Trading cryptocurrencies is one of the most profitable investments around. Most people are making thousands of Dollars from trading these digital currencies. Its profitability is why more people are showing interest towards it, but there are certain things that should be taken into consideration before one can successfully begin trading and making profits.
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To start trading tokens, potential traders will have to already have these :
- One or two exchanges that they can buy digital tokens from (Coinbase happens to be one crypto exchange where users can invest and trade their cryptos on the same platform.)
- One or two wallets where they can store the purchased tokens.
What You Should Know Before Trading Cryptocurrencies
- Coinbase is one of the simplest exchange to buy and trade cryptocurrencies on. This exchange offers you a wallet where you can store your purchased token. Also, this platform is easy to use, making it the most recommended exchange for first time crypto traders'.
- Crypto market is highly volatile. One thing all potential traders should bear in mind is that the crypto market is very volatile, meaning that they can lose most if not all of their tokens in less than 24 hours.
- It is best that you start trading prominent cryptos. Prominent here mean the top 10 ranked cryptocurrencies, this is because the chances of losing your entire funds to the volatility of price is slim compared to when you trade other less prominent cryptos.
- Also, it is best that you fully understand how the crypto market works. You have to carry out extensive research to ensure that you fully understand and can differentiate between tokens.
What You Should Do
Trading crypto is like every other business, lack of vital information might lead to loss of funds. So it is important that you carefully take these tips into consideration.
- Select a good wallet. This is very important, you have to select a reputable wallet to store your tokens. The importance of selecting a secure wallet cannot be overemphasized. Also, if your wallet supports, you can adapt and make use of certain features to ensure further security against hacks. The two-factor authentication feature is one of these powerful security features.
- Do not store your token in an exchange. The number of hacks that have occurred since the launch of cryptocurrencies is why it is advised that you do not store your purchased tokens in an exchange. You have to immediately transfer your tokens to your wallet address.
- You have trade prominent cryptocurrencies to ensure that you do not lose all your funds.
What You Should Not Do
- Don't share your private keys. Since you cannot share your credit cards, it is important that you always keep your private keys private. If it gets into the wrong hands, the person can get access to your cryptos.
- You do not have to buy a full coin. Since most of these cryptocurrencies are expensive, you can buy fractions of these tokens to start trading with if you do not have the money.