About cryptocurrency step by step: choosing a cryptocurrency, wallet, exchange for trading and recommendations for trading in this article
Cryptocurrencies wanted to replace "real" (fiat) money, but so far this remains only a dream. But as a tool for obtaining speculative profits, they have taken place and continue to gain popularity. Capitalization leaders are even considered to be long-term investment instruments for 3-5 years. Everyone can start making money on digital money, for this you need to do just a few simple steps.
Let us recall the terminology again. Cryptocurrency (digital cash/currency/money) is an anonymous means of payment for goods and services based on cryptographic algorithms that do not have a cash equivalent. The issue of monetary units (issue) is not controlled by any state, banking or fiscal organizations.
Digital banknotes can be exchanged for real (fiat) money at the exchange rate agreed by the participants of the transaction.
The main features of cryptocurrencies:
The names of companies and software products are indicated for information only and are not advertising. The trader makes all decisions independently.
When choosing a cryptocurrency, you need to decide on the goals of acquiring a cryptocurrency asset. It will be used for investments with the expectation of price growth in the medium and long term, or as a means of obtaining speculative profits.
For investing, it is recommended to choose currencies from the leaders in terms of capitalization. Now it is Bitcoin and Ethereum. The first one has been traded on the CME exchange since 2017; futures on Ethereum were announced at the beginning of the 2022 year if there is no force majored events in the exchange activity.
Advantages: both assets are stable as an investment. Despite periodic corrections of 15-20%, the general trend of price growth remains.
Disadvantage: The high cost requires a large initial investment or the use of large leverage when trading.
To get speculative income with small investments, it is better to choose any of the AltCoins. You need to understand that the trader makes money on the price movement; it doesn't matter if it goes up or down. The main thing is to “open with the trend”, the more often it unfolds, the more profit opportunities. Most AltCoins show high intraday volatility, making it possible to make money on short-term trades.
Advantages: no large investments are required, you can earn within the day. You can trade multiple assets at the same time.
Disadvantages: a high percentage of speculative AltCoin. It is difficult to predict their movement, new coins are constantly appearing and leaving the market. But, as the practice has shown, standard strategies and tools still work.
It should be said right away that if you plan to trade cryptocurrencies through a Forex or binary options broker, you can not open a separate wallet for digital coins. Trading takes place with a deposit, which can be in any currency. The withdrawal of profit can also be fiat or cryptocurrency.
If you decide to open a separate wallet, then you need to choose one of the options:
A common question for owners who have several electronic currencies. Do I have to install a separate application for each one, or is there a different solution? Of course, there are - these are multi-currency wallets and one of the most universal solutions will be JAXX.
When creating a wallet, the user receives two digital signatures or keys:
The keys are unique and are generated once without the possibility of recovery, thereby achieving maximum anonymity of clients. Without a private key, you won't be able to access your wallet balance, so keep it in a safe place. It is better in the form of several paper copies!
Now you need to top up your wallet. Before choosing a method, you need to clarify the status of digital money in your jurisdiction. For example, you can only own cryptocurrency, and buying/selling is prohibited, etc. If you want to buy currency “legally”, it is recommended to do it through the PayPal payment system. While the service is only available to USA residents, Bitcoin and Ethereum are available. The coins can then be exchanged for any AltCoin. The company plans to expand the list of countries, watch the situation.
If it is not possible to buy through PayPal, you can top up your wallet in the following ways:
There may not be a quick replenishment of the wallet, the period depends on the current network load, it can range from 20 minutes to several hours. However, this applies to any method of input/output.
The balance is replenished, you can start trading:
When opening an account, verification (confirmation) of personal data may be required; this means the loss of anonymity of the owner of the cryptocurrency. But, if you trade on a reliable platform, there is no other option except verification!
The question that interests novice traders is what strategies to use on cryptocurrencies that do not have "real" content and regular fundamental events? Especially AltCoin, whose chart can show price, changes a day of 15-20% within. Discussion of strategies is a topic for a separate article, but traders need to remember the following:
Despite the high volatility, basic indicators and classic technical analysis strategies work well on most cryptocurrencies. Even on AltCoin, where there are no large volumes and market makers. The main thing is strict money management without big leverage!
If the strategy shows a stable profit on the demo account and we do not cause psychological discomfort, you can open the first transaction for "real" money!
If you do not want to trade yourself, you can receive passive income using betting – the transfer of coins to the management of an exchange or a cryptocurrency investment fund. The income will be less than with speculative trading, but you can get your passive 4-6% per annum.
Cryptocurrencies can bring stable profits, open a wallet or replenish a deposit simply. The main thing is to choose the right trading strategy, so practice on a demo account is required before opening the first deal with "real" money. The market is very volatile; intraday up/down movements of 20-30% is common. You need to be calm and follow the strategy exactly, and then there will be profit.
And also you can get acquainted with this article on Yandex Zen.