Digital currencies are money or money-like assets that are primarily exchanged on digital platforms. There are three types of digital currencies: central bank currency, virtual currency, and cryptocurrency. Since our focus is cryptocurrency, we’ll focus on it.
Cryptocurrencies are a type of digital currencies that are exchanged on digital platforms. There are two types of cryptocurrencies: Bitcoin and Altcoin.
There are several ways you can make money off cryptocurrency, one of which is cryptocurrency trading. Are you a newbie, and you’re looking for how to trade? We have carefully highlighted five steps on how to trade cryptocurrencies.
Read more about digital currency here.
Digital Steps on How to Trade Cryptocurrencies
Trading is the art of making intelligent predictions about the prices of coins in the market. If successful, you can make huge profits from trading; likewise, you can lose huge sums of money if you fail to predict well. Whichever it is, we’ll extensively explain the five steps on how to begin trading as a beginner.
Step 1:- Open a broker account
The first step to trading a digital currency is opening a broker account. A broker is a firm or a person that serves as an intermediary between a buyer and a seller. Sometimes, a broker can be either a buyer or a seller. When this happens, the broker automatically becomes the third party.
Further, a broker account allows you to buy and sell digital currencies such as securities, bonds, stocks, and cryptocurrencies. Some top brokers you can open an account with are Coinbase, Gemini, and Store.
As with every account, you’ll be providing some information when opening a broker account. Some of this information can be sensitive or not: your location, date of birth, and address.
Step 2:- Fund your account
You must fund your brokerage account before you start trading. There are two ways to fund your account: via wire transfer, debit, or credit card.
The wire transfer – linking your local bank account to your brokerage account for an easy transfer- is the most common type of transfer, and it has few risks. On the other hand, funding your account via a credit card is not generally advised because of the higher interest for exchanges.
Step 3:- Choose a coin to invest in
After funding your account, you must choose a coin you want to invest in. You can choose bitcoin or Ethereum, depending on which you’re more knowledgeable about.
After you have chosen the coin you want to trade-in, you can enter the ticker symbol of the coin. The common cryptocurrencies symbols are
- Bitcoin {BTC}
- Ethereum {ETH}
- Tether {USDT}
- Cadano {ADA}
- Binance {BNB}
- Uniswap {UNI}
- Polka dot{DOT}
- Dogecoin {DOGE}
Step 4:- Choose a storage method for your funds
Choosing a crypto storage method is as important as trading itself. A crypto storage medium is called a wallet, where you can store your funds before trading. There are three types of wallets:
- Exchange wallets: they often come with exchange platforms.
- Hot wallets: they’re online wallets
- Cold wallets: they’re offline wallets.
Wallets are there to secure your funds if you lose your passwords.
Step 5:- Begin trading
Choose coins that are sure to gain more profits in a short time {short term trading} or in a long time {long term trading}. You can also use trading bots; they provide significant returns based on your investment.
To Wrap it Up
Trading as a newbie has never been this easy. We have carefully simplified steps on how to trade successfully as a beginner. You can start trading by opening a broker account, then fund your account, choose the coin to start trade with and begin trading.
Meta Description: Cryptocurrencies can be complicated to wrap your head around, but it’s easier than you think. Here is a step-by-step guide to help you get started.
