Cryptocurrency beginner trader has to do his own research to be confident about the cryptocurrencies he chooses to invest in. You most definitely do not want to put your money in something that you do not believe in. I will show you all the necessary steps which you should take as a crypto beginner in this article, still, you are the one who has to take them. But first, let’s start with some basic facts about the cryptocurrency market.
Cryptocurrency market is open 24/7
Unlike fiat currencies, cryptocurrencies can be traded 24/7. The difference in trading volume varies during the day as traders from different countries enter the market in different time, these changes are, however of a very low significance.
Crypto market is very volatile
The cryptocurrency market can skyrocket or fall down even by dozens of percents in a matter of minutes or hours. It is completely different from stock or classic forex market and we have to realize that when investing in cryptocurrencies are capital is at a high risk. Cryptocurrencies are probably the most welcoming market, even for beginners. Nevertheless, you still need to understand that the huge price spikes that cryptocurrencies experience on a regular basis do not always bring to investors a great profit but they can also have devastating consequences on their capital. We will try to teach you steps how to significantly reduce the risks, but you still have to always take into account that the crypto market is very volatile.
1. Find a broker where you can trade cryptocurrencies
Searching for the best crypto broker is no easy tasks. There are many crypto companies that offer distinctive offer. The main aspects on which you focus are following:
Trust & Regulation
If you come from a European country, the broker should be regulated by CySEC, a regulatory body which oversees all broker’s activities, they also insure your deposits in 100% range up to 20 000 dollars. Investors from Australia should be looking for brokers with ASIC license.
Fees
The less you pay in fees the more you can earn. So it’s only logical to find a broker with the lowest fees. Most brokers charge for a spread for opening a position. Spread is the difference between what you pay for a cryptocurrency coin and between what you get when you decide to sell it again to the broker. Apart from spreads, quite a good number of brokers charge for a swap when you stay in position overnight. Such brokers are usually best for day trading cryptocurrencies and brokers with no swap are best for long-term holding.
Cryptocurrencies you want to trade
If the broker does not offer cryptocurrencies you desire to trade, there is no point in creating an account there. Check if the company you have chosen has all cryptocurrencies you plan to trade.
Leverage
Leverage can help you benefit from small price movements of cryptocurrencies. However, for beginners, I do not advise using it. Cryptocurrency market is volatile enough to make a good profit even without it.
