Cryptocurrency is grasping the headlines of every newspaper all around the planet. Most people go into cryptocurrency thinking they will get rich within a short time. That could happen though, but trading in cryptocurrency could also be a catastrophe.
A cryptocurrency is a virtual or digital currency for online transactions without the use of any third parties. There’s a whole lot magic that goes on behind the scenes to make this possible. Cryptocurrencies are often built using blockchain technology to control transactions. Simply, blockchain technology serves as a power source to cryptocurrency.
Bitcoin, litecoin, ethereum, peercoin, ripples, dash, zcoins, etc are all currencies available in the crypto world. All these cryptocurrencies don’t physically exist; you cannot touch and hold a bitcoin or ethereum and draw it out of your wallet in your pocket. But just because you can’t physically hold a bitcoin doesn’t mean they aren’t worth anything.
Now to the central issue, how do you learn to trade? Firstly, you need to open an account with a cryptocurrency exchange. When you need to buy something, you go to the mall or the marketplace. Getting there, you will check to see if the product you want to buy is available then you purchase it. It’s the same thing here, you need to get access to the market place then check for your preferred cryptocurrency then you purchase it. Purchasing is made by using dollar, euros, yen, etc and these are termed fiat monies.
Coinbase, Binance, tradersway, Bittrex, etc are all market places you can buy cryptocurrencies. Not all market places are the same hence background research and reading reviews will help in choosing an exchange site that suits you best. Cryptocurrency wallet is a software that is used to communicate with the crypto network. A crypto wallet is used to store, make and keep transactions. Presently, most cryptocurrencies are having their official wallet; ethereum wallet, bitcoin core wallet, dash core, litecoin QT store ethereum, bitcoin, dash coins and litecoins cryptocurrencies respectively. Exodus, coinomi, jaxwallet, etc are multi-currency wallets; they can store and make transactions with more than one cryptocurrency.
Cryptocurrencies are high erratic assets whose value climbs up and down within a short time frame. Suppose the price of 1bitcoin is 10 dollars currently, the same 1bitcoin could be bought for 100 dollars the next hour. It is a prerequisite to know everything about the coin you would want to invest in. Cryptocompare, coinmarketcap, coinmarketcal are sites you can conduct thorough research on every coin in the crypto world. Experts say the buying of a cryptocurrency shouldn’t be solely dependent on the price but the valuation, the target market of that particular coin, the technology the coin uses and the coin’s supply availability should be taking into consideration before a purchase can be made.
The trading in cryptocurrency is grouped into two; the short and long-term trading.
As the name implies, short-term trading is purchasing a coin but with the idea of keeping it for a short time. The time frame could be months, weeks, days or even hours. This is done with the hope of the coin’s price rising. The coin is sold if the price shoots up then a quick profit is made. This method offers a high percentage gain but due to crypto’s random nature, a trader has to spend much time analyzing the market.
The long-term trading on the other hand, is summarized into the slang, “HODL”, meaning “holding on for dear life”. Let me explain this by an example, suppose people who bought bitcoin in 2015 for a dollar can sell it in 2020 for $50,000. This doesn’t require any expert skills, it’s easy, and less time-consuming. A long term trader doesn’t normally analyze the market so any bad news in the market will be missed and that will be an advantage for a short-term user.
A strategy to increase profit is to apply the common basic rule, “buy low but sell high” which is part of any successful crypto trading tactics.
Talking about strategies, some experts can predict and give signals to people whether they should sell or buy. This service is not free, they do this service at a cost.
Still on the strategies, there are online jobs that pay in cryptocurrency. Some online surveys, app testing websites, reviewing websites that pay their users to do some microtasks.
Cryptocurrency is becoming one of the trending means of investing today. If you want to succeed, there’s a lot to learn, get a reliable source of information, develop a trading strategy and invest wisely.