Overview

20/09/18 10:19 UTC-4

Crypto-exchanges: guidelines for beginners

Cryptaturrency exchanges, as a way to trade cryptocurrency
Cryptaturrency exchanges, as a way to trade cryptocurrency

A cryptocurrency exchange is an online platform and the most common way to trade cryptocurrencies. On exchanges, you can buy/sell cryptocurrencies for fiat money (couples Fiat/Crypto), as well as buy/sell cryptocurrencies for other cryptocurrencies (crypto/crypto pairs).

 

The work of the online cryptocurrency exchange

It is possible to earn money in exchangers, but on exchanges it is more profitable. Online exchangers when transferring fiat money to cryptocurrency, impose a commission fee in the form of 5-10% of the amount transferred.

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On exchanges, the commission for transfers will be only 1-5%. All deals are fair and transparent. If the operation is on the quotation, it cannot be canceled. The amount of commission depends on the exchange platform and the type of transfer. For example, the commission for transfer to fiat assets is much higher (up to 8%), but less for coins.

Choosing an online exchange:

  1. Popularity. If the stock exchange is popular among users, its work is likely to be tested and approved by many users. Also, the implementation of the currency is easier because of the large number of existing accounts.
  2. Analytics, forecasts, the study of the volatility of the course and the sale at the general auction platform – this is important. Novice traders need to learn how to properly use the information offered by the exchange.
  3. Registration – on the big exchanges often suspend the process of creating new wallets to avoid platform oversaturation with inactive accounts. Also, some countries do not allow users from other overseas cities.
  4. Trading volumes – each exchange has its own framework for depositing and withdrawing money. If you do not have enough assets to enter, you cannot get started.
  5. Simplicity – for beginners, the best option would be a simple and easy-to-use exchange.

 

Cryptocurrency pairs

Currency pairs are two currencies that the exchange allows for trading.

There may be cryptocurrency coins and fiat currency, or two kinds of digital financial assets. For example: Dollar and Bitcoin, Ethereum and Bitcoin. As a rule, the full name of currency pairs is not indicated on the stock exchange, but they use a ticker abbreviation – BTC-$. This combination will mean that it is possible to exchange Bitcoin for Dollar. When there is a task of making money on the course in relation to the dollar – you need to choose the first pair. If you have plans to trade only cryptocurrency - then vice versa. Novice traders are better off using crypto pairs that are made up of ordinary money and virtual money. Since fiat currency is more stable (less volatile), it is easier to make a forecast.

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  1. Situation in the market. For a novice trader, the best solution would be to wait for the price reduction and only then purchase coins. If the moment is missed, you should wait and buy only when the course starts to grow. The sale (exchange) of financial assets is best carried out under conditions of pronounced growth.
  2. The activity and growth of the pair in the market. The more active a couple is, the more you can earn on volatility and price changes on different exchanges (in the case of trading between several exchange platforms).
  3. Many options for buying and selling – in this situation, the buyer will be found faster. In the circle of mass trading, the emergence of a trader with a large amount of financial assets will not be noted on the course. And in a situation with "low-volume" pairs, any significant rate can turn the course in the way a trader would like.
  4. Minimum contributions and stability. It is difficult for a beginner to predict moments of significant volatility. You should not make large contributions at the very beginning of work with the exchange. The best solution is to make the minimum part to understand the essence of working with currencies.
  5. Cryptocurrency volatility. Analytics and statistics are important. As a rule, on large stock exchanges, there are special tools for calculating standard deviations and time statistics, as well as the history of transactions with buyers and sellers. Of course, the best solution will be parallel tracking of work in the global cryptocurrency market – this will help make longer forecasts.
  6. Trading tools – at times increase productivity. Also, experienced players are advised to withdraw part of the external wallets. Usually the average income is 100% per month and more. It depends on how experienced the trader is. But at the initial stage, income rarely exceeds 50% and this is pretty good.
  7. Reliability of investments – in fact, it is always realistic to remain in the black by trading any currency, regardless of whether it grows or falls. If you are interested in the concepts of trading, you will find there is such an option as a game for a fall. In other cases, if the rate of one of the currencies falls, you can always switch to another.

Editor: Yuliya Soroka

#CryptoExchange #cryptocurrency #exchange #trading #platform

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