If you’re just getting into cryptocurrency trading and investments, it can help to learn the nuts and bolts of selling and buying currency. There are a handful of tools you’ll need for the process, including trading software and a cryptocurrency wallet. You also need to gain an understanding of cryptocurrency exchanges, where people actually do the trading of the cryptocurrency. If you want to understand more about cryptocurrency exchanges are and how they work, the following basic guide can help.
What is a Cryptocurrency Exchange?
When you want to exchange cryptocurrency online, you do it on a platform called a cryptocurrency exchange. Cryptocurrency exchanges are like the stock market: you can buy and sell different amount and types of cryptocurrency, all based on the current market price for that currency. Some cryptocurrency exchanges only exchange cryptocurrencies. Others will exchange cryptocurrency for legal tender (including things like US dollars).
What Should I Expect When Entering a Cryptocurrency Exchange?
There are lots of exchanges you can choose to trade your crypto. Some of the most popular include Coinbase, LocalBitcoins, Binance, and CEX. When you go to an exchange for the first time, choose one that will allow you to buy crypto. You can do that with a credit card or by linking your bank account with the exchange.
Once you’ve linked your card or bank account to buy crypto, you have the ability to buy it. Go to a Buy/Sell cryptocurrency tab, select your payment type, enter the amount you want to type and click “buy.”
Once you have coins in your account, you can begin to use that currency for trading or investing. To buy a different cryptocurrency using the amount you already have, choose to buy one of the other coins (for example, use your Bitcoin to buy Litecoin). Then, if you want to get dollars back for your cryptocurrency, you can sell it for money (like USD).
Don’t forget that there are limits to how much you can buy and sell within a certain time period and that there are often fees involved with trading, so do your research before you begin to make sure you’re making a smart financial move.
Tips for Carrying Out a Successful Exchange of Cryptocurrency
If you want to be successful at exchanging cryptocurrency, here are some tips that you might find helpful when you’re first starting out:
Use your bank account
Try to use your bank account when you are trading cryptocurrency on an exchange. This can help because the fees are lower if you link your bank account than if you link your credit card.
Set alerts for trading
Set alerts for yourself so that you know when you should trade. You can set alerts for when the value of certain currencies rises to a particular amount or when they fall to a certain amount.
Pay attention to the market
The cryptocurrency market is ever-changing, and it can be volatile. If you want to be successful at making money with a cryptocurrency investment, you need to pay attention to the market. By staying informed and making decisions based on knowledge, you can be as certain as possible that you’re making the right moves.
Trade from your mobile device.
Don’t be glued to your desktop or need to run home in order to trade. Get an app for your exchange so that you can trade no matter where you are. This is particularly important for a market that’s changing all of the time.
Final Thoughts
Like anything, trading cryptocurrencies takes practice and dedication to succeed. Understanding the basics of an exchange is a great start to your journey in crypto. If you’re ready to take the next step in cryptocurrency investments, shoot us a message.