Cryptocurrency Exchanges - Types, Features, Advantages and Disadvantages
The best cryptocurrency exchange is an online platform that allows people to trade, invert, store and exchange cryptocurrency. With the help of such platforms, you can easily buy cryptocurrency through PayPal or a bank card, and start conducting your pre-selected type of trading.
The Best Cryptocurrency Exchangers:
- Binance
- BitMEX
- Coinbase Pro
- Huobi
- Kraken
- OKEx
- Bitfinex
- Bittrex
- KuCoin
- Bitstamp
There is tremendous popularity in the field of cryptocurrency, which affects all services - channels, wallets,
crypto trading bots, and including exchanges. People have one goal - to enter the market, invest money, choose their own way of trading and make a profit as a result. Few people think about the problems and pitfalls that appear when choosing services for cryptocurrency trading.
But there is one joyful fact - many of these problems can very easily be avoided if you know all the necessary characteristics and factors that you need to pay attention to when choosing the best cryptocurrency exchange.
Now hundreds of cryptocurrency exchange platforms are present, but it is tough for newcomers to distinguish them.
In this article, we will answer the following questions:
- What is cryptocurrency exchange;
- Which ones are good for spot trading, and which are for the margin trading;
- What are centralized and decentralized exchanges;
- Is it important to pass the KYC;
- How can you avoid scam exchanges;
- What types of trading are present on popular exchanges, etc.
In short, today we will plunge into the world of cryptocurrency exchanges completely so that you feel confident during any type of trading.
Let's go!
Basic Cryptocurrency Exchange Terms
To start with, we would like to present you some very important words you will definitely meet when you will start your trading path. Some of the terms are really very simple - you can hear them even in everyday conversations, but there are also some that require separate study.
Remember that all these terms and meanings are the basics that you should know so as not to make the mistake because you do not know what this or that function you just chose means.
Limit buy - a pending buy trade at a value set by a trader. This function is mainly used to enter the market if the trader is sure that the price of an asset may decrease at a certain moment, and then go up again.
Limit sell - a pending deal to sell cryptocurrency at a price higher than the current market price. It is used mainly if the trader is sure that at some point the asset value will go up and then go down again.
Arbitrage - a special type of trading in which cryptocurrencies are moved from one exchange to another in order to make a profit.
Volatility - a term that indicates the change in value over a certain period of time. Low volatility is called fluctuations in a significant range, high - on the contrary. This is one of the most important tools for identifying risks in a trading pair.
Correction - a change in the price of a cryptocurrency in the direction opposite to the current trend. In simple words, when a growing cryptocurrency rate suddenly begins to decline, and a falling one, on the contrary, begins to grow.
Trend - vector of asset price movement.
Fiat - national currencies like USD or EUR.
Fundamental analysis - assessment of the prospect of an asset and its value based on cryptocurrency news.
Basic Trader’s Tools
Traders use a variety of tools that allow them to assess the general situation in the market and determine the movement of the course in the future in order to make profitable trades.
Charts
Chart - history of the rate change of the selected trading pair. Charts can be displayed as curves or Japanese candlesticks. The latter is the most popular because it clearly demonstrates the movement of the value of a digital coin.
If the candlestick goes down (that is, at the end of the time interval, the asset value fell), then the candlestick is called bearish. Such candles become white or green on the chart. If at the moment of closing the interval the price has increased, then the candlestick is painted red and is called bullish. This separation by color allows you to visually determine when the rate was increasing and when it was decreasing.
Sell and Buy Orders
An order is a trader's main tool, with which he makes a deal, entering into it the parameters of the deal. Orders can be divided into two types:
- passive - the value of the asset in them differs significantly from the current market rate;
- aggressive - intended for trading at the current market rate.
The biggest number of movements on the charts is formed by aggressive orders. They are also called instant, since they close as quickly as possible. Passive orders represent a trader's prediction and are closed when the market matches.
Support and Resistance Levels
The value of digital coins is constantly changing. Even with an inexperienced eye, you can see that the chart is constantly jumping up and down and is very far from straightforward.
As a rule, when reaching a certain extreme point, traders enter the market or sell an asset in such a quantity that it allows to reverse the movement of the rate in the opposite direction.
At the point of resistance, the price tag hits a certain point and sellers enter the market, selling their assets at an attractive price for them, which leads to a decrease in value. At the support level, buyers enter the market who are ready to buy an asset while its value is low, which also leads to a price reversal. To accurately determine these levels, you should track the chart and find the value that makes the course regularly change the direction vector.
Trading Volume
The trading volume provides the trader with important information about the liquidity of the asset, demonstrating the total number of digital coins for which deals actions were made. The analysis of this indicator allows you to understand whether it is worth starting to play on the best cryptocurrency exchange in the selected position and will allow you to determine the profitable period for deals.
Exchanges provide trading volume in two forms:
It should also be understood that a high trading volume is not a guarantee of a strong further movement in value, and for a thorough analysis, an integrated approach and tracking of all indicators are needed.
Technical Analysis of Cryptocurrencies
Technical analysis (TA) is used to analyze the history of the market and predict changes in the value of assets in the future. This is especially important for an unstable cryptocurrency market, but at the same time, the analysis system is quite young and the TA base for cryptocurrencies is not yet well developed.
Technical analysis is based on three main indicators of charts:
- support and resistance levels;
- indicator showing the strength of the RSI trend;
- chart shapes.
How Do Cryptocurrency Exchange Platforms Work?
Today we could start talking about all sorts of things for programmers - about how cryptocurrency exchanges really work. But we don't think you want to read all of this. We believe that you are very interested in understanding how the
best bitcoin exchanges work from a trading point of view - what opportunities they give you.
Due to the high level of volatility, cryptocurrency can be used as a speculative instrument, which will allow you to get the maximum profit. This method is similar to trading that takes place on conventional currency exchanges.
Analyzing the activities of the best cryptocurrency exchange, two areas can be distinguished - trading and exchange.
For example, you want to get cryptocurrencies at a favorable rate, and exchanges are just perfect for this. There are users who even keep their "hard-earned" resources on such resources, using them as a kind of wallet. However, hard-core experts do not advise doing this, since exchanges, although rarely, can be scammed or hacked.
Do you want to find the safest way to store cryptocurrency? Check our fresh article about
crypto wallets to choose the best wallet for your cryptocurrency!
Many people wonder:
Will I receive profit from holding my money in a simple online wallet?
Yes! The higher the rate is, the more money you will have - this process is the same as on exchanges but a safer one.
Today we could start talking about all sorts of things for programmers - about how cryptocurrency exchanges really work. But we don't think you want to read all of this. We believe that you are very interested in understanding how the
best bitcoin exchanges work from a trading point of view - what opportunities they give you.
Due to the high level of volatility, cryptocurrency can be used as a speculative instrument, which will allow you to get the maximum profit. This method is similar to trading that takes place on conventional currency exchanges.
Analyzing the activities of the best cryptocurrency exchange, two areas can be distinguished - trading and exchange.
For example, you want to get cryptocurrencies at a favorable rate, and exchanges are just perfect for this. There are users who even keep their "hard-earned" resources on such resources, using them as a kind of wallet. However, hard-core experts do not advise doing this, since exchanges, although rarely, can be scammed or hacked.
Do you want to find the safest way to store cryptocurrency? Check our fresh article about
crypto wallets to choose the best wallet for your cryptocurrency!
Many people wonder:
Will I receive profit from holding my money in a simple online wallet?
Yes! The higher the rate is, the more money you will have - this process is the same as on exchanges but a safer one.
For those who came here to trade, the best cryptocurrency exchange is an option. Now it is time to help you choose the right type of exchange.
Shall we start?
Centralized VS Decentralized Exchanges
Centralized Exchanges (CEX) and Decentralized Exchanges (DEX) represent the majority of the cryptocurrency exchanges available today. Both perform the same basic function: offering cryptocurrencies in exchange for fiat currencies like USD or EUR or another cryptocurrency.
What sets them apart, however, is how they perform this function.
As their name suggests, CEXs are run by a single entity that pretty much acts as an intermediary between the two parties. Centralized cryptocurrency exchange is an online platform that allows you to buy and sell cryptocurrencies. They are the most common option that investors use to buy and sell cryptocurrency assets.
In order for a cryptocurrency service to have the opportunity to become popular and to have a demand that will bring new users, it needs millions of people. Most of these millions do not have the necessary technical skills to manage DEX transactions, so using CEX is the only way for them to become part of the crypto community.
CEX is best compared to brokerage operations that keep and transfer funds between buyers and sellers. Most exchanges for beginners offer a simple, user-friendly design allowing anyone to trade Bitcoin and other cryptocurrencies effortlessly.
However, CEX has certain risks, and the main one is trust. If people lose confidence in the exchange, it will eventually collapse, which can lead to the loss of users' funds.
User data stored in a central location is vulnerable to attacks, as has happened countless times. As CEX grows, there may be problems with its infrastructure, as the increased volume of trade requires more bandwidth.
The characteristics of DEX are practically the opposite of CEX. Since these exchanges are independent of a central controlling entity, and since transactions take place directly between two users, the process is much safer.
DEXs also provide near-complete anonymity as DEXs do not require extensive KYC to protect their users. By their very nature, DEXs cannot be shut down by any government or agency, as they are not physically based in anyone's jurisdiction.
We still understand that some of the above-mentioned theoretical data can be hard for you to understand. That is why we are going to show you the differences between centralized and decentralized exchanges using short explanations.
Trading Volume
Centralized exchanges have a bigger trading volume that decentralized ones. According to the statistics, 99% of trades are made on centralized exchanges. Decentralized exchanges have a limited number of tools.
Liquidity
Here everything is good for centralized exchanges as well - they have higher liquidity.
Exchanges of Crypto and Fiat Currencies
Decentralized exchanges allow you to exchange crypto to crypto, but some centralized ones can exchange your crypto to fiat and the other way around.
Attacks
Here decentralized cryptocurrency exchange wins! The risks to be hacked for them are lower, but centralized ones have been through 30 attacks for the past nine years.
Government Influence
Decentralized exchanges are definitely for those who don't want to deal with the government, but centralized exchanges are banned in some countries because of governmental issues.
Privacy
Centralized exchanges ask users to provide bank details, addresses, etc, but decentralized ones have a very high level of privacy and anonymity, which is very important!
Functionality
We talked about it earlier. CEXs have a lot of different tools for margin trading, charts, data, and decentralized ones that have a limited offer of functions.
Regulations
Regulations are about centralized exchanges, DEXs don't deal with regulators and government.
Account Insurance
If you want your account to be safe, it is better to work with centralized exchanges, because the level of insurance there is higher - if something with your funds is wrong, you will have your money back. Decentralized exchanges can't offer the same.
Additional Features
And again, CEXs win! They provide different crypto wallets, cards, etc., and DEXs can't offer the same.
Transaction Periods
Here everything is equal - this period depends on which Bitcoin exchange you work with.
So, as you can see, it is challenging to make a choice.
To choose a Bitcoin exchange you need, you have to set your own goals and wishes.
How to Choose the Best Cryptocurrency Exchange?
Why is it so important to choose a good and secure cryptocurrency exchange?
If you still have this question, we will tell you a couple of reasons:
- Bad cryptocurrency exchange usually has a slow deals processing, which means you can lose money because cryptocurrencies are extremely volatile, and the rate can change in 5 seconds;
- Let’s be fair - all cryptocurrency exchanges are vulnerable to hack attacks, but legit services do everything possible to prevent it, and the bad ones can be the scammers themselves.
There are many more reasons but really guys, you don’t need them. It is as clear as day that you need to be very attentive while looking for a good Bitcoin exchange.
You will not go to a randomly chosen bank to put your money there, will you?
The same rule is for exchanges.
To make this process easier for you, we are going to highlight the most important facts you should pay attention to while choosing the best cryptocurrency exchange.
Interface
It is important to pay attention to the interface. It should be clear and user-friendly. If this is not the case, the user may, without understanding the toolkit of the Bitcoin trading platform, make a technical mistake that will lead to the loss of funds. This becomes most important during sharp jumps in the price of a cryptocurrency, when a trader must make quick decisions in order, for example, to sell a falling asset or buy it.
Cryptocurrency Pairs Number
When looking for a site, it is important to consider the number of trading pairs, as well as what cryptocurrencies are represented on it. On the one hand, the more digital assets, the more opportunities for trading and investing. On the other hand, sites can add tokens of little-known projects - this is one of the ways to make money. Accordingly, if a company lists dubious coins, it exposes the user to the risk of investing in a token issued by scammers.
Financial Instruments
In addition to the interface and the list of cryptocurrencies, you should study the tools that the exchange offers. For example, is it possible to place a stop order on the trading floor. This is an application that allows you to buy or sell a cryptocurrency if its price reaches a certain level.
Registration
Be sure to read the terms of registration on the exchange. They can contain a lot of critical information. For example, a company may not provide services to users in your country. Or trading on the exchange will be available only after passing verification (KYC). The same condition is often required for withdrawing funds.
Withdrawal Process
Be sure to check the conditions for withdrawing cryptocurrency. They may also indicate, for example, that you can withdraw funds only once a day, in a certain period, as it is arranged on the BitMEX. This can be a problem if you need money urgently.
Ways to Deposit & Withdraw
When choosing a site, you should study the methods of depositing and withdrawing funds. The more there are, the more convenient it will be to use the exchange. Also, the number of options for withdrawing and replenishing money can speak of the company's reputation. As a rule, popular payment systems do not work with marketplaces that are seen in illegal activity or have confirmed complaints from customers.
Trading Volume
The main part of the site's income is cryptocurrency exchange rates that are taken from traders for making deals. If there are few of them, firstly, this increases the risk of bankruptcy of the exchange, and secondly, it will be difficult for you to trade. Even if the declared rate is higher than on other sites, you simply cannot sell or buy currencies.
Exchange Experience & History
For example, you can search for information about whether it has been hacked or leaked user data. Even if the funds have not been stolen, this may happen in the future.
The Best Cryptocurrency exchanges in 2023
As sad as it may be, most users rarely carefully check the services with which they work. Fortunately, now there are so many articles in which you can find lists of the best services that have already been tested by time. We have tried and created for you a list of the best cryptocurrency exchanges that you can safely use in 2023 and in the future.
Binance - The Best Cryptocurrency Exchange for Newcomers
The Binance cryptocurrency exchange, headquartered in Hong Kong, has rapidly become one of the TOP platforms in terms of trading volume and popularity.
The exchange's interface is very user-friendly, intuitive, and relatively simple. There are 33 languages available: English, French, German, Russian, Portuguese, Ukrainian, Turkish, etc.
Binance provides the ability to trade altcoins paired with bitcoin and many other trading pairs (altcoin-altcoin). Currently, there are more than 400 trading pairs.
Users are provided with two trading interfaces: basic and advanced. The main one includes a list of quotes, a chart, order books, and a trading panel. The extended version of the interface has all of the above, plus a chart with TradingView, which contains the necessary tools for technical analysis.
Summing up all of the above, we can say that despite the very young age of the exchange, it has already succeeded and was able to gain leading positions in the cryptocurrency market and keep its brand.
Bitfinex - One of The Best Cryptocurrency Exchanges for Margin Trading
Bitfinex is a Hong Kong-based cryptocurrency exchange that offers exchange and margin trading for all top cryptocurrencies. The company takes security very seriously, so to top up your account in dollars, you need to enable two-factor identification.
The Bitcoin trading platform is interested in investors and traders from different countries. This is evidenced by a large number of language versions of the site. Bitfinex exchange interface has been translated into the following languages:
- Russian;
- English;
- Chinese, etc.
In order to fully use the exchange and freely replenish and withdraw money to USD or EUR on the Bitfinex exchange, it is advisable for the user to go through verification.
Bitfinex already had problems with hackers. This Bitcoin trading platform has been attacked more than once. Therefore, the company takes care of the safety of user accounts. To improve security, it is enough to use the recommendations of the Bitfinex exchange employees. Among them are:
- two-factor authentication;
- blocking the withdrawal of funds when entering from a new IP-address;
- encryption of mail;
- disabling the "open session" function;
- restriction of access in the "Sessions" section;
- a secret phrase to confirm the withdrawal of funds.
Using such functions will reduce the risk of account hacking to a minimum. Therefore, even if an attacker receives a password from an account, he will still not be able to transfer money to his account.
BitMEX - The Best Cryptocurrency Exchange for Margin Trading
With this cryptocurrency exchange, users get the opportunity to conduct margin trading with x100 leverage, which is several times higher than those offered by competitors.
The Bitcoin trading platform has a user-friendly interface with many features. Trading is possible for a number of pairs, but deposits and withdrawals are carried out exclusively in Bitcoins.
There are no issues with registration - enter your email, indicate the country of residence, and come up with a password. The name and surname, during the initial registration, are optional.
The site has a high level of security and, until now, has not been hacked by hackers.
Coinbase - The Best Cryptocurrency Exchange for PRO Traders
Coinbase is a popular American cryptocurrency exchange. Today, Coinbase deservedly ranks among the leading cryptocurrency exchanges, has a solid trading volume and high capitalization.
As of January 2023, 48 cryptocurrencies are traded on the exchange, the most active trading pair is ETH/USD.
Coinbase has long gone beyond the definition of an "exchange". The project is a full-fledged ecosystem that includes a number of services and tools for interacting with cryptocurrencies. In the course of the company's development, its specialists decided to create a separate Bitcoin trading platform for advanced users. A PRO version (known as Coinbase Pro) of the trading platform was created for them.
Kraken - Regulated Cryptocurrency Exchange
Kraken is one of the oldest and most popular cryptocurrency exchanges. Kraken ranks as the largest exchange in terms of euro volume, according to a study in June 2021. The crypto exchange was founded in 2011 by Jesse Powell. The platform was officially launched in 2013.
Kraken is a self-regulatory exchange, that is, it develops its own security policy and operating rules. However, it complies with the rules and regulations in many supported jurisdictions. It is registered as a Money Services Business Unit (MSB) with FinCEN in the US and FINTRAC in Canada.
The level of available instruments and limits depends on the level of user verification, of which there are 3: basic, standard and PRO. Having the first level, which is very easy to get, it becomes possible to carry out trading operations with tokens. However, work with fiat and futures remains unavailable. To do this, you will have to obtain the "standard" level and provide the cryptocurrency exchange with identity and residence documents.
Huobi - One of The Most Complex Cryptocurrency Exchanges
The Huobi cryptocurrency exchange was founded in Beijing and for almost 8 years of its existence has firmly established itself in the world TOP of platforms.
Huobi cryptocurrency exchange provides traders with the opportunity to work with over 200 cryptocurrency pairs, broken down into 3 main markets: BTC, ETH and USDT. The largest trading volume is in the Bitcoin market.
To secure your money, you need to use all the possibilities that the Bitcoin trading platform has. Moreover, the Huobi crypto exchange is distinguished by increased security.
Huobi's functionality allows you to:
- link your mobile phone to your profile;
- synchronize your account with email to increase the difficulty of access to it;
- use Google Authenticator, with which, if necessary, change security settings, passwords and perform secure transactions on the exchange.
In addition, the Bitcoin trading platform uses a specialized distributed system of protection against hacker attacks, and 98% of user funds are stored offline in “cold” multi-signature wallets.
OKEx - One of The Largest Asian Cryptocurrency Exchanges
OKEx is a cryptocurrency exchange that allows users to exchange, speculate, leverage, and trade cryptocurrency futures contracts.
For the user's safety, OKEx offers: two-factor authentication for entry, financial actions and changing security settings, SMS verification codes, an additional password for trading operations, notification and confirmation of actions via email.
OKEx provides an opportunity to trade on the spot market (instant transactions), margin trading in cryptocurrencies in a pair against USDT, as well as futures and swap contracts. In addition, the fiat / token exchange function has been implemented, but it only works with the Chinese yuan.
All possible types of order placement are available for trading. The chart is available in two forms: the first is the well-known TradingView chart, and the second is OKEx's own development.
Bittrex - The Cryptocurrency Exchange With No Past Hack Attacks
Bittrex is one of the most popular cryptocurrency exchanges. It stands out favorably against competitors such as Kraken or Bitfinex for the abundance of coins.
When it comes to secure storage of funds on an exchange, this cryptocurrency exchange recommends using two-factor authentication, which has already become the industry standard. We are not aware of any major hacker attacks on Bittrex.
However, over the entire history of the exchange, several messages have appeared on the network, the authors of which claim that their accounts on the exchange have been hacked. It is difficult to say what their share of fault was in what happened, since, as you know, users often use weak passwords or do not use two-factor authentication. Either way, Bittrex looks like a more secure marketplace than many of its competitors.
Thus, Bittrex is one of the largest cryptocurrency exchanges. Its main feature and competitive advantage is the large number of cryptocurrencies available for trading - more than 190 today. However, it should be noted that the company does not accept deposits in fiat, which can be a limitation for inexperienced users. The web interface will attract even sophisticated traders. Plus, Bittrex is the go-to choice for those looking to trade rare coins.
KuCoin - One of The Most Newcomer-Friendly Cryptocurrency Exchanges
KuCoin is a Hong Kong-based cryptocurrency exchange launched in September 2017. Despite the fact that the KuCoin cryptocurrency exchange was created quite recently - in the fall of 2017, it has already established itself as one of the most reliable trading platforms in the world of cryptocurrencies and blockchain.
The platform has all the advantages of a decentralized system: reliability, security, speed of transactions (because of the powerful engine, the exchange has no problems with scalability) and other advantages.
The KuCoin exchange offers to protect your account in four ways: password, two-factor authentication from Google, Security Questions, Anti-phishing security phrase.
The trading interface is very simple and straightforward, it is not for nothing that the exchange calls itself "popular". Every trader, from beginner to professional, can work with it. To go to the terminal itself, you must first select a trading pair from a large list, at the moment there are more than 400 of them.
Bitstamp - The Most Minimalistic Cryptocurrency Exchange
Bitstamp is a Luxembourg-based cryptocurrency exchange that was launched back in 2011 by Nach Codrichei and Damian Merlak.
When it comes to choosing digital assets, Bitstamp is one of the most “minimalist” exchanges on the market as it only supports ten cryptocurrencies. On the other hand, among them are the largest crypto assets by market cap - Bitcoin, Ether, Litecoin, XRP, and Bitcoin Cash.
Over the years, Bitstamp has managed to become one of the most reputable exchanges in the industry - in 2016, the cryptocurrency exchange became the first cryptocurrency platform to receive a license from a payment institution in Luxembourg, which allowed it to legally conduct business in all EU member states.
How To Avoid Scam Cryptocurrency Exchange?
Unfortunately, cases of dishonest cryptocurrency exchanges that cause people to lose millions are very common. They all use different schemes: some create an exchange, promote it, and then steal money from users; some create phishing sites for popular exchanges, confusing people, and s.o.
Before we give you some cool tips on how to avoid cheating and scamming, let's take a look at what schemes hackers use most often.
Phishing
The essence of phishing is gaining access to confidential user data through fake websites. The classic phishing model is to create a fake copy of the site of the same cryptocurrency exchange with an address very similar to the original.
for example, instead of binance.com - binance.net. Trying to log in to such a twin site, the victim essentially gives the hackers his username and password.
Mobile Applications
In 2019, experts from one software development company analyzed a fake application of one of the cryptocurrency exchanges, and discovered a vulnerability that allows hackers to gain access to users' 2FA codes.
Software
Often, hackers use updates to disguise themselves to download malware. This could be a browser update, for example. When the user confirms the update, a Trojan program is downloaded to his computer. In the future, such a program can change the address and amount when sending money: the user copies one address, and another is inserted.
These are far from all the ways hackers use, but these three are considered the most popular. Fortunately, there are several ways to prevent such possible situations.
Two-Factor Authentication (2FA)
Today, this is a basic mandatory element of protecting your funds even on the best cryptocurrency exchange account. In 99.9% of cases, scammers do not even try to hack accounts protected by two-factor authentication. Hacking 2FA is quite resource-intensive, and attackers need to be sure that it makes sense to put in extra effort.
Connecting IP to The User's Account
On many exchanges, you can enable authorization only from trusted IP addresses in the settings. Thus, scammers cannot log into your account, even having received your data.
Please note that before using this setting, you must ensure that your ISP provides a static and not a dynamic IP address. Otherwise, you may lose access to your cryptocurrency exchange account.
Email Notifications for Withdrawals
Another precautionary measure is additional confirmation of the withdrawal operation via email linked to your account on the cryptocurrency exchange.
Blocking the Withdrawal of Funds After Changing the Authorization Data
It is a mandatory item: in case of a hacked account, the user is given time to send a message to the technical support service.
Authorization and Passwords
To register on the best cryptocurrency exchange, use a separate email and phone number, which only you know about and which you do not use for other purposes. Provide real data, otherwise in case of problems it will be difficult for you to prove your case and you risk losing access to your account. Some useful information about password security:
- create unique passwords for each site;
- use only complex passwords;
- do not share your password with anyone;
- be sure to enable two-factor authentication;
- to increase the reliability of 2FA, put a password not only on the phone, but also on the SIM card itself;
- get into the habit of checking the site address before entering your password on it;
- if you store passwords in electronic form, use encoding;
- if you write passwords on paper, do not leave it in a visible place.
Financial Operations
Do not use shared Internet access points for financial transactions, such as Wi-Fi in a cafe. If there is a need and you have to use public networks, then it makes sense to make your own VPN server.
Publicity
Try to maintain maximum confidentiality about yourself, because most often cybercriminals use data about a potential victim from open access. Do not discuss your financial situation, including the ownership of cryptocurrencies - even a small amount in cryptocurrency today, due to volatility, can become attractive to scammers.
You shouldn't dwell on which cryptocurrency exchange you hold your cryptocurrency on, especially on social media.
How To Trade On Cryptocurrency Exchange With Profit?
We know many cases when traders have all the services they need to trade - they even use
cryptocurrency trading signals, but they still have some troubles in dealing with the exchange. That is why we would like to present you a set of very important rules you need to follow while trading, so your mistakes can be avoided in the future
- Determine what type of trader you are.
Think carefully and decide which style suits you best. Many people immediately imagine the intraday traders from Hollywood films, turning in millions. But to be honest, day trading comes with a lot of stress. You can quickly lose money if you are not responsible for your actions (especially if the trader does not know what he is doing).
So, there are three types of traders:
- Short-term (day traders; work intraday);
- Mid-term (swing traders; take a position for 2-7 days, sometimes longer if the trend requires it);
- Long-term (investors; buy on drawdowns, hold the position for a long time).
All three types make money in the market, but use different strategies. You can choose one style of trading or can use all of them - depends on your potential and experience.
- Greed is the main enemy of any trade.
You should never wait for additional growth or fall, if the forecast does not convincingly speak about it, it is better to play it safe and stop on time or enter on existing conditions, without waiting for the ideal option.
- Patience is a pledge of profits.
This applies to both tracking open positions and waiting to receive more convincing signals for entry. This simple thesis will allow you to understand how to trade cryptocurrency, avoiding unnecessary impulsive entries and exits in anticipation of a strong movement.
- Volume and capitalization for the markets are key factors that reflect the mood of other players.
Therefore, only knowing these characteristics, you can clearly predict the behavior of quotes.
- Be confident.
The main thing in cryptocurrency trading is always to be aware of the risks, make informed decisions, diversify your crypto portfolio and be prepared for a complete loss of funds. In this case, the chances of making money in this business increase several times.
- Analyze world news.
Another factor that affects the entire cryptocurrency rate is various cryptocurrency news and hidden signals. One positive cryptocurrency news can make the rate of a particular coin increase several times. While negative news can provoke a fall in the entire digital currency market for a long time.
- Don't try to find the perfect time to start trading.
Use the current forecasts and start buying the currency even before the start of growth, in case of short-term or long-term fall, so as not to fall for the tricks of market manipulators. Remember, the course can be artificially changed by large players, so the opinion of the crowd is not always correct, or rather wrong in most cases.
- Don't risk all your capital.
As a general rule, one transaction should be no more than 3-5% of your total assets. This principle minimizes the risk of losing all funds at once, since even several losing trades in a row can be covered by one profitable one.
- Remember that market psychology is incredibly powerful.
Fear, uncertainty, doubt, and the fear of missing out are extremely powerful emotions, so even the most reliable pattern may not work. Be sure to manage your risk and use stop losses.
- Remember - altcoins are not Bitcoin.
Decide on your goal: is it to buy more Bitcoins, or invest in a certain coin? Keep this in mind when building your portfolio. If the goal is to gain a position on bitcoin, do not get attached to other cryptocurrencies. Bitcoin is the king of the cryptocurrency market. Always keep it under control. It can destroy any alternative currency very quickly if overlooked.
Final Thoughts
Cryptocurrency exchange is the main service you need to start cryptocurrency trading. Besides, it is very important to spend enough time on learning the main terms and tools, strategies, etc.
The most important advice we can give is not to be in a hurry. Many newcomers enter the market and want to earn like here and now - you should accept it is impossible. People think cryptocurrency is very easy but this is absolutely vice versa - to get profits, you need to study and then trade step by step, starting from a couple of crypto pairs, and later expand and use leverage or try other strategies like arbitrage or scalping.
Of course, all of the ways of trading will be successful only in case you work on a good exchange. For this purpose, we listed the best crypto exchanges with all the important information above. You need to check every service and choose the best that suits your needs and wishes.
Besides, we decided to give you some trading tips that will be 100% important and valuable when you start your trading path.
See you later, trader :)