The world of crypto is unfolding right in front of us. To not know the basics of trading crypto today is akin to being left behind in the stone age. In this article, we will discuss the basic steps to start crypto trading. However, if you don’t like tedious work, you can simply join a good crypto signals provider and be done with it.
Crypto Trading Steps
Following are the basic steps you need to know –
Make A Cryptocurrency Brokerage Account
To start investing money in the crypto market, the first step is to open an account with a crypto brokerage/ exchange. The process usually is quite simple with the platform requiring you to fill in some identification. It should be similar to signing up on any website. A few popular crypto exchanges include Coinbase, WazirX, CoinCDX, Kraken, etc.
Making A Trading Strategy
You can make a trading strategy at any time before you actually make a trade. But the early you are done with this step, the better. A trading strategy is a comprehensive plan of action. It includes decisions like a trading asset, crypto exchange, stop loss and sell targets among other things. A trading strategy depends on you, your experience, skills & expertise, your risk-taking capacity, and the resources at your disposal. But every strategy involves trying to buy at a lower price and sell at a higher price.
Funding Your Account
Once you have a crypto brokerage account in place, the next thing left to do is to add funds to it. This fund will enable you to buy a cryptocurrency of your choice through it. For this purpose, you need to connect your bank account. While most banks are now providing support for these exchanges, allowing debit card payments & wire transfers, you need to check with yours if the transaction fails.
Choose a Cryptocurrency
Ideally, this should be a part of your crypto trading strategy. But it is such an essential component that it definitely needs a special mention. Bitcoin and Ethereum are safer options as they move predictably. Larger market cap assets are safer that way than smaller market cap altcoins that swing a lot on both sides. But if you can manage risk, altcoins can give you a 10X return on your investment.
Consider Automating Your Trades
Automating your trades comes in different flavors. Crypto exchanges let you set stop losses and sell targets to automate your trades. Additionally, there are trading bots that can help you automate your trades by following a set strategy that you feed them in the form of a computer program. Not all crypto exchanges support trading bots though. So you need to pre-check with your platform. That’s why choosing the right platform is especially necessary. Such additional features can always get you out of a bind.
Storing Your Cryptocurrency
If you are trading actively, the crypto exchange holds your assets to have access. But if you are holding it for a long time, you should get a crypto wallet. Now, crypto wallets come in different options. There are software wallets & there are hardware wallets. Then some wallets hold currencies in custody for you, and there are wallets that you are in complete charge of. Your choice of wallet will depend on your budget, your holding position, and the kind of security you are looking for.
Conclusion
Starting to trade a cryptocurrency can be a bit intimidating with all the blockchain jargon if you are not aware of the basics. This article is enough to get you started, but if you are still afraid to dive right in, it is better to sign up with a crypto signals provider.