How does crypto trading work?
Well, pretty much they operate on the same principle as a foreign exchange or a stock market; meaning they allow different and to be purchased or sold, and mutually swapped.
Practically, a person must match each buy order to a sell order, and vice versa.
Do bear in mind that the rates vastly depend on the geopolitical situation and trading volume also. It is a universal fact that the more volume there is on an exchange, the fewer chances of volatility and market manipulation exist. Therefore, estimating and setting their true value could be a tricky task sometimes.
So, in order for anyone to start trading, one would need to register on any platform and top up a new account with some fiat currency so that desired one may be acquired. This is a fairly simple operation. In most cases, all it takes is linking the bank account and making the transfer.
Not all platforms look alike. For the sake of convenience, beginners should turn to those which have user friendly interfaces.
Pay attention to the validity also. Some exchanges restrict certain countries, depending on the region.
It would also be useful to run a reputation check. As much as some governing bodies are attempting to regulate crypto exchanges, truth be told — a lot of them are not trustworthy.
As history teaches, it is always advised to keep most of the funds on a personal rather than on a particular exchange.
Now, with the basics out of the way, let’s focus on the next thing, which could be the most important aspect — make sure to exercise due diligence. What do I mean?
It is recommended that before reaching the actual investment stage, working with real money, to first practice using virtual currency. As literally every trading platform offers this preference, apply it to your advantage. Nobody wants to get burned.
As time goes by, this training process will shape you and provide you with an adequate mindset that is required. Not to mention that it will further stimulate you to do an additional research and familiarize yourself with the projects/ cryptocurrencies you’d like to bet on, without blindly rushing in.
So educating yourself, learning how the markets function and perform at given times, will often impact decision making.
Monitoring the progress, following trades, is another crucial procedure you need to instill. It matters where you stand with positions. Although at times it all might resemble a video game, rest assured your funds are not to be taken lightly or tampered with.
No, I’m not saying you should frantically stay glued to your screen, watching how candlesticks are being formed second after second, but staying on top of your game, by remaining well informed and aware of the happenings is often what makes a difference between winning and losing.
This is perhaps, by far, the best possible approach in terms of seeing whether a specific strategy is prolific or not.
It will allow you to look deeper into your performance record and give you an overall insight of how successfully you are implementing your tactics.
The most common mistake newcomers tend to make is place all the eggs in the same basket.
What I’m trying to say here is that diversifying a portfolio might be the way to go. This way leaves room for tolerable error, permits risk spreading and produces to some extent.
What most, experienced mentors, gurus, will tell you, is that the secret to is to develop your own , simply stick to it and not deviate.
Here’s the hard truth — is not for everyone and the learning curve is quite steep. Losing a certain portion of your pot is inevitable. There are often times when despite the invested effort, fruition won’t be realized nor guaranteed. Having all these things in mind, all you gotta do now is try to picture yourself in the above mentioned scenario.
Disclaimer: The information provided in this post is not legal, accounting, or financial advice. I am not a lawyer, accountant, or financial advisor. I am not registered as an investment adviser with any federal or state regulatory agency. The Information should not be construed as investment or trading advice and is not meant to be a solicitation or recommendation to buy, sell, or hold any cryptocurrencies.
Title photo by geralt, Pixabay.