Trading cryptocurrency can be a great way to make money online. Cryptocurrency prices can be highly volatile, which presents an excellent opportunity for traders that know what they’re doing. Before you get started, it’s important to understand what precautions you should take to stay safe. In this article, we’ll answer questions such as is Bitcoineer legit and others that you need to know before you start trading.
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Choosing the Right Exchange
To begin buying crypto and trading it effectively, you need to first sign up to an exchange. A crypto exchange is simply a site where you can buy and sell cryptocurrency, and there are a lot of different options to choose from. Some are definitely better than others, both in terms of features and safety.
Your safety is one of the most important factors to consider when choosing an exchange. After all, it’s your money that’s at risk when trading. Therefore, it’s important to only ever use trusted exchanges that have a great reputation. Likewise, you’ll also want to avoid exchanges that have come under fire for mistreating customers or using shady practices.
Aside from looking at the reputation of a site, you can also assess its safety by looking at two key features. The first of these is encryption. Does the exchange use encryption to keep customer data and payment information secure? Secondly, you can also look at the customer support options available. Trusted exchanges always have helpful and responsive customer service.
Managing Risk
Trading and investing in cryptocurrency carry an inherent risk. While prices can go up, they can also fall, and there have been numerous market crashes in the short history of cryptocurrency. Before you start trading, it’s important to understand the risks involved and know how to manage them if you want to stay safe.
The most important thing to remember when it comes to managing risk is that you should only ever invest what you can afford to lose. While it can be tempting to invest as much as possible when you see the prices rising, it could potentially put you into financial difficulty if prices then fall. On that note, you should also avoid trading using leverage, where you borrow capital to make trades.
Perhaps most importantly of all, you should have a clear plan when you begin trading crypto. This means working out which popular cryptocurrencies you’ll trade and what techniques you’ll use to assess the market. Failing to have a strategy in place could increase the risks you face when trading.
Keeping Your Coins Safe
Aside from staying safe while trading, you also need to keep your crypto safe. Hackers pose a serious threat to crypto traders, as they can steal all of your money if you don’t take the right precautions. Unlike money in your bank, crypto isn’t insured and cannot be replaced if it’s stolen. Therefore, it’s your own responsibility to keep your coins safe.
The number one rule of protecting your crypto is “not your keys, not your coins.” In other words, you should avoid keeping your coins anywhere that doesn’t give you sole ownership of the private keys. Most traders keep their coins on an exchange for convenience, but if you’re not currently trading, it’s a good idea to store your crypto in a wallet.
If you have large amounts of crypto to store, it’s best to get a hardware wallet, as these can’t easily be hacked. Offline wallets are also popular, although these do make it more difficult to trade. If you’re trading regularly and keeping coins on an exchange, ensure you have a strong password and two-factor authentication enabled.
