6 Tips For Opening a Cryptocurrency Trading Account
Cryptocurrency has been making rounds globally, and even traditional investors want to dip their feet into the lucrative ocean of money that the industry offers. However, if you are a beginner and want to know all the things you can do right while opening your cryptocurrency trading account, you have stumbled upon the perfect article.
It is not easy to trade, considering the market is highly volatile. As a result, you must keep track of it every second to ensure you are not losing your hard-earned money on the market. Since cryptocurrency has progressively become a really popular digital asset, individuals are flocking to the industry thanks to an excellent return on investment and deregulation.
However, there are several factors you must consider while opening a cryptocurrency trading account. Here are some tips you must follow if you are beginning your trading journey in the cryptocurrency regime.
1. Ease of Uploading Documents
The first step of opening a cryptocurrency trading account is choosing a platform to execute trades. There are several options available for individuals worldwide, including Binance, CoinSwitch Kuber, Coinbase, Gemini, and Changelly.
However, you must decide which platform will suit your requirements best and entail features enabling the easiest interface. You must also keep in mind that uploading the documents should be a breeze regardless of the platform you choose.
You will have to upload several documents to complete the Know-Your-Customer process. Therefore, ensure that the procedure is easy and you are not bothered up to your knees with the registering process.
2. Exchanging Fiat Currency
Sometimes the crypto exchange platform you choose might not allow you to transact in your fiat currency. For instance, Binance does not allow investors living in India to trade in rupees. In such a situation, individuals residing in the country have first to convert their fiat holdings into dollars and then buy whatever cryptocurrency they want.
You can lose money when it comes to exchanging currencies. Therefore, ensure that the crypto trading platform you choose allows you to trade in your designated currency. You could end up paying more in transaction fees than earning if you do not research before signing up with a cryptocurrency exchange.
3. Look for Discounts
Several trading exchanges offer customers discounts for signing up with their platform. Therefore, look for one who is providing the best offer. The platform could ask you to watch a few videos or advertisements to promote their sponsors while endowing you with money that you can invest in cryptocurrency coins. You must research the various trading exchanges so that you can make a prudent choice while gaining some extra cash along the way.
4. Diversify your Risk
Yes, you might have heard this phrase when you were investing in the stock market, but this mantra also extends to the cryptocurrency industry. You must diversify your risk as much as you can to prevent losing your hard-earned money to the severe volatility all cryptocurrency coins exhibit.
You could consider Bitcoin as a standard of measure since all other altcoins follow its suit. Therefore, by buying several digital assets at once, you can gain more value in the long run. You could keep Bitcoin as your base asset. However, you need to get away from the same type of asset to diversify your risk.
As a result, you must look for coins that behave erratically compared to Bitcoin lows and highs. You could also hedge the risk by investing in traditional market instruments such as real estate, mutual funds, stocks, and more.
5. Research about other AltCoins
Bitcoin is not the only lucrative cryptocurrency that investors should consider putting their money in. There are so many coins on the market that you could consider investing in, such as Ethereum, Litecoin, Dogecoin, and several others. To your surprise, sometimes, altcoins can give you even more returns than the famed Bitcoin and double your money within hours.
However, please do not go investing in altcoins blindly. Research about them and the underlying technology they propagate to understand if you can hitch your trading wagon to their horse. As a result, if you are thinking of going long-term in the forex market, altcoins can provide you a lucrative return on your investment since they are also registering high trading volumes.
6. Set a Profit Margin and understand Stop Loss
As a responsible investor, you should know when you need to stop or get out of the market based on the trends the market is undergoing. Establishing a stop loss level can help you manage your losses. However, it is a characteristic most traders do not exhibit. Every beginner trader must understand that choosing a stop loss target is not something you can achieve randomly.
You must put in the research and evaluate the profit levels to reach a prudent figure. For instance, if you purchased a specific coin for $1000, set a minimum amount in your mind already at which you would be willing to sell it while minimizing your losses. This will ensure that if push comes to shove, you are prepared to walk away from the amount you have invested.
However, to reach this figure, you must analyze the latest trends and read articles related to the coin so that you do not end up making hasty decisions. To appraise yourself of all the latest industry trends and news, visit this go URL.
Conclusion
It is not easy to invest, especially in a market that changes its course within hours. Therefore, make sure that you have researched adequately before signing up with a cryptocurrency exchange and opening a trading account. And please, do not subject yourself to what the kids call it these days “FOMO or the Fear Of Missing Out.”
As an investor, trust your gut and don’t end up doing what others think is right. A coin might get pumped up for a day, but once it crashes, it can make you lose your life-long savings within hours. Therefore, be cautious and research plenty before you step into the cryptocurrency universe (and prepare yourself to take some minor losses).
