Interest in cryptocurrency trade is increasing every day as more people are now working from home. How to start trading cryptocurrency is a question that bewilders most people looking to venture into it. Before you plunge right into trading in cryptocurrency, you need to first understand a few basic things about it. You can only start dabbling in cryptocurrency regularly when you have the prerequisite knowledge. This article can give cryptocurrency trading beginners some basic information.
Prerequisite Knowledge for Trading in Cryptocurrency
Cryptocurrency is a vast domain and you don’t need to become an overnight cryptocurrency expert to start trading. However, you need to understand the basics of cryptocurrency and trading before you start off. This prerequisite knowledge is basic and common to all trading platforms. You can read the following points to get more information on the topic of cryptocurrency trading for beginners:
Buy Low Sell High
The basic rule of any form of trading is to buy low and sell high. In order to make a profit, you need to buy at a lower price and sell at a higher price. Thus, you need to analyse which way the price will go while opting for a trade. If you think the price of the cryptocurrency is set to increase, then you can consider buying at the prevalent rates. Once the prices have risen, you can then sell the cryptocurrency you already have for a profit.
Choosing the Right Cryptocurrency Trading Platform
In simple words, the crypto trading platform is a website or an app with the help of which you can buy and sell cryptocurrency. It serves as your liaison to the cryptocurrency exchange and your orders can be executed here. There are numerous exchanges available around the world and different trading platforms support different exchanges. If you wish to use Torex, you can open an account with either one or more of the supported cryptocurrency exchanges. Then you can enable API connection and then enter those API keys in your Torex account. If you don’t wish to open an account with a cryptocurrency exchange as of now, you can still use the Arbitrage tool on Torex and set price alerts. Torex is a developing crypto trading platform that can be considered by both beginners and advanced cryptocurrency traders.
The Reputation of the Cryptocurrency Exchange
Numerous cryptocurrency trading platforms are available throughout the world. While picking the appropriate one, you need to first research about the reputation of the platform. You can go through feedback given by other users of the platform to see if it suits you. Also, you can visit the official site of the platform to see what security measures they have in place. Security is an important factor while choosing a trading platform since some of them have had a history of hacking. You can refer to reliable media sources in order to verify the reputation of the trading platform. Most modern trading platforms have robust security measures that provide enhanced hacking resistance.
Different cryptocurrency exchanges around the world operate on different exchange rates. This makes it a challenging task to research all of them. While you can make do with researching a few of them, it will not give you a full picture of the prevailing market environment. A good idea would be to opt for a trading platform that incorporates different exchanges. This will make your manual research much easier and allow you to dynamically assess cryptocurrency prices. Such a platform also gives you the advantage of tapping into orders that have been placed on different exchanges. Thus, the chance to execute your trade at your desired rates is likelier.
Not all trading platforms allow trading of all forms of cryptocurrency. There are different types of cryptocurrency that are trading under different names and at different rates. You need to ensure that the trading platform you plan to use is compatible with the cryptocurrency you hold. This means that the trading platform should allow you to place buy or sell orders in denominations of the cryptocurrency you own or wish to own. For example, Torex, as a platform, supports many types of cryptocurrency. Thus, you may not need to use different platforms for trading in different cryptocurrencies. One platform will allow you to trade and leverage different exchanges and different cryptocurrencies.
Availability of Data
To make profitable trades, you need to decide when and how much cryptocurrency to buy or sell. You need access to a good data set in order to come up with sound trading decisions. Good data analytics is an important prerequisite for trading. Once you have that data, you are on a level playing field. Good data analytics puts novice and professional traders on the same level. The rest of the profitability depends on the trader’s skills. As a novice trader, you may be tempted to do your own research from various sources. This could be counter-intuitive since you don’t know the reliability of the source. To circumvent this problem, you can opt for a trading platform that has data analytics integrated within it. This can save you a lot of time and the data can help you make quick decisions if you use it wisely.
Tracking Cryptocurrency Rates
As mentioned earlier, different exchanges operate around the world and they have different cryptocurrency rates. To make sound trades, you may need to track the prices across different exchanges. This often isn’t easy as you may have to juggle between different tabs in order to track prices. Moreover, you may capitalize on some good opportunities of buying at one exchange and selling at another if you use trading platforms. Hence, you can opt for trading platforms that allow you to parallelly track different exchanges together. This can potentially make it easier for you to capitalize on trading opportunities.
The Torex Advantage
By now you have read some basic information about trading in cryptocurrency that may help you to proceed further if you decide to get practical experience in crypto trading. The world of cryptocurrency is filled with jargon and learning of additional information, as well as trading experience, can be required. Platforms like Torex can make how to start trading in cryptocurrency easier by cross-sectional integrations. It allows you to trade across nine supported crypto exchanges and use different cryptocurrencies. Moreover, Torex has integrated data analysis tools which you can use to parse through relevant data. Torex has no entry barriers and hence even novice traders can create an account and leverage its offerings.