Since the inception of cryptocurrency which happened way back in 2009, it has grown tremendously by leaps and bounds. Initially, it used to be an unnoticeable blip on most of our computer screens and mobile phones. Now, however, it has become a globally recognized phenomenon that thousands of people utilize in hopes of earning massive fortunes.
It does not matter if a trader is trading Litecoin, Ethereum or Bitcoin, what matters is that they keep a watchful eye on growth trends and various trading patterns in order to win big with the respective cryptocurrency that they are trading. This article discusses how to trade cryptocurrency in comprehensive detail.
Different Types of Crypto currencies
Cryptocurrencies are collectively referred t as altcoins, and there are more than one thousand crypto currency types out there. For now, Bitcoin happens to be the most in-demand and most profitable crypto currency out there. It has been that way since its boom back in 2017.
People who made bitcoin investments before 2017 earned a sizeable sum of money during the bitcoin boom period. Some people even earned more than a million dollars. Needless to say, if you happen to be someone who is looking to step his or her feet in the crypto currency trading world, you have tons of choices one of the best site which can help you is xtrgate.org.
However, it would be advisable for any trader who is starting out to make sure that they steer clear from complexities and keep things as simple as they can for their own sake. It will help them to have a clearer understanding of how all crypto currencies work.
This is why you should only focus on renowned and leading crypto currency types in the beginning. The leading crypto currencies these days happen to be Ethereum and Bitcoin.
At present, Bitcoin represents close to 40 percent of the crypto currency market. Ethereum, on the other hand, represents around eighteen percent of the crypto market. This means that these two are the leading currencies that people prefer using.
Ethereum came about back in 2015 and quickly became one of the most in-demand crypto currencies out there. Some experts even say that Ethereum is more than capable of toppling bitcoin in the future if it stays stable and does not fluctuate like most other crypto currencies do.
Other less common, yet actively traded crypto currencies are as follows:
For those who did not know, specialized computers are used for generating crypto currencies. The process used to generate crypto currencies is also referred to as mining. The reason why it is so rare is because of its high processing power for producing new coins.
It is essentially what adds value to a crypto currency. In addition there are some crypto currencies that have a certain limit when it comes to their number of coins. The creators prefer to have a limited supply of these coins. This is also referred to as finite supply.
Crypto Currency Trading – What Is It?
A lot of people tend to believe that crypto currency trading and forex trading have quite a few similarities. Truth be told, they do have several similarities. However, they also have several glaring differences. Crypto currency trading shares several similarities with forex trading because it allows traders to buy any crypto currency they want through U.S Dollars.
As far as forex goes, crypto currency traders have the liberty of trading with a holding and buying or buy and hold strategy. They can also trade on a weekly or even daily basis according to the currency’s volatility. You will even come across several stages that could potentially allow you to profit from crypto currencies when they are lowering in value.
This also includes binary options and future contracts. Because of the volatility, altcoin and bitcoin trading along with regular leverage use in these trade types is not necessarily recommended for traders who do not have much experience.
Bitcoin itself trades in thousands. It could seem as if the cost is quite pricey for most traders who are looking to get a position. However, Bitcoin or any other crypto currency for that matter is purchasable as a decimal-based upon a coin’s fraction.
Although the Bitcoin may be restricted to only twenty-one million coins, there are seventeen millions of these coins that are circulating all over the world. The ability of trading partial Bitcoin splits each of those bitcoins one hundred million times. That being said, none of the current exchanges support trade units as small as this. Some changes will however, let you specify a certain amount that you could buy.
Different Methods to Gain Crypto Currency Exposure
If you happen to be an investor who seeks a simple yet effective way for investing your money in crypto currencies, you always have the option of making investments in funds that buy altcoins or bitcoins. All of these funds carry a massive premium in comparsion to direct trading forms.
However, they significantly, make crypto currency owner ship quite simple along with offering the trader way to get exposure to several other crypto currencies that offer more conventional accounts for investments, for instance personal accounts and IRAs.
There are quite a lot of renowned crypto currency funds out there. You can choose any of them according to your liking. Just make sure that the fund or trust that you choose matches your particular needs and demands.
It is also important to keep in mind that when you utilize higher expenses for your funds, there is always a chance of low returns in comparison to direct trading in crypto currencies. That being said, there are tons of other benefits that funds can provide. In addition, they are purchasable through tons of conventional accounts for investments.
Crypto Currency Brokers and Exchanges
If you are looking forward to direct crypto currency trading instead of making investments in a fund, there are two choices that you will have. They are: use a forex broker or an exchange. If you choose an exchange, you will essentially be selling and buying the bitcoins and altcoins by yourself and doing everything directly.
The case with forex brokers however is quite different as you will be essentiall be buying a contract for difference. Just like the name suggests, contact for difference does not provide the trader the digital asset’s full ownership.
This is a major reason why most crypto currency traders rely on exchanges. Some of them even utilize multiple exchanges as getting a forex broker restricts their profitability, portability, and several other elements.
Renowned Crypto Currency Exchanges
Here are some widely recognized exchanges that you can utilize in order to start your crypto currency trading journey:
- Plus 500
- Easy markets
There are several other crypto cuyrrency exchanges out there, however, the ones mentioned above are perhaps the most relied upon exchanges for crypto currency out there.
This Is How Crypto Currency Trades Work
The main mechanics behind crypto currency trades are mainly dependent on the exchange or the market place. However, they often share quite a few similarities with stick market trade with sellers and buyers both posting their orders at set quantities and prices.
Full-featured exchanges often offer traders with a professional closer who has sufficient experience to see your trade through. This is quite close to what most people find in a large number of online brokers. In most cases, there are not particular charges if you want to cancel full-featured exchange or limit orders. That being said, you cannot reverse market orders.
How to Profit from Crypto Currency Trading?
Much akin to investing in stock market, the losses and gains that occur with crypto currencies are either on paper or appear digitally. Here are a few tips that every crypto currency trader must follow if he or she wants to profit from crypto currency trading.
Long Term Trends
Discussing long term trends seems quite counter productive, especially when Ethereum, which is the second-best crypto currency out there is just around 3 years old. That being said, if you take a look at the chart of all the leading crypto currencies since they came into being, the direction, all in all, has been upwards.
It would even be fair to say that the direction has been like a rocket. Most crypto currency traders do not trade much if at all. That being said, they do bet massive parts from their position on gains in the long term.
Failure Rate of Crypto Currencies
Although crypto currencies mostly make headlines when someone wins big through a trade there are thousands of people who lose massive amounts of money due to crypto currency trading as well. Close to half of the initial coin offerings in the year 2017 ended up failing.
The currencies in these offerings never took flight and eventually ended up failing. Naturally, the people who invested in them also failed money.
Crypto currency trading is a game of patience and skills. Both of these things can be acquired if you take enough time to learn and hone your trading skills and knowledge.