Cryptocurrency has been the cause of much scrutiny and financial discourse in recent years. A growing number of traders have begun to recognize its benefits and include it in their portfolios. Diversified assets offer the possibility for higher, continuous revenue since even if one of them fails, you’ve still got the others to rely on. For this reason, crypto has evolved from a largely unknown holding, understood and appreciated by just a few niche groups, to the well-known asset of today. And it is only ever progressing. In fact, many believe that crypto will become as vital for the economy as fiat currency is and that it won’t be long until people use it on a daily basis.
“And while it’s not difficult to envision that future, there’s going to be a while until it is achieved. In the meantime, however, you can focus on performing successful crypto trades that’ll bring you significant revenue. If you’re taking your first steps as a trader, you might still be uncertain about the steps you need to take to ensure your ventures are successful. Here are some of the things you should have in mind.
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Choose your crypto
Since its appearance on the market a little over a decade ago, the number of digital coins has continuously risen. Nowadays, you have the opportunity to trade over 12,000 cyber currencies. In the last two years, this growth has been particularly astonishing. By the end of 2021, 1,000 new cryptocurrencies were entering the market every month. This steep increase means that the number of cryptos more than doubled between 2021 and 2022.
However, not all crypto was created equal. As a general rule, digital money is known for its high volatility. This has led many detractors to deem it a risky endeavor, and as such, one that any knowledgeable trader looking for profit rather than failure should steer clear from. However, this risk is mediated to a certain degree if you invest in well-established names in the market.
Bitcoin is the best example. As the first crypto, it has served as the blueprint for altcoins, which all use its blockchain technology. It is also safer than its peers, and while BTC transactions may take a little longer to complete, this is due to the added security features. While price variations are not uncommon, they are generally less drastic and easier to predict.
If you want to become a successful trader, you must do your research and gain a decent amount of know-how on how the blockchain operates. One of the most important things to do is to gain expertise in the way prices change in the crypto world. While 100% accurate predictions are impossible, there are still ways to better understand the direction digital currency will take.
When you’re trading in BTC, checking a Bitcoin price chart is imperative for your capacity to spot favorable investment opportunities. When you learn to read these figures, you’ll get better insight into the price and volume of Bitcoin and the time intervals between them from a historical perspective. You can estimate future trends and know the best times to buy or sell based on past patterns.
Make sure you get a good grasp on reading charts and spotting patterns. One of the most famous graphs is the Japanese Candlestick. Their purpose is to analyze price action quickly, particularly in the case of technical trading. They showcase the highest and lowest points, as well as the opening and closing prices. Depending on the shape, size and color of the candlesticks, you can take a different position or change your trading strategy to fit the new markers.
Make sure to be on the lookout for bullish and bearish trends. While the market is currently traversing a decidedly bearish episode, you don’t want to miss out on the occasional spike. During these short periods, you might be able to complete very successful trades if only you know how to capitalize on them. Similarly, you should be aware of the shooting star candle pattern. This bearish reversal occurs at the height of a rally before reversing down. Typically, it indicates drive-by buyers who are met by resistance.
Choose an exchange
Exchanges are the most popular way of investing in crypto. Before you settle on one, however, you must take your time and do your research. You need to make an objective decision since you’re discussing your finances. The best bet is a reputable exchange that offers a large selection of currencies. This way, you get to benefit from both the safety measures of an official trading platform and the possibility to branch out your trades with other digital coins should you choose to.
To begin trading, you need to set up an account. Unlike accounts on other platforms, you’ll also have to provide proof of identification to complete the registration process. This step might last a little longer to complete but is vital in order to ensure your trading safety. The next step is funding your exchange account with a fiat currency. Typically, the exchange will provide detailed steps on how to place an order for your cryptocurrency of choice.
Your Bitcoin continues to exist on the blockchain, and you access it with the help of security keys. Keeping these codes safe should be one of your top priorities as a trader since, in their absence, your crypto becomes permanently lost. When you start trading, you’ll learn that you can also store your BTC on the exchange for a small fee, but as a general rule, you should try and avoid this situation. A hardware wallet is the sturdiest and safest option. Not only is it improbable to fall prey to hackers, given its lack of internet connectivity, but it is also the best option if you want to pursue long-term trading and expect to own a larger volume of crypto.
Crypto is one of the most popular assets to own these days. Given all the hype surrounding it, it can be easy to fall into the trap of becoming a trader without taking the time to learn about crypto. But when you come into the crypto ecosystem with a bit of prior knowledge, you have all the more chances to perform rewarding trades.