Learning how to trade with cryptocurrency can be scary. In this guide, we break down the basics to help you feel more comfortable trading with crypto.
Learning how to trade with cryptocurrency can be scary. In this guide, we break down the basics to help you feel more comfortable trading with crypto.
Interested in the world of cryptocurrency and want to begin trading? If you are unsure of what cryptocurrency trading is and how it works, then this guide is for you. Let’s break down the basics to help get you started.
As a note to begin with, trading in any capacity, much more so with cryptocurrency, comes with a great deal of risk. Investments can be volatile at the best of times. With cryptocurrency, even the most popular currencies, such as Bitcoin, suffer from huge volatility on a regular basis. Before making any move, ensure you have done your own research and are happy with the decisions you are going to make, and only invest as much as you can afford to lose.
Before you can start trading, you will first need to make sure you have the following:
When delving into the world of cryptocurrency trading, you will typically start by buying your first crypto with fiat currency. Fiat refers to a national currency such as the pound or the dollar. So, an example might be that you wish to trade your USD with Bitcoin (BTC). This is something that is popular and support by a lot of exchanges.
However, once you have tested the waters, you might want to begin trading between two cryptocurrencies, such as Bitcoin and Ripple. In this case, they would be abbreviated as BTC (for Bitcoin) and XRP (for Ripple) on an exchange. For a newcomer, this can be slightly overwhelming as exchanges tend to list pairings in their abbreviated forms.
Below is a list of popular cryptocurrencies in their abbreviated forms:
Note: This list is not extensive. There are over 2,500 cryptocurrencies out there, so it would be difficult to list them all here. It would be time well spent for any newcomer to become acquainted with popular cryptocurrencies and their abbreviations before beginning to trade. Similarly, playing around with the most popular cryptocurrencies such as Bitcoin is a great starting point to get used to this type of trading.
Choosing the correct platform for you is very important. There are differences across competing exchanges, and as such, it is useful to do some research to decide which is best for your needs. Below is a brief list of some of the key things to look out for:
Below is how exchanges typically work:
If you’re looking for an exchange that can offer instant liquidity and a secure trading platform, sign up to the Coin Rivet exchange.