Cryptocurrency Trading Steps
Take a look at the 5 steps to trading cryptocurrency.
Step 1: Make a cryptocurrency brokerage account.
Unless you already own cryptocurrency, you’ll need to make an account with a crypto brokerage. Kraken, Gemini and eToro are among the best crypto brokers on the market. All 3 of these options offer a simple user interface and a variety of altcoins to choose from.To make an account, you’ll need to provide your crypto brokerage with personal identification information, similarly to opening an account with a stock brokerage. Some common information you need to provide when setting up your account includes your Social Security number, address, date of birth and email address. There are a ton of options when it comes to cryptocurrency brokerages. For new investors, Kraken is a great option. Kraken has a free cryptocurrency conversion feature where you can trade your crypto for any other token supported. Another crypto brokerage that is a solid option for intermediate traders is Binance.
Step 2: Fund your account.
Once you’ve signed up with a crypto brokerage, you’ll need to connect your bank account. Most crypto brokerages offer bank funding through debit cards and wire transfers. Wire transfer is typically your cheapest option to fund your account –– it’s free Gemini.
Step 3: Pick a crypto to invest in.
Most active cryptocurrency traders allocate most of their capital to Bitcoin and Ethereum. These cryptos move more predictably than smaller altcoins, so trading with technical indicators can be easier. Many crypto traders allocate a portion of their capital to smaller altcoins. Although small mid-market cap cryptos are riskier than large-market cap cryptos, they offer higher upside potential. Many small altcoins have risen over 1,000% in a matter of months, making them attractive investments for risk-tolerant investors.
Step 4: Choose a strategy.
There are a plethora of trading indicators to choose from, and most traders take multiple factors into consideration when buying and selling cryptocurrency. If you’re new to investing, you may want to consider checking out some reliable cryptocurrency news sites such as www.fortunecryptotoday.com or www.cryptotradingtube.com. These sites will
help keep you up to date on everything crypto currency. Being up to date on the latest crypto news will keep you in the blockchain loop and give you na better understanding of what your coins are doing on a daily basis. If you’re an experienced trader, you may already have a strategy you use to trade stocks. Stock trading strategies are also commonly used for cryptocurrencies. A personal favorite trading strategy that many traders use is Elliott Wave Theory (Link added by Austin). Elliott Wave Theory focuses on the psychology behind the market sentiment, so it works particularly well for speculative assets like cryptocurrencies.
Step 5: Store your cryptocurrency.
If you’re actively trading your cryptocurrency, you’ll have to store your funds on the exchange to have access to them. If you’re buying your cryptocurrency to hold for the mid to long term, then you should get a cryptocurrency wallet.
Cryptocurrency wallets come as software wallets or hardware wallets. Both are secure, but hardware wallets offer the best security, as they store your crypto on a physical device, offline. Ledger is a great hardware wallet brand many investors trust to store their crypto assets on. If you’re looking for a software wallet, there are several options on iOS, Google Chrome and Android that are free to use.
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