While some people still consider cryptocurrencies as fringe investments, it’s still dominating the virtual financial industry. So, if you’ve been looking for a way to invest in this burgeoning technology and its growing ecosystem, you needn’t look much farther than trading cryptocurrency.
Since there are so many different exchanges to trade cryptocurrency in various ways, it can be challenging to figure out how you should get started with crypto copy trading. A lot of people now use copy trading platforms, and this is how they open an account:
Step 1: Find An Exchange
Before you start trading, finding a place to commence the trading is essential. You must use trading platforms where you’ll execute your trades. It’s also a place to see detailed information about any cryptocurrency or token.
You can also use web-based exchanges to buy and sell cryptocurrencies directly from your browser on any device. The best part? There are no software downloads needed. But if you want an app for your exchange, you can also find ones with a reliable application to make things less hassle for traders like you.
Step 2: Create Your Cryptocurrency Wallet
To open a cryptocurrency trading account, you must create your cryptocurrency wallet. There are many types of wallets, and they all have different features.
Some may be more secure than others, some may be easy for beginners, and some can house multiple cryptocurrencies. You only need to choose a wallet based on your needs. It doesn’t matter that you’ll be controlling a small account. Having a secured wallet will protect you from hackers.
Step 3: Open Your Trading Account
With this process, you need to fill in personal information like your name, address, and date of birth. You’ll also need to include details about the type of account you want to open (retail or institutional). You may even need to include details about your funding/bank account from where you will transfer your funds. Some platforms may also require you of your KYC documents to ensure that you’re a real person registering an account. These documents verify your name and address as they are crucial for security measures with your account.
Step 4: Deposit Funds Into The Account
After submitting your account application and verifying your identity, you can deposit funds into the account. The amount of money you deposit will determine how much you can trade. But ensure to invest only the amount you can afford to lose.
You can use a wire transfer or regular credit card payment to fund the account, but there are fees associated with this method. Bitcoin is currently the most popular cryptocurrency available for trading, so most platforms accept bitcoin deposits from clients to fund their accounts.
Step 5: Research Cryptocurrency Prices
Now it’s time to do some research. You’ll want to know the value of the cryptocurrency concerning other cryptocurrencies and its market cap compared to them.
It is essential if you’re looking for a specific type of investment. You’ll discover that one coin is at an all-time high, but another currency has just launched, showing little to no promise.
Step 6: Place A Buy Order On The Exchange
Finally, you will use the exchange to place a buy order. You want to buy your currency at a lower price than what it’s currently trading for on the market. The higher the buy order, the lower the price you will pay (and vice versa).
Step 7: Choose Your Application For Mobile Trading
Depending on which platform you choose, there are different options available. Some cryptocurrency exchanges offer web-based applications that allow you to access your account from any device with an internet connection. Some have dedicated apps that are downloadable onto your smartphone or tablet.
If you don’t have time to monitor the market 24/7, your chosen platform should offer a mobile trading service. It will allow you to trade anytime and anywhere as long as cell phone coverage is present.
Make sure that your selected exchange’s app is easy to use. Otherwise, you’ll spend more time figuring out how everything works than getting started.
Step 8: Risk Management Is Always Important
Risk management is a crucial component of cryptocurrency trading, and the more you know about it, the better. The first thing you should do when entering any trade is to calculate your risks. How much are you risking on this trade, and is it worth it if it goes south? If it’s not, don’t make the transaction.
Also, learn to diversify your investments. By buying many different cryptocurrencies at once, you’ll protect against risk. You’re spreading investments across several coins instead of putting all eggs in one basket.
Also, use a stop-loss order. It can either reduce losses or prevent them altogether. When properly used, these orders allow traders who had entered positions without paying attention (like during news events that can cause large price swings) from losing too much money because their orders were automatically filled before prices changed drastically.
Now, you should be able to open a cryptocurrency trading account. You should be able to deposit funds into your account, research prices, and start trading. By following the other steps above, you won’t waste time creating a trading account.