So you have heard about cryptocurrencies, especially after the unbelievable market growth it caused worldwide in the last few years and was in news all the time. Whatever the coin may be, the first thing everyone wants is to get knowledge about cryptocurrency and to own it. This trading is done on platform ‘cryptocurrency exchanges’.
Now, choosing a cryptocurrency exchange to purchase can be a formidable and difficult process. Ultimately, there are more than 200 cryptocurrency exchanges today, with 24-hour trade volume in the billions.
And probably the most important tip before you start. Don’t trade with money that you can’t afford to lose! Really. Beginners do a lot of stupid things, like an investment of the whole savings. And the stupidest one is borrowing the money from family and friends and invest that into the bitcoin, litecoin, ripple etc. So please, always think the option that you could lose everything if you don’t know what are you doing.
If you are looking to trade in digital currencies then you should know about top crypto exchanges, list of cryptocurrencies and crypto exchange rates.
1.)What Is A Cryptocurrency Exchange?
A cryptocurrency exchange is a platform that offers users to trade cryptocurrencies or digital currencies for other cryptocurrencies or traditional money.
Currently. the most popular exchanges are Binance and Coinbase. Although most crypto exchanges offer users to trade only digital assets for digital assets, there are few exchanges which off trading of fiat currencies like U.S. Dollars for cryptocurrencies
2.) Different Types of Exchanges
Fiat – Crypto Exchanges
These exchanges allow you to buy a cryptocurrency directly using your fiat currency (a government-issued currency like US dollar or Pound). These are most popular with new users who are yet to explore the crypto market because it offers easy access to the cryptocurrency of their choice without much difficulty.
The issue with these exchanges is that they have little support and they offer less number of choice of coins. It is used as just an entry point by beginners.
Crypto – Crypto Exchanges
These exchanges allow you to trade a cryptocurrency for another cryptocurrency. It means first you need to buy a cryptocurrency on a fiat–crypto exchange and then transfer it to the wallet of the crypto – crypto exchange and then trade for the coin which you want to buy in the first place.
This is done by experienced traders who are actively trading between coins to profit quickly or want to buy smaller less known coins.
In these exchanges, a buyer is matched with a seller and they exchange currency at their own agreements. Like one of the exchange Localbitcoins, where they match a buyer with a number of sellers, where the buyer has the option to choose the best price of the selection.
Also, they normally offer an escrow service( a financial arrangement where the third party holds and regulates the payment of the funds for two parties involved in a given transaction ) so that there is reduced risk for both buyer and seller.
In these exchanges you can buy cryptocurrencies from brokers directly. The brokers set their own prices which could be higher or lower than market price. Here you need to be careful before trading with the
3.) Finding The Best Crypto Exchange
Now you know the different type of exchanges and you have made decision to get into the crypto world,
So it is very much important to find the best exchange to make the most out of this business. Before you start trading , there are some criteria you must check on these platforms to identify the most suitable for you. Let’s go through the most important ones.
Read about exchange reviews online(coinpedia). Check whether they have been ever hacked or have issues transferring the users money. Check if they have suitable trading tools and if other experienced traders trust them. You can also go through independent users comments on sites such as Reddit and BitcoinTalk.
There are different exchange rates for different exchange platforms. This is the conversion rates for fiat currencies. Find those that have reasonable rates to save some money. You can find these fees on the sites’ platforms or from other users’ reviews.
Some exchanges work only in specific regions or countries. Check if the platform is available to use in your country. You need to choose one that is supported in your country to avoid issues with depositing and withdrawing funds, especially if you plan to use wire transfer.
Check for any limitations on trading. There are some platforms which limit the amount you can trade until you complete the verification process. Then there are few exchanges that allows trade whether or not you have verified your account. Check also the ease and user interface. The highly liquid exchanges are some of the best crypto exchange platforms as many digital coins are available.You can check this info on the exchanges official websites.
Most exchanges will ask you to provide identity(Govt issued ID) to exchange crypto on their site. This require you to upload your identity card and location details. For some you to need take photos of yourself holding your identity card. This verification is very important to prevent fraud. It is a way the exchange platforms to protect themselves from fraudulent traders whose aim is to deceit others. Also, the verification protects traders as you only get to interact with verified individuals. It reduces the chances of getting conned.
Check the fees in the exchange. Ensure you carry out a required search on these as some exchanges have hidden fees. You must identify their deposit, trading and withdrawal fees. Keep an eye as there are some platforms that have unbelievable low fees such sites could be operated by conman just to lure you and get your money. On all the exchange official websites Information about fees is freely available.
Different exchanges support different payment methods. Some exchanges support debit and credit card transactions, bank wire transfer, PayPal, and others. Check the various options available in the exchange and their fees so you can choose from them. The more the payment options, it will be easy for you to choose.
It is very important to have quick and helpful customer support. An exchange that has especially a chat that is available for 24/7 is the best since you can ask anything regarding your transactions at any time. Using emails can be helpful only if they are responded to on time.
4.) Basic Functions of Exchange
Basically, a crypto exchange consists of following functions: Register/Login, Exchange market, Deposit and withdrawal, News and announcement section and support.
First you need to register yourself with valid email id.
If you want to sell Bitcoins online, you first need to deposit your funds in the particular exchange you wish to sell.
1) Go to the deposit page-> click on deposit beside the coin you wish to deposit.
2.) Next, click ‘Generate address’ and copy the address.
3.) Go to your personal wallet -> then input this address as withdrawal address on your wallet. Remember every coin has different address, if you deposit a coin to other coin’s address, you will lose all your funds.
After the transaction, go to the exchange site and check the amount you deposited.
If you are selling Bitcoins online, you need to face the problem of withdrawing funds. The most common way is international wire transfer and top exchanges support this method. Recently, some exchanges have started to accept credit and debit card withdrawals.
Also, money can be transferred via SEPA(Single European Payments Area). It is a system designed to make international transfers easy between members of the European Union.
However, both of these systems have some glitches. Usually, depending on the country transfers take a very long time and also the amount of money being transferred, it can go up to four days to be processed. Moreover, both these systems attract additional charges.
1) Go to the withdrawal page-> click on withdrawal beside the coin you wish to withdraw.
2.) Next, enter address of the wallet where you wish to withdraw and quantity.
3.) After the transaction to your wallet -> check whether the coins are withdrawn or not.
Check bank charges before withdrawing. So, if you’re opening a bank account specifically for withdrawing money made on Bitcoin sales, you need to do your research and chose the bank that best suits your needs.
Market Page –
There is market/exchange page in every exchange platform to buy/sell your currencies.
simple price chart
The most basic type of price chart in market page displays prices as a line:
Prices of a given period of time ( like month, week, day or hour) are used to draw the
Expert Choice: The Candlestick Chart
The most preferred chart among traders is the candlestick price chart.
Candlestick chart displays more data than the simple chart: each ‘candle’ displays the opening price, the lowest and highest price from a given time-period as well as the closing price.
The candlestick chart is part of OHLC (open high, low close) price charts.
Another type is the non-time based (NTB) range chart. Beginners may find them less helpful and more difficult to understand.
Candlestick price charts provides a lot of useful information for the consistent trader’s, such as whether a candle’s spread is wide or narrow (showing the difference between high and low prices), where the closing price is relative to the high and low etc.
Along with the patterns that groups of candlesticks form, this is where traders find out the trend : either prices rising or prices falling or ranging sideways.
RSI (Relative Strength Index)
Determines the strength and speed of a market’s price movement by comparing the current price of a cryptocurrency to its past performance.
The RSI lies between 0 to 100. When RSI approach 70 it is said cryptocurrency to be overbought. This suggests that the cryptocurrency is getting overvalued and may experience a fall. Also, if the RSI reaches 30, this indicates the cryptocurrency may be oversold and is undervalued. This indicates that the cryptocurrency may go
The MACD(Moving Average Convergence/Divergence )
Indicator is made up of two exponential moving averages that help measure momentum in a cryptocurrency by using the difference between short-term and long-term price trends to predict future trends.
One thing you should look for when using the MACD indicator is crossovers. When the MACD crosses above the signal line, this indicates to be a positive signal to buy the cryptocurrency.Also, when the MACD crosses below the signal line, this indicates to be a downbeat signal to sell the cryptocurrency.
An order book is the record of buy and sell orders that have been placed at a particular price for a cryptocurrency.
A sell stop loss is placed on top that executes a sell order when the cryptocurrency reaches a certain price. Sell stop losses are kept below the buy-in price and are an effective tool in reducing risk. In such a unpredictable market like cryptocurrencies, a sell stop loss is important because it is made to limit your potential loss on an investment. On contrary, buy stop losses allow you to gain profits if your cryptocurrency were ever reach a certain price above your buy-in price. They are incredibly useful for capturing gains in times of tense situations.
5.) How To Trade Cryptocurrency?
Now that you are familiar with the cryptocurrency keyword and want to invest, you need to find out the best exchange available to get the most out of the investment.
First, check cryptocurrency exchange rates, study about the exchange security as what it offers for business protection. Then check out its review from different sites, the exchange you wish to invest and then proceed further. Once you have found the exchange you wish to invest .
Go to the official exchange site you wish to trade. Register yourself with all the details. Then after a successful login, every exchange platform asks for verification before you start trading. Provide all the documents, sometimes you need to take a photo of yourself by holding government ID.
After all the verification, before you trade, you need to have balance in your wallet
(for wallet information: read our wallet guide). Go to deposit page, choose the currency you wish to deposit from the list of cryptocurrencies available on the platform. Click ‘generate’ to get the address, and deposit the respective coin to the address.
Go to the market page ->check for the pairs you wish to trade, If you are trading crypto to crypto or fiat to crypto then choose the pairs, enter the quantity and submit.
For withdrawal, Go to the withdrawal page-> click the coin you wish to withdraw, then enter the correct address, enter the quantity and submit. (we recommend you to transfer funds to your personal wallet for safety purposes).
6.) How To Exchange Cryptocurrency For USD?
First check which platform allows to trade crypto to fiat. To exchange coin, for example; Bitcoin to USD, you need to have balance in your wallet. Go to deposit page, choose the currency you wish to deposit from the list of cryptocurrencies available on the platform. Click ‘generate’ to get the address, and deposit the respective coin to the address.
Go to the market page ->check for the pairs with BTC/USD you wish to trade, enter the quantity and submit.
For withdrawal of USD, Go to the withdrawal page-> click on the USD, then enter the correct address, enter the quantity and submit.
To trade and know more about crypto exchange reviews , go to coinpedia -> exchange section.