RoyalCBank — How to Start in Trading Cryptocurrency, Tips for Beginners to Follow
Cryptocurrency trading has often been compared to forex trading. It is much like permitted traders buy cryptocurrency in exchange of USD in place of any other currency. Just like forex trade, it is up to you to buy and hold or buy and sell at a profit depending on its volatility.
There are several strategies in which you can make potential profits by trading in crypto. Investors or traders looking for ways to trade in crypto should first practice trading in a demo account at a particular exchange and then trade with real money to avoid making losses in the beginning.
In order to trade in cryptocurrency, you have two options: either use an exchange or select a broken. With and exchange, you will purchase and sell the coins directly. With a broker, you will purchase a Contract for Difference.
How do you trade in cryptocurrency?
The cryptocurrency trading mechanics depend on the exchange but it is more or less similar to stock market broker trading where buyers and sellers place their respective order at a desired price and quantity- and those who like to buy and sell at that particular price and quantity will get their order executed.
Usually, you can cancel your limit order if the price hasn’t reached your target or if you change the plan. But, once the market order is made, it is not reversible.
How to make profits in cryptocurrency trading?
Similar to stock market, cryptocurrency trading has both gains and losses.
Long term trends: Many cryptocurrency traders don’t trade a lot but do long term investments to make long-term gains.
Volatility trading: Being one of the most volatile investments, cryptocurrency can help you make significant profits during up and down swings. If you are an active day trader, then you need to follow some technical analysis indicators for help.
Fortunately, platforms like RoyalCBank.com are now available for users that can help you get started with.
Risks involved in cryptocurrency trading
Government regulations are a concern and it is tough to think that when government will not regulate a currency, will that flourish or not. However, SEC has labeled cryptocurrency as securities. However, cryptocurrency isn’t illegal yet and is allowed for trading and investment in a lot of nations, under regulation.
In the year 2017, more than half of the ICOs (Initial coin offerings) failed. These currencies failed to get up after initial fundraising. Hence, it is important to only trade and invest in the known coins, and not go for the recently launched coins that lack trust.
Going for all in one currency may be highly risky because of the volatility of the cryptocurrencies. Hence, beginner traders should begin slow and should only trade with a small amount of their total fund. It is also very important to limit losses so that you can continue trading.
Cryptocurrency is one of the newest assets in the trading market. As the market is still young, it lacks protection of the traders. It is important to remember that any cryptocurrency can gain favor or fall overnight. But, in the near future, cryptocurrencies will be here as they have already created their place among traders and investors.