As cryptocurrencies once again outperform other major assets, the interest in trading bitcoin and other digital coins has returned. Undoubtedly, the impressive run in 2020 of the most popular cryptocurrency in the world bitcoin – along with other coins like Ethereum, Ripple, Litecoin, and bitcoin cash – convinced many analysts and investors that digital assets are not a temporary phenomenon.
Fortunately for crypto newcomers, getting into the crypto market has become much easier than in the past as new applications and security features have emerged. With that in mind, there are some significant factors that every newcomer must know before entering this exciting and unpredictable market.
Find A Top Notch Cryptocurrency Exchange
The first and most important step you need to do is to find a cryptocurrency exchange. As part of your research, you’ll have to check the exchange platform, mobile app, the supported coins, fees, security (if it has been hacked in the past), and trading features. Moreover, you might want to match the chosen platform to your trading style, or the type of investment you would like to make. For example, if you are planning of making a one-time long term investment in a certain crypto coin, it would be better to find an easy to use a crypto exchange like Changelly or Coinbase. But for active traders that are looking for a top-notch platform, Binance, Huobi, and Kraken are some of the best options.
Create Your Own Trading Strategy
Trading cryptocurrency generally involves the same trading methods of any other market. Before you enter the market, you’ll have to learn and create your own trading strategy, which is in other words, an organised trading plan. Some of the best trading strategies often used by experienced traders are a mix of technical and fundamental analysis. Those are being used to determine the direction of an asset.
In addition, there are also risk trading strategies that include a risk-reward ratio, and the use of advanced orders like stop loss, take profit, good-til-canceled, and training stop.
With that in mind, cryptocurrency trading is more volatile and speculative than any other market, and thus, the majority of crypto traders tend to focus on day and swing trading. As such, it would be useful to know day trading techniques and tools like certain technical analysis indicators, scalping strategy, and day trading fee rebates from the exchange.
Follow Market News and Data
Finally, the cryptocurrency market is not yet regulated by any central authority. This means that finding a reliable source of news and data on latest crypto presales like AIDoge is essential to being aware of what is happening in the crypto world. Unlike the forex and the stock market, when you are trading the cryptocurrency market you won’t be able to take advantage of trading during economic data and earnings reports. Instead, you’ll have to know the factors that drive cryptocurrency prices. For example, you must follow a cryptocurrency network’s hash rate data, mining difficulty data, and the cost of producing the crypto coin you are trading. When looking for news, you must be aware of any fork and issue of scalability. Moreover, news of government regulation will drive cryptocurrencies prices higher.