The cryptocurrency is on the rise. Its value has been increasing and in recent times, it has gone from US$1,000-US$10,000. This is indeed an explosive growth in the market and it is still growing as we speak. This is a good time to invest or trade in cryptocurrencies since it can fetch you a good deal of profits. If you are a beginner and are apprehending trading in cryptocurrencies because you might have to buy a cryptocurrency wallet, then let go of your fears and trust the market movements to tell you how to go about it all. We will tell you all about it in this article.
Picking a trading platform
There are a number of trading platforms and here are the differences. You can choose whichever suits your purpose.
- Available currencies
The most widely available currency is Bitcoin to USD. Other cryptocurrencies might be difficult to access from all platforms.
- Available leverage
If you prefer high risks and greater rewards then leverage is what allows you to go past your first deposit so that your gains can be multiplied. Depending upon your platform as well as your currency pair, your leverage can be anything up to 20:1 when you are dealing in cryptocurrency.
- Features of trading
If you want more control over trading, then features like stop loss, hedging can help you do that. However, these features might benefit an experienced trader more than a first-timer.
- Minimum amount
Do you have a minimum amount that you can invest? Ask yourself about your minimum and maximum amounts before investing. Ask if this setting works in your favor or you need to try something else.
How does the cryptocurrency market work?
To understand how this market works, it is imperative to know how the Forex market behaves. The Forex market is about traders buying and selling currencies among each other. To put it simply, it is about placing your bets on the difference in prices between different currencies. In this kind of trading, you need to open an account and put funds into it for trading to buy or sell currencies. You make a profit when the prices change. The cryptocurrency market works in the same way except for the fact that in this market, instead of currencies, you buy and sell things like Ethereum, Bitcoin, and Litecoin. You will not be buying the cryptocurrency itself but will simply place an order on the cryptocurrency market.