If you are planning to invest in crypto, then consider purchasing or trading what will suit your purpose best Cryptocurrencies have been nothing if it did not excite the investors as it does. It has its natural appeal and it lures traders to get big returns on offer. The volatility of the cryptocurrencies offer great opportunities to those looking for trading on price movement. If you want to try your hand, then here are some steps to take:
Plan whether you want to purchase or trade
You can either decide to own some units of cryptocurrency or to trade on its price. When you are trading you speculate the price without taking the ownership of the coins, with the help of derivatives trading instruments also known as CFDs.
With trading you only have to use a small proportion of your complete position size. It permits you to have a leveraged position on the price, and get wider profits with your low invested amount. You have a number of tax benefits to trading over investment. You don’t need to pay capital gains on the profits, whereas if you have to pay it when you are purchasing or selling cryptocurrencies directly. Also, the trading method magnifies your losses if your strategy goes wrong.
Set your account
In order to purchase cryptocurrency, you need an exchange. It means you have to create an account where you can buy and store the crypto coins in your digital wallet.
If you just want to trade cryptocurrency, you need a brokerage account, rather than using the underlying exchange straightforward. The broker gets exposed to market on your behalf. It is simple to set up.
Know which digital currency you want to purchase or sell
You have over 1700 cryptocurrencies in reality and you cannot trade in all. However, you can pick the major currencies to trade in such as Bitcoin, Bitcoin Cash, Ripple, Litecoin and Ethereum. With so many currencies around, it is recommended to choose the ones that are known, rather than pick a new coin.
Have a good trading strategy
You need to ensure that you know the market and understand its movement. The pricing of the cryptocurrencies and its movement depends on a lot of factors. The prices get influenced by government regulations, media news and changes in the USD. The more people will get involved with cryptocurrencies, the more influence the factors will get.
Use your strategy by doing trades
Once you have made your trading strategy, you need to decide when to close your trade. It is an important discipline. Cryptocurrencies are extremely volatile and hence large opening positions can be risky. As soon you reach your target or hit profit or loss, you should close your position. You can also start with a demo account where you can practice and know how the market works.
If you really want to explore a good trading platform, then Currency.com is the best option for you. It is a UK regulated exchange with secure storage wallet to buy and trade in cryptocurrencies and other digital assets.