How to Trade Cryptocurrency – For Beginners: Part II
Hey! It’s great to have you back! In Part I, you found out why you might like to trade cryptocurrencies, what to consider before you start trading, what cryptocurrency trading really is, and which crypto exchange and strategy you can choose. We also gave you some tips on what to look for and what to definitely avoid as a beginner trader.
Now that you know the basics, let’s dive a little deeper!
Starting to Trade
To physically start trading, you need to select a cryptocoin exchange. There are several exchanges that are recommended specially for beginners, and CoinMetro is the most recent and advanced of them all. This exchange focuses on both super-simple user interfaces and detailed visuals (for the pros), all backed-up with technological know-how, efficiency, and reliability.
The next step is to register, verify your account (by passing the KYC process), and start exploring the platform. The registration process should be easy as you are guided step-by-step, but learning how to use the platform might take a little longer. Some of them can be really overwhelming.
CoinMetro’s Exchange was built to simplify Crypto for all, regardless of experience. Sign up and play around!
When you get to know the platform, its functions and features, there’s no better advice than to actually start trading. You only learn through hands-on experience. Never forget the golden rule of the Crypto-verse: the market moves very quickly, so don’t start trading when the prices are at their highest or selling when the prices have plunged.
To learn more about Crypto and to become a fully certified Crypto graduate, you should sign up to the CoinMetro Crypto Academy – a free educational course packed full of awesome information (coming soon)!
How to Analyse a Cryptocurrency (You Want to Buy!)
Crypto-tokens are based on blockchain technology, which we’ve explained in plain English in one of our previous articles, but they are (almost) all different. We’ve put together a short list which will help you understand how to analyse each Crypto and make better-informed trading decisions.
- Market capitalization. Market cap measures the value of a cryptocurrency. It’s calculated by multiplying the circulating supply of tokens by the current price. If you’ve read everything about trading bitcoins for beginners, you probably know that that Bitcoin’s market cap is $104,190,550,823, or 17,209,025 BTC (circulating supply) x $6,054.41 (current price at the moment of writing).
- Transaction processing speed (TPS). Did you know that Bitcoin has the slowest TPS? The more recently a Crypto was created, generally the faster the TPS as it all lies in technological advancement. If you’re keen on finding out more, you can easily google for which crypto is the fastest (because you already know which one is the slowest!).
- Purpose. Every Crypto serves a purpose. For example, Bitcoin and Litecoin aim at becoming new forms of payment, whereas Ethereum, for instance, focuses on cloud computing. Always make sure you know what you’re be dealing with!
- Background. It’s worth researching the founders of the chosen cryptocurrency to know how reputable they and the altcoin they created are. The statistics show that many coins turn out to be a scam, and too many fail within just a few months following their launch.
Which Cryptocurrency to Buy First?
The answer is… Bitcoin. If you don’t know which coin to start with or you are in doubt, always buy Bitcoin, the digital Gold.
Technically, you can never go wrong with buying the fundamental Bitcoin and Ethereum. These two coins are available virtually everywhere and you’ll definitely need them later to buy smaller altcoins.
I Bought Crypto, What’s Next?
Amazing! The next thing you need to learn is that there are two types of wallets to store cryptocoins – hot and cold wallets. The easiest way to explain the difference would be to say that a hot wallet is connected to the Internet, and a cold wallet is not.
Exchange wallet: No doubt, the most convenient way to store your digital money. You can access your account whenever you want and start trading instantly, without having to transfer money back and forth.
Mobile wallet: There are apps available to store your cryptocoins. Make sure to keep your phone safe at all times. If something happens to it, both your wallet and your money are gone.
Desktop wallet: Then, there are similar apps for your desktop. The operational principle is the same as with mobile wallets. Should something happen to your device, you lose your digital funds in a flash.
Hardware device wallet: This wallet comes with one of the hardware devices that are built for storing cryptocurrency keys. There are public and private keys. A public key is public, obviously, available to everyone through a corresponding directory. A private key, however, must be always kept private. Keep in mind that both keys are mathematically related: one’s private key can open their public key and vice versa. If you lose your private key, your public key and the funds become inaccessible and get lost in the blockchain forever.
Paper wallet: Yes, in the Information Age, you can still store important information on paper. Of course, you need to store this paper somewhere safe, for example, in a deposit box, because paper can get lost, thrown away, etc. You don’t want to lose your money due to clumsiness or spilled coffee.
This is the end to our how-to guide!
If you’ve read Part I and Part II from beginning to end, you should now have a general idea of what cryptocurrency trading is and how to start trading.
Whatever the size of your capital, you will be able to trade Cryptos and, potentially, benefit from it. Trading is a tricky business that requires time and experience, so as a beginner, take these rose-tinted glasses off. There’s no shortcut to instant millions, even in the Crypto-world.
We hope you enjoyed this article. Don’t stop there and read more about blockchain technology, cryptocurrencies, as well as company news and developments in the CoinMetro Blog!
The CoinMetro Team