Cryptocurrency trading can be a lucrative activity if done correctly. Unfortunately, many people jump into trading without fully understanding how it works and end up losing their money. If you’re new to cryptocurrency trading and want to avoid making the same mistakes, then this guide is for you.
In this guide, we’ll cover the basics of cryptocurrency trading, including what cryptocurrencies are, the different types of exchanges, and how to place trades. By the end of this guide, you’ll have all the information you need to start trading cryptocurrencies.
What are Cryptocurrencies?
Cryptocurrencies are digital or virtual tokens that use cryptography to secure their transactions and to control the creation of new units. Cryptocurrencies are decentralized, which means they’re not subject to government or financial institution control. Bitcoin, the first and most well-known cryptocurrency, was created in 2009.
Since then, thousands of other cryptocurrencies have been created with different features and purposes. Some popular cryptocurrencies include Ethereum, Litecoin, and Monero. Cryptocurrencies are often traded on decentralized exchanges, which we’ll discuss more in the next section.
Types of Exchanges
There are two main types of exchanges: centralized and decentralized. Centralized exchanges are run by companies and they require users to go through a Know-Your-Customer (KYC) process before they can start trading. KYC involves submitting personal documents like your passport or driver’s license for verification. Once your identity is verified, you can deposit fiat currencies (e.g., USD) or other cryptocurrencies into your account and start trading. Coinbase is an example of a centralized exchange.
Decentralized exchanges don’t require KYC because they don’t have central points of control. Instead, these exchanges use smart contracts on blockchain platforms like Ethereum to facilitate trades between users directly. Decentralized exchanges don’t currently have the same liquidity as centralized ones, but this is changing as more people use them. IDEX is an example of a decentralized exchange.
How to Place Trades
Once you have an account on a cryptocurrency exchange, you can start placing trades. For most exchanges, you’ll need to deposit funds into your account before you can start trading. To do this, you’ll need to generate a wallet address from the exchange and send your Nft Marketing Agency from your personal wallet to that address. This can usually be done by entering your wallet address into the “from”
field and selecting the amount of cryptocurrency you want to deposit into the “amount” field before clicking “send” in your personal wallet interface. Once the transaction is confirmed on the blockchain, it will show up in your balance on the exchange platform ready for trading. Note that it may take a few minutes for confirmations depending on network congestion. You can check pending trades under “orders” on most exchange platforms—it will list any unfulfilled orders until they are successfully executed or cancelled manually by you.