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Buying and selling cryptocurrency

An as an investor, you need to understand that cryptocurrency is highly volatile. Therefore, you need to time the market more than conventional investments to make good returns.

What is cryptocurrency?

Cryptocurrencies are the digital coin that live on the blockchain. It is a decentralized computer network that records all transactions. The value of crypto is determined by how many people buy it. That is why it does not depend on central authority like traditional currencies depend on banks.

Cryptocurrency is secured by cryptography that ensure and checks that currencies are not spend twice. On the other hand, blockchain technology, which is a distribution of ledger enabled by another network of computers.

 

Buying and selling cryptocurrency

Buying and selling cryptocurrency

What is cryptocurrency trading?

As a cryptocurrency trader, you aim is either accumulate Bitcoin or to make a profit in dollars. It is very easy to increase your portfolio in dollars while trading your crypto in the bull market. However, it is not that easy increasing your Bitcoin value.

You can therefore trade your Bitcoin for alternative coins (altcoins) like Coinbase Pro in order to track your Bitcoin value.

However, you are taking risk by buying and selling your cryptocurrency. You may lose as well as gain in the market. Although, it is rare for traders to suddenly lose money because the market is volatile.   

By actively trading your cryptocurrency, you risk losing your crypto to the market. Since cryptocurrency prices are so volatile, it’s not uncommon for traders to lose money quickly trading cryptocurrencies. This is why so many crypto enthusiasts just HODL their Bitcoin.

Similar to traditional exchanges, traders will earn gradually has price rises.

How to buy cryptocurrency

Exchanges are out there more than willing to assist traders procure crytocrrency. For beginners, Coinbase will be an option.

Binance, Luno, eToro and many other platform to trade. You will need to make your findings to know which offer lower commission.

Most important factor to look out for in a cryptocurrency exchanges are secure, quick setting up, ease of use, flexibility in funding and overall efficiency.

For each of the exchanges, you will be required to verify your identity after registration.

Account set up

After verifying your account with your preferred exchange, you will then need to stock your cryptocurrency wallet.

For will need a brokerage account, who will be exposed to the maret on your behave.

Which currencies are you buying and selling

Amongs thousands of cryptocurrencies in the market, you have to settle for one or two. Precisely, trade the major currencies, like Bitcoin, Ethereum, Dogecoins, Litocoins. New altcoins are added, so you can trade them as well. But do your diligence to know about them..

Strategize before trading

Better understanding of the market puts you on the hedge. Cryptocurrency pricing depends on a many factors.

Government regulations, businessmen and media influence have being a major influence in the last 2 years. Dollar influence cannot be neglected as well.

Place your order strategically

Next step in trading is to define your ‘close’ conditions – i.e. the point that you will exit a trade. This can be an important discipline.

Always remember that cryptocurrencies are volatile and running large open positions is risky. At that specific moment that you attained your target, or you have hit your maximum loss, you will need to close out your position.

Set up this filter to automatically be your benchmark. It is advised to start small, or use demo account to practise. Move to real account after you have gain some experience about the market dynamics.

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