Trading cryptocurrencies is a great way to make money. Many millionaires and quite a few billionaires have been created by this new kind of trading and, in the process, much of the rest of the world has rushed to join the bandwagon. You can profit too. However, the catch is that you know what you’re doing.
To start with, you need to have an intimate understanding of how cryptocurrencies work. If blockchain technology sounds like magic to you, then you need to increase your knowledge until it stops sounding that way. Next, you need to have an understanding of how crypto trading platforms. The first is fairly easy to do, given enough time and research on the internet. The second — not so much. What should you look for in the ideal crypto trading platform? There are many things that make for a good platform, of course; ranging from the reputation to conducting a BTC Profit system test. However, the four below are the most important.
Security for Your Funds
Before you look for anything else, you should start here. With the soaring price of the major cryptocurrencies, you’ll want to make a large deposit when you’re starting out. However, if you’re going to do that, you need some kind of guarantee that your money will be safe. There are plenty of stories out there of exchanges that went bust right after large deposits were made.
Now, without your money, you won’t be able to trade and make more money. So, make sure you do your research properly on every platform that could potentially host your trading. Look into the safeguards they have put in place to make sure funds are safe. Most of this information is posted on the trading platform’s website, so take your time and read it.
How Many Cryptocurrencies Does the Platform Deal With?
There are hundreds of cryptocurrencies traded on the markets today. Before you join a platform and do your trading on it, find out if it supports the particular cryptocurrencies you want to trade.
Cryptocurrencies are mostly peer to peer, which means that not all of them will be traded on exchanges. Before you join an exchange, look at all the cryptocurrencies it supports to find out if yours is on the list.
How are the Transaction Fees Structured?
Every platform charges you transaction fees in one form or another. That is how the platform makes money since they rarely do any trading themselves. That said, the way these fees are structured varies from platform to platform, and that’s what you should find out.
Some exchanges charge a flat fee per transaction while others charge a percentage of the transaction. Some of them charge after every transaction while others bill you after a given period of time. Some will even reduce the costs as your trading volume increases, giving you enticing discounts to encourage you to trade more. You should find out about all of this and figure out if you’re comfortable with the structure before you commit to the platform. At any rate, avoid platforms whose transaction fees are unnecessarily high.
How Well Do You Understand Trading?
Understanding how cryptocurrencies work is one thing. Understanding how trading itself works is a whole different ball game.
Trading didn’t start with cryptocurrencies. It is as old as money and involves simple application of the buy-low-sell-high maxim. That said, with modern technology, just looking at price charts and figuring out what’s going on has become something of an art in itself.
Before you start trading, make sure you know how to read charts and indicators and place buy, sell, and stop orders. Additionally, look for an exchange with a simple trading platform, so you don’t waste your time learning how to use it, rather than actually trading.