While some of the initial hype and hysteria has died down, there’s still a lot of interest in investing in cryptos. While actual ‘mining’ for crypto may not be viable for everyone, crypto trading is available for any and all investors that wish to delve into this exciting industry.
However, getting started can be more than a little daunting, confusing and even overwhelming simply due to the inherent differences with trading on fiat (traditional currency) exchanges.
With that in mind, today I wanted to breakdown a few essential tips that you should consider before moving into crypto trading.
Always Research
No matter who or what points you in the direction of a particular currency or ICO (Initial Coin Offering), you have to take the time to do a little homework. Read reviews from several reputable sources and check out Reddit and other social media platforms to get a feel for what the actual community has to say about it.
This also includes which wallet and exchange you select as well (discussed below). You have to remember that your cryptocurrency will represent real dollars and as such, you have to treat it just like you would any other investment.
Ensure that you’re dealing with reputable services, fully read through their terms of services (TOS) to forego any future surprises, and that the currency you’re investing in isn’t a scam.
Choose Your Exchange
To invest in cryptocurrency, you’ll have to do the same as you would for fiat finance trading — select a place where the various currencies are traded. This will require you to register an account with your personal information and that you fund the account, which goes back to the previous section about doing some prior legwork.
The various exchanges will also have their own fees and TOS, and some of them don’t even accept fiat money at all, meaning you’ll have to buy cryptocurrency such as Bitcoin or Ether first, and then deposit those coins into the exchange before you can start trading. However, there are also exchange-broker-wallet hybrids where you can do everything in one place but all of these various platforms can be significantly different, so you may even want to interact with a couple of exchanges before actually funding your account.
On a final note, there have been several instances where exchanges suddenly terminated their operations with little-to-no explanation, leaving investors with a complete loss of all funds.
This is why it is crucial that you select a trusted exchange. In the beginning, you may want to go with one of the bigger and most well-known options.
Pick a Wallet
Your “wallet” is what allows you to store and send currency back and forth, hopefully securely. Just as there are literally dozens upon dozens of cryptocurrency exchanges, there are also numerous wallets available as well.
Just about every major cryptocurrency these days has their own official wallet, such as: Bitcoin Core Wallet, Litecoin-QT, Ethereum Wallet, and MyEtherWallet.
However, if you’re wanting to trade among a variety of currencies, you’ll need a multi-currency wallet such as: Coinomi, Jaxx Wallet and Exodus, or utilize an exchange that provides a built-in wallet like Coinbase or Poloniex.
First, Foremost, & Always — Security
Yup, I know it’s the last section, but I did it on purpose. Security is the absolute most important tip that you have to walk away with today.
As mentioned above, you have to keep in mind that you are indeed dealing with real-world money and that you must treat it as you would any financial information. There are over 200 crypto exchanges these days with billions of dollars of trade volume and of course where there’s that kind of money, there’s always going to be nefarious entities that spend all of their time attempting to break into these exchanges and those that wish to take advantage of unsuspecting “newbies.”
In recent years there have been multiple exchanges and wallets that were hacked, resulting in the loss of hundreds of million of dollars. While I’ve covered the importance of researching your potential investments, exchanges and wallets, you also need to ensure that you’re properly protecting yourself each and every step of the way.
Starting with the email account you use for signup on exchanges and wallets, you need to ensure that your password is as secure as possible. Not only an alphanumeric combination, but one that isn’t easily guessed or “cracked” using your public social media information. You also need to store this information somewhere safe, not on your desktop, a note on your phone, or on a slip of paper in your desk.
This same logic goes for your exchange and especially your wallet information. You have to have strong passwords and store that information someplace safe, preferably “offline” in the case of your wallet.
Do some background work, utilize security-conscious practices, and secure yourself a solid foundation as you move into the world of crypto trading.
Things to Know Before Starting Crypto Trading
