What You Need to Know About Trading Cryptocurrencies

May 15, 2020

Many crypto exchanges and new coins trade and operate in unregulated environments, which offer few protections or remedies for the consumer if something goes wrong. Therefore, it is critical to choose a crypto trading firm that operates in a regulated environment, with a strong financial position, and a trusted brand.

In order to trade cryptocurrency, you do not have to buy into all the hype that crypto is the answer to the world’s problems or that it will protect you from a monetary system collapse. Cryptocurrency, like any financial instrument, may be a suitable way to diversify your trading and take advantage of short-term or long-term trading price opportunities.

Experienced crypto traders always have a plan before entering a trade. This plan includes how much of a coin or coins to buy or sell, how much risk they are willing to take or how much money they are willing to lose on a single trade.

Understanding the cryptocurrency you are looking to trade is key. What is the basis for the coin? What is the market cap? Has there recently been good or bad news, is any news expected? Always do a Google search and learn as much as you can before hitting that buy or sell button.

Finally, some cryptocurrencies (currently Bitcoin only) can also be traded in the futures markets on the Chicago Mercantile Exchange (CME). With Bitcoin futures you can trade both long and short, which may offer opportunities to hedge your position or speculate short.

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