Cryptocurrency exchange for beginners

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03.06.2021 13:52
Cryptocurrency exchange for beginners

    The market for digital currencies, compared to markets where gold, oil, dollars and euros are traded, is young, has no control centres, investing in digital currencies is risky, but the gains, if successful, can recoup all losses. 

    The reason for the risk lies in the high volatility of cryptocurrencies and the small amount of information available for technical analysis due to the short, just over a decade, history of the market. Experienced traders have learned how to turn the high risks of cryptocurrency trading into profits, but for beginners, the unpredictable behaviour of digital currencies is dangerous. The risks of trading can be mitigated.

    What should a beginner look out for to succeed in their attempts to make money trading digital currencies on a cryptocurrency exchange? And are there decent alternatives to trading itself?

     

    CRYPTOCURRENCY EXCHANGE, WHAT IT IS, HOW IT WORKS

     

    Cryptocurrency exchanges are online venues for trading digital currencies, cryptocurrency derivatives - futures, or exchanging digital currencies for dollars, euros, or other familiar currencies. Cryptocurrency exchanges enable cryptocurrency trading, provide tools for trading, ensure the security of the trading process and are responsible for the user's funds from deposit into the customer's exchange account to withdrawal to the customer-designated crypto-purse.

    When embarking on trading on a cryptocurrency exchange, traders are looking to maximize their profits from their trades. The main task of the trader becomes to find the optimal buying price of the cryptocurrency to start trading and the profitable selling price of the cryptocurrency to exit. 

     

    HOW TO CHOOSE A CRYPTOCURRENCY EXCHANGE

     

    More than three hundred exchanges provide cryptocurrency trading services in the digital currency market. When choosing the right one, you need to pay attention to the following factors:

    • Reliability of the cryptocurrency exchange;
    • Simplicity of the interface and language support;
    • Availability/absence of user verification;
    • Methods of depositing and withdrawing funds from the exchange account;
    • List of cryptocurrency pairs available for trading, trading pairs with euros, dollars or stabelcoins.

     

    HOW TO START TRADING ON A CRYPTOCURRENCY EXCHANGE

     

    Before you start trading on an exchange, you have to decide on the trading pairs. Broex offers 30 cryptocurrencies and fiat. For beginners, choose crypto/fiat or crypto/stablecoin to trade. USD, EUR and Stablecoin exchange rates are less volatile than digital currencies and cryptocurrency movement data is easier to analyse. The cryptocurrency in the pair to be traded must be liquid, actively traded in the market. The price of liquid cryptocurrencies reacts weaker to attacks from speculators than the price of illiquid altcoins.

    Cryptocurrency is considered a risky asset; a beginner should not invest his savings in cryptocurrency, or take out a loan. An amount of no more than 10% of a novice crypto trader's total monthly income will be enough to start with. Playing "va banque" on the cryptocurrency exchange has led few people to success, due to high nervous tension and heightened anxiety, people make hasty decisions. When determining the initial investment amount, a novice player should be guided by the principle of reasonable sufficiency.

    You should buy a cryptocurrency when the rate goes down and sell it when it goes up, but you shouldn't wait for the price to peak - it is enough to wait till the price goes up almost to half of the "peak" price.

    It is not necessary to wait for the minimum and maximum of quotations. It is common for cryptocurrency exchange rates to be played by manipulators with large holdings of digital currency. By bidding on a large volume of cryptocurrency or buying it, manipulators can shift the rate in any direction by tens of per cent. Manipulative traders can create panic on the exchange, but they cannot control it. For beginners, it is better to take an average profit, without falling for the tricks.

    You should not trade cryptocurrency on short timeframes if the trading volume for the chosen currency is too low. Most likely, bots are trading, imitating the process, while real players are watching, waiting to see where the rate goes. 

    It is not a good idea to buy a single cryptocurrency with all available funds. Such a purchase transforms a beginner from a trader into a long-term investor with an uncertain outlook. It is wiser to build a cryptocurrency investment portfolio of several cryptocurrencies (see link for how to do that), distributing funds between digital currencies will help compensate for losses in case one of the selected cryptocurrencies fails.

    A novice trader should write down his/her actions in the market, make a trading plan, and follow it carefully, comparing his/her assumptions with the real picture. Collected statistics will help to plan further actions, to form a trading strategy.

    The most important and classical advice to a beginning trader - do not to believe in forecasts and analytics, which are often written in specialized cryptocurrency chat rooms. The digital currency market is young and its behaviour does not follow a mathematical model. A random player who bought a large amount of cryptocurrency, panic, fake news will easily send the rate in any direction by fifteen to twenty per cent in fifteen to twenty minutes. All rumours and pseudo-analytics are personal opinions of certain market players and can not serve as a guide for action.

     

    WHAT TO DO IF THE FIRST EXPERIENCE WAS UNSUCCESSFUL

     

    It is possible to make the right strategy, choose the best moment to buy the cryptocurrency at a low price, but the rate keeps falling and becomes lower than at the moment of purchase. There is no need to panic and sell the asset cheaply.

    Experienced traders also have bad days. If a beginner reads all of the above tips and takes them as a guide to action, the losses on one cryptocurrency will compensate for the gains on the other. The main thing that a beginning trader has to get out of first trading experiences is to know how to keep your assets during the trading day. Learning how to multiply capital comes with trading experience.

     

    A SAFE ALTERNATIVE TO CRYPTOCURRENCY EXCHANGES

     

    Broex provides beginners with optimal conditions to start earning on cryptocurrency without going into the intricacies of trading. The site's interface is in English, and the technical support team communicates in English. The site's interface is simple, understandable, and there is a special menu with hints and explanations just in case. Importantly, there is no need to study charts, charts and other trading tools. Like all licensed digital trading platforms, user verification will be required when registering on Broex. Three dozen digital currencies are available to create an investment portfolio and a smart system will tell you which assets are most relevant. A full investment portfolio with current balance indication is linked to the user's account, allowing for the quick response and decision-making on cryptocurrency actions. 

    Broex has the lowest transaction fee of 1%. Deposits and withdrawals are made to cryptocurrency wallets or bank cards.

     

    HOW MUCH CAN A BEGINNER TRADER EARN?

     

    Trader's earnings depend on his trading experience, trader's strategy in the market and the amount of invested funds. For a beginning trader, 10% of invested funds would be a good indicator of a day's work. As you gain experience, the bar of earnings will be higher. 

    Even Bloomberg analysts consider cryptocurrency trading to be a promising line of business at the moment.

     

    PRINCIPLES FOR THE NOVICE TRADER AND INVESTOR

     

    The cryptocurrency market is young and dynamic, and the rules will change over time as the popularity of digital currencies grows. The basic principles that a novice trader needs to adhere to will never change.

    • Don't be greedy. You cannot expect from the market more than it can give. If the price has reached the high or low that the trader predicts for himself, do not wait for a lower or higher price. Perform the intended operation otherwise, there is a risk of missing the point and getting nothing.
    • Be patient. High volatility does not mean that the price of a cryptocurrency is constantly spiking. Some digital coins have held the same price level for days at a time. Patience will keep you from acting rashly.
    • Analyze your actions. Data on successful and unsuccessful operations will help to create your strategy, prompt convenient moments to enter the market and exit it with profit. A successful trader relies on his analysis, while an unsuccessful one looks for hints in chat rooms and listens to advise from YouTube analytics.
    • Diversify risks. An investor should not invest all of his or her funds in one cryptocurrency asset. Investments in the leading asset should not exceed 50% of the entire investment portfolio. In this case, losses on one digital asset will cover gains from the others.
    • Maintain security. The best place to store digital currencies for a long time is in cold cryptocurrencies. The key is to remember the password. If lost, you cannot recover the password from a cold wallet. 

     

    CONCLUSION

     

    Many successful traders initially saw trading in digital currencies as an additional income, a hobby, a game. Now their trades are in the tens of thousands of dollars and 20-25% profit per day is not the limit for them.

    You can reach the same level by establishing yourself in the idea that you can, and investing in cryptocurrency. With the accumulation of experience, self-development, skills and experience of successful trading will appear. The main thing is not to stop and grow professionally.

    It is important to choose the right platform for starting and initial experience. The best support and place for a beginning crypto investor is Broex investment platform. You're reading this here - you're on the right track.

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