Your check list before start trading in cryptocurrency

checklist before investing in cryptocurrency

Your check list before start trading in cryptocurrency

Ready to start trading?

Are you looking for the best cryptocurrency exchange to suit your needs? Are you a little unsure about which exchange will be best for you? Knowing how to buy bitcoin, Ether, Litecoin, or other cryptocurrencies is an important and essential first step in purchasing digital currency. Since you will likely be investing in bitcoin and then using it to purchase other currencies, here are some quick tips you might helpful.

Where do you live?

First, explore which exchanges operate in which parts of the world. Some are only available to residents of certain regions or countries, and may have exclusions. Take this into account when choosing yours. There’s no reason to trade in a market where you don’t live. And customer service might be an issue if the operators of the exchange aren’t native to your language.

What does the market look like?

Next, you’ll want to do a little research into the market. Which currencies are on the rise? Which ones are falling? Ask around and do some reading. This will help you determine which cryptocurrencies you’ll want to buy or trade. Knowing which currency, you want is very important. Here’s why:

What do you want to buy?

Some exchanges only deal in bitcoin, Ether, and Ripple. If this is all you’re looking for, maybe that’s the exchange you want. Or are you interested in more speculative investments? Such as the myriad of new altcoins. If so, you’ll want to investigate an exchange that allows for purchase and trading of a wider variety of currencies.

What are the fees?

Exorbitant fees will be a major sign that the exchange you’re looking at is not right for you. Shop around! With over 125 different exchanges world-wide as of December, 16th 2017 you’ll want to do your homework.

How will you be paying?

You will also be choosing an exchange based on your method of payment. So, ask yourself; are you using PayPal, wire transfer, or cash? Are you looking for an exchange that allows you to pair your bank account, credit, or debit card? These are all things to look for when reading about exchanges available in your region

What about security?

Security is also of paramount import when choosing an exchange. You don’t want to make a purchase only to find out that the exchange has been hacked and your information stolen. So, look into factors such as the security standards each exchange employs, i.e. HTTP/HTTPS, two-factor authentication, and options for Authy or Google Authenticator instead of just SMS.

Can I take my time?

Choose wisely, this is your money and your future. So, there’s no need to rush. However, as markets are on the rise the sooner you make a decision the better your position will be to make investments. Most exchanges allow you to purchase altcoins using bitcoin or ether. And the whole purpose of an exchange is to allow you to make a wide variety of trades from one currency to another.

Don’t stress.

So have fun and enjoy this emerging market! You’ll become part of a global venture that is changing the face of finance and currency as we know it. And your decision as to which exchange you choose will be a drop in the bucket that is filling up like an ocean as we speak. Though small in terms of a world-wide view your decision is an important one to you.

Fraud protection.

This may be a good time to mention fraud. Your exchange ought to implement and adhere to standards that fit your needs. If anonymity is important to you check into how your potential exchange handles Know Your Customer (KYC) standards as set down by their respective government. Coingape.com is good sources for forums on these factors.

Reviews?

Furthermore, you can always count on satisfied or dissatisfied customers to write either glowing or scathing reviews. So you’ll want to check into those as needed. Just as major players in commerce like Amazon, and Alibaba offer product reviews, so too do good exchanges make these reviews as well as their KYC guidelines public. Transparency, ultimately is really what you’re looking for.

Trust is important.

This is your money. And a good exchange will respect the fact that you’re trusting them with your financial well-being. So, look for openness, ease of operation, and a sense that there is nothing convoluted about how they are doing business. You have to be able to trust them.

Thinking long-term.

You’ll be glad you did, when, after years of business your personal information remains secure, and your proverbial nest egg grows happily while you watch from the comfort of your home or office. Another factor is how easy the exchange is to use on a mobile device. Look at the exchange on your phone, as well as your home computer, if you’ll be doing trading while on the move.

What in the world is an order book?

Finally, most exchanges with a large volume of trades publish their order book. This is simply a list of buy and sell orders that are being offered on the exchange. A high volume in this area is a dead giveaway that people are using the exchange and that in terms of liquidity the exchange is in good-standing.

What if they don’t have one (yet?)

Not all exchanges have one. That having been said, although this factor is important as to determining whether an exchange is flowing or not, bear in mind that new exchanges are happening all the time, and the best may be yet to come.

Big vs. Little

If an exchange doesn’t publish an order book it doesn’t mean that they are automatically disreputable or illegitimate, it just might not have that functionality built into its site-database yet and/or has a lesser volume than some of the bigger players.

Don’t forget to add up all the costs.

Remember, the fees that the exchange charges per transaction will be a major factor in your decision. These fees, especially if you’re a high-volume trader will add up very quickly. So, make your trades wisely, and pick an exchange that suits your specific needs and your personal preferences.

What’s your time-frame?

If time is a factor, check into the time-limits on how quickly you’ll get your bitcoins, Ether, Litecoins or other cryptocurrency after you purchase it. Some delays are expected, depending on network traffic. However, if the exchange, as a rule, holds your transactions for longer periods of time than necessary before you get your money then they certainly aren’t the right one for you.

Adding it all up.

Remember, it’s about where you live, how you’ll pay for the currency you buy/trade, the fees you’re willing to incur per transaction, and the relative security measures and identity verification that each exchange implements. Make sure the exchange is putting their customers first. Remember, this is your money, and you ought to have not just your currency transactions through the blockchain but your personal information protected.

Blockchain?

This is the beauty of cryptocurrency. Based on very strong encryption and cryptography the blockchain is a very exciting new form of not just data storage, it’s an unbreakable ledger. And with it comes the peace of mind of knowing that once something is locked into the block, it’s there forever. We hope this helps you with your decision into which exchange is right for you. Good luck and good hunting!

Let us know your thoughts on bitcoin’s in 2018 in the comments below or write to us at [email protected]

The presented content may include personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for you personal financial loss.

 

View comments
Partyush Goyal 43 Articles

A computer science engineer, I have been adamantly following the blockchain and cryptocurrency industry for the past 2 years. A crypto enthusiast and hardcore blockchain follower. Reach out to him at [email protected]

Follow Partyush @