, you could explore blogs on topics like – how to choose the best crypto investment strategy for you and important steps to take before investing in crypto.
And if you want to learn how the digital market operates, it is via a system of peer-to-peer transactions. Every time a cryptocurrency is sold and bought, this transaction is then added to the blockchain, which basically acts as an electronic general ledger. This process is referred to as “mining”.
Have A Plan
Success will only come to those who have an actual trading plan.
This is true for all traders, but especially so for crypto traders because of the way the market works.
A trading plan should include: a clear outline of your goals, tools for managing risk, which cryptocurrency you plan on trading, and how you plan on approaching the entering and exiting of trades.
Another important aspect addressed in your trading plan should be that of how you plan on analysing the crypto market. Whatever your chosen method, whether technical or methodical, it is vital that you always remain up to date with cryptocurrency news, market movements and tendencies.
Choosing A Platform
Your options for choosing a trading platform are:
- A crypto trading mobile app
- Your web browser
- A third-party platform (these are typically more advanced)
Earning By Saving
With many cryptocurrencies, you will also have the option to earn interest on your crypto by means of a digital exchange.
Exchange accounts offer interest as well as the option of lending out your currency to earn extra interest. In this instance, users will typically pool their cryptocurrency tokens with other users. This pool is then used to finance loans.
Game To Earn
Another interesting way to earn money across the cryptocurrency market is to earn coins by playing online games. Popular examples include Decentraland and Axie Infinity.
Trading in crypto is easier than what most may think. It is easy to learn and creates an opportunity to earn mostly passive income.
The trick is to time your investments right, after which you will begin to reap the rewards of digital gains.