If you are seriously thinking about making money with Bitcoin and other digital currencies, then you can’t do without the knowledge of how to trade on a cryptocurrency exchange.
First of all, these exchanges present one of the few current possibilities to buy/sell blockchain-based digital assets since the official financial institutions are still ignoring this type of money.
Secondly, if you don’t engage in trading activities on the exchanges but instead just hold (or HODL, as they call it in crypto slang) a certain amount of coins on your account, you are missing out on a marvelous opportunity to make money on the fluctuations of exchange rates.
We should warn you beforehand that trading is a risky endeavor that requires a comprehensive expertise and a set of mental skills. When embarking on that path, you should be aware and prepared for the possibility of losing all your investments. However, if you manage to attain an insight into the basic principle of trading on a crypto exchange, you may have a good chance of augmenting your capital in a relatively short period of time.
Choosing crypto exchange
If you don’t possess any cryptocurrency, and you would like to purchase it using fiat money before engaging into trading, then you should create an account on a crypto exchange that allows such conversion or use the online fiat/crypto exchange office. However, you should always take into account the amount of transaction fees that the exchanges or online exchange offices impose on users. We recommend you to consider using the following crypto exchanges:
- Cex.io – a British exchange that is regarded by many as one of the most reliable.
- Kraken – a popular American exchange with relatively low commission fees and high daily trading volumes.
- Yobit – the most suitable exchange for Russian-speaking traders. It provides an opportunity to purchase cryptocurrencies using Rubles. Yobit features an extensive list of trading pairs and tokens that aren’t listed on any other major exchanges. If you want to reap benefits from the sharp price increase of a token that has been recently introduced through ICO, then you should definitely use that particular exchange.
- Binance – a young but rapidly developing crypto exchange that is located in Shanghai. It doesn’t offer an option to trade in fiat, though users can benefit from the remarkably low trading fees (0.1%) which could be further lowered through purchasing the Binance Coin (BNB).
The beginner’s guide to trading cryptocurrencies
The following guide was made using an example of Binance because it is one of the most profitable and progressive exchanges in the crypto world which offers a good trading experience.
First things first, you need to purchase some cryptocurrency. We recommend using bestexchange.ru where you will easily find a suitable online exchange office.
But before you convert fiat money to cryptocurrency, you will have to create an account on Binance. The process of registration is rather simple: you only need to provide your e-mail address and enter a strong password.
After the successful registration, go to “Funds – Balances” and choose the required cryptocurrency, and then click on “Deposit”. The system will generate an address of a digital wallet which you should indicate in the corresponding field in the menu of the online exchange office of your choice.
Once you have deposited some cryptocurrency to your account, go to the “Exchange” tab and choose “Basic”. Here you will find the trading graph which indicates the exchange rate at the given moment of time, an order book, and two boxes where you can either sell or buy cryptocurrency.
The graph serves for analyzing the current exchange rates using technical or fundamental analysis. The order book shows the statistical data as well as the volume of completed transactions in a certain time frame. Placing an order basically means making a request a buy or sell cryptocurrency at the desired price.
For instance, you want to sell 20 coins for $10 each, while the current price per coin is at $6. In order to do that, you have to indicate the price and the number of coins you want to sell in the box labeled “Sell BTC/ETH or any other abbreviation of coin name”. Then just click “Sell BTC” and your sell order will be formed. Once the price reaches $10, the order will be executed and you will see new cryptocurrency on your account. In case you want to buy cryptocurrency, you should perform the same steps, only choose the “Buy BTC” box.
Congrats, you have officially become a crypto trader! Certainly, this small guide represents only the tip of the iceberg that is called Trading on a crypto exchange. In order to trade like a pro, you would have to acquire a lot of knowledge, make plenty of mistakes, and gain valuable experience. However, the most important thing on your way to enormous profits is to make the first step.