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Cryptocurrency trading tips for beginners

Author: Jessica Smith
by Jessica Smith
Posted: Nov 02, 2021

What is Cryptocurrency?

Cryptocurrency is the digital currency traded online by investors to make money. The virtual currency uses the latest technology and software to secure trade and provide transparency at the same time. Cryptocurrency operates on online trading platforms using a decentralised system similar to the forex market. Thus, it is not placed in one place and could be used from around the world at any time and anywhere.

Using cryptography and blockchain technology, the currency has the best trading facility for investors. In cryptography, the cryptocurrency traders are verified, and thus it also secures the trade and protects them from double-spending. On the other hand, blockchain technology is the ledger of the cryptocurrency that records all the transactions made using a network of computers.

The virtual currency is not issued by the central authorities and, therefore, does not have any involvement of the government authorities. Thus, it saves traders from any kind of manipulation on the part of central authorities or banks.

The word cryptocurrency is extracted from the encryption technique; thus, it secures the network of cryptocurrency trade. There are various types of cryptocurrencies available for the trade; Bitcoin is the first cryptocurrency introduced at the start of the market in 2009. Other cryptocurrencies are Litecoin, Tether, Ethereum etc.

Trading Cryptocurrencies

To trade cryptocurrencies, traders have to first find a trusted and regulated broker to begin the trade. A broker has all the facilities that a trader needs for a successful trade experience. They have the best trading platforms, tools and services available with commission free trading, high leverage and low spreads etc. However, traders should check with the broker before investing; they should have the exchange that the trader wants to invest with in the market.

Brokers accessible online have major exchanges to ease the trading process. The best brokers that have cryptocurrencies to trade with the CFDs options are ROInvesting The broker has cryptos of various kinds with the CFD options and required facilities of exchange, accounts, deposit and withdrawal etc.

Here are the steps that traders can follow to invest in cryptocurrencies:

  1. The first step is to find a regulated broker to begin the trade; the broker should be regulated with all the facilities that enhance the cryptocurrency trade. Most importantly, they should have the exchange and cryptocurrency available with them to trade that investors want to invest in.

  1. The second step is to sign up with the cryptocurrency exchange; the exchange requires a form to be filled before trading, asking for the details such as name, email address, contact information and setting a password to get access to the account and secure it.

  1. The third step is to fund the exchange account; traders have to deposit a minimum amount to begin the trade. As the amount is used to buy or speculate on the cryptocurrency. Traders can use various modes for the deposit of the funds. For example, bank wire transfers, e-wallets and credit/debit cards etc.

  1. The fourth step is to begin the trade; traders can invest in the cryptocurrency of their choice and analyse the market before going live. A good analysis of the market and study of cryptocurrencies will help traders to decide their digital currency to trade in.

  1. The last step of the trading is to monitor the market and be regular with the trade. Traders should carefully analyse the market, use the tools and technical and fundamental analysis to make decisions. This will help them in maximising the profits with the use of strategies and plans.

Trading Tips for Cryptocurrencies

The cryptocurrency trade is not that straightforward; it requires patience, knowledge and market understanding before investing. However, the points are necessary for a good cryptocurrency trade and specially for beginners to consider. Traders should use the following points in selecting the trading platforms to invest their funds:

  • Currencies available: Traders should check on the currencies that are available for the trade. It is the main thing that a trader should check, as the investment is the priority for the trader. Checking with the available currencies in the market that are having good market value. Bitcoin is the most traded cryptocurrency with good market worth. Other than this, Ethereum and Litecoin have good market value.

  • Leverage: The traders should check on the leverage ratio that is offered on the cryptocurrency. The leverage ratio is provided by the brokers that traders have opened their trading account with. It allows traders to trade at high market positions and multiplies the gain of the trader. However, it is risky as well due to the market uncertainties and double risk. The highest leverage ratio available with brokers is 1:500.

  • Trade Features: The trading features are the necessity for profitable trade as these enhance the trade opportunities and minimise the risk. Thus, with the features, traders can make strategies and use the tools to predict the market fluctuations. Hedging, speculation, CFD options etc., are also a significant part of the trade features.

  • Investment: The minimum investment amount is also essential to be decided by the traders. The amount invested will decide on the profits of the trade; a beginner should go for small investments while the experienced traders can have a high volume of trade.

  • Market position: The position that a trader holds in the market is also essential; a short position is good for speculation and day trading or as per the market situation of the instrument. Whereas the long term market position requires patience and confidence in the trade to earn.

Conclusion

Trade in the markets of the financial sector requires research and analysis before investing. The cryptocurrency market has huge popularity among the masses due to the future market and growth. Traders want to invest their funds in the digital currency market due to the security and transparency of the trade. Thus, an opportunity for the traders.

However, traders should be careful with their investments because of illegal activities, market volatility, cybersecurity issues and regulations. So, these factors should be considered before investing in the market.

About the Author

I like breaking these myths and pushing people towards the practical world. You can read my blogs and financial articles on my

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Author: Jessica Smith

Jessica Smith

Member since: Mar 10, 2021
Published articles: 12

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