Trading

[caption id="attachment_6712" align="alignnone" width="1024"] Trading cryptocurrency has become easier than ever with more platforms where this can be done easily. For example, you can start trading in minutes with this exchange .[/caption]

If there is one thing that has really caught people’s attention, it is cryptocurrency . This is a very popular means of payment, at the same time as it is so much more than just a means of payment.

For many, cryptocurrency is also a form of investment . In many cases, it can also be a good investment, especially if you are lucky and invest when the exchange rate for the relevant cryptocurrency is in a good period.

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In connection with cryptocurrency, it is not uncommon to come across various other concepts. One of these concepts is trading.

In this article, we will take a closer look at cryptocurrency trading. We will go into more detail on this.
What is cryptocurrency?
Before we go into more detail on cryptocurrency trading, we first have to answer the following questions: What is cryptocurrency?

As mentioned above, cryptocurrency is a means of payment. But it’s not just a means of payment – it’s a digital means of payment. In other words, it is something other than the physical means of payment that we are used to carrying with us in a wallet or the like.

But in the same way as the physical means of payment, cryptocurrency is also stored in a wallet. But this is a wallet designed specifically for storing cryptocurrency. These wallets are called cryptocurrency wallets.

There are different types of cryptocurrency wallets, and this is of course something we recognize from when it comes to the physical means of payment. These means of payment can also be stored in different wallets, but the differences are about something else.
What is trading?
However, there are very few people who only acquire cryptocurrency to have it hidden away in one or another cryptocurrency wallet. Many people get this as a kind of investment. This can also be called trading.

It also leads to what is perhaps the most important issue in this article, and it is as follows: What is trading? What exactly is in this concept?

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In short, trading is about keeping an eye on how the price of the relevant cryptocurrency develops using a platform that has been developed for this. This platform is often called a trading platform.

It is possible to trade cryptocurrencies in several different ways, but this is something we will take a closer look at a little further down in this article.
Different ways to trade cryptocurrency
As mentioned, cryptocurrency trading can be done in several different ways. In fact, this form of trading can be divided into two main groups:

Purchase and / or sale of cryptocurrency using a cryptocurrency exchange.
Investment made with money borrowed ( also called CFD ).

Below we will take a closer look at these two main groups of cryptocurrency trading.
Buying / selling cryptocurrency through a cryptocurrency exchange
When you trade cryptocurrency through a cryptocurrency exchange, the current amount of your cryptocurrency becomes part and ownership. The coins become part of your inventory, which you keep safely in some form of cryptocurrency wallet.

To be able to buy cryptocurrency, you have to create a user account on the relevant cryptocurrency exchange. A trading platform works in exactly the same way. To be able to use it, you must register as a user with the relevant trading platform.

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To trade cryptocurrency through a trading platform, you have to open a position in your stock. This simply means that you have to store the cryptocurrencies in your cryptocurrency wallet, and keep them there until it becomes relevant to sell them from you.

Before you decide to use this method, you should check that the platform allows you to store as much cryptocurrency as you want to store there. Another thing you should check out is whether or not the platform charges you fees.
Investment made with money you have borrowed
Using a cryptocurrency exchange and trading platform is not the only way to trade cryptocurrency. You can also trade cryptocurrencies with money that is not necessarily yours.

In practice, this simply means that you borrow money from an actor. This is also called CDF, which stands for Contract for Difference. It allows you to invest in cryptocurrency, even if you can not really afford it.

This is a form of trading that requires you to make a small deposit. Many people think that this is something that means that you get less exposure in the market, but this is not the case at all. In addition, the CDFs are geared, which means that it can go both ways.

If you invest in cryptocurrency with the help of money from a CDF, then you definitely have the potential to make good money on the investment. But there is also a real possibility that you will lose out. Trading thus works in the same way as cryptocurrency in general.

[caption id="attachment_6715" align="alignnone" width="683"] CFD – Contract for Difference – is a popular instrument when we talk about cryptocurrency investments, but familiarize yourself well with the risk this entails before investing your savings.[/caption] Risk factors when trading
Regardless of how well-established cryptocurrency has gained ground in society in recent years, it is important not to forget that it is a very risky activity.

In connection with investing in cryptocurrency, it is not uncommon to hear that you have your tongue straight in your mouth. And while important, it does not diminish the risk involved in investing in cryptocurrencies. In fact, there is nothing you can do that will actually minimize the risk.

The only thing you can do about it is to be aware of the risk factors when trading. Because even if there is nothing you can really do, it is important to tread carefully.

Below we will take a look at some of the risk factors when trading cryptocurrency.
The volatility of cryptocurrency
Many cryptocurrencies are known for their high volatility. This is something that separates investing in cryptocurrency from other investments.

Most people invest in something to secure some kind of gain, but that’s not how cryptocurrency works at all. If you invest in cryptocurrency, there is no guarantee that the investment will end in profit for you.

Of course, it depends a bit on which cryptocurrency you choose. This is because some cryptocurrencies are known to be a little more stable than others, so you should choose, for example, Stablecoin in favor of Bitcoin. The former has a slightly more stable curve.

Volatility is not an issue that you have to address in connection with, for example, keeping money in a traditional bank.
Less security
It is not just the cryptocurrency volatility that makes cryptocurrency stand out from the traditional payment methods. Another important difference is how the different actors are structured.

While a traditional bank has the role of a third party in any transaction, this is not exactly how cryptocurrency works. Cryptocurrency is decentralized , which means that it does not include a third party or the like at all.

The only ones involved in these transactions are only the one who pays and the one who receives the money. And it is not a matter of course that the parties know who the other is either.

It may sound a bit practical, and it probably is in some cases. But it’s not just positive things with just this. The fact that a third party such as the bank has nothing to do with the transaction means that there is less security around the whole thing. And that’s not good.
Examine what the cryptocurrency is made up of
If you are considering starting with trading or cryptocurrency in general, it is important that you research what the cryptocurrency is made up of before you decide to jump in and start investing.

Very many cryptocurrencies are built up of blockchain technology, but it is important to investigate whether the starting point for the cryptocurrency in question is in fact genuine. This is particularly relevant in connection with cryptocurrencies that have not yet become so well known.

Most people who develop cryptocurrencies are based on an open source code when they develop their product. In practice, this means that it is possible to falsify it, so that it does not lead to anything other than problems for you. That is why it is important to be extra careful.

By being extra careful, we naturally mean that you should always familiarize yourself properly with a cryptocurrency before you decide to invest in it.
Laws and regulations
Another risk factor when trading cryptocurrencies is laws and regulations. Not all countries are as positive about cryptocurrency as we are in Great Britain . In fact, there are countries that have actually banned cryptocurrency.

If this is the case in a country where you are staying, then it is not certain that trading cryptocurrency is a very good idea. First and foremost, cryptocurrency trading will have very low value in countries where that is the case, but you may also get into trouble with the authorities in that country.

How strict these laws and regulations are will vary from country to country. Some have rules against only parts of the crypto market such as trading or mining, such as China which has banned mining. But there are also some countries that do not allow cryptocurrency at all.
Cryptocurrency is very new
Despite the fact that cryptocurrency has apparently gained a fairly good foothold in this country, this is not the case all over the world. In many other countries, cryptocurrency is still seen as a very new concept.

Cryptocurrency is a complex concept. For example, not all countries accept it as a means of payment, and some countries are skeptical of what cryptocurrencies are generally made of. And it is important to have an understanding of that.
The rule of thumb of trading
But even if there are countries that are not as positive about cryptocurrency and trading yet, it does not mean that you should not do it – if you really want to do it.

It is important to remember that in this country, cryptocurrency is both accepted and quite popular among most people.

The most important thing, however, is how you act in connection with it. Feel free to try your hand at investing in cryptocurrencies, but there is one thing in particular that is important to keep in mind. And that is that you should never invest more than you can afford to lose.

It is easy to get carried away, especially if you experience cryptocurrency as a good investment – if you invest in a good period. But the fact that you should not invest more than you can afford to lose , you should have as a rule of thumb, because it is very important.
How to trade cryptocurrency
Trading cryptocurrency is a process that consists of several steps. Below we will take a look at how to do this.

Which steps are most relevant to you, of course, depends on how much experience you have with trading cryptocurrency. However, these tips have been prepared on the basis of someone who has not had the opportunity to gain a lot of experience in the field yet.

[etoro] Read up on the topic
Before you start trading cryptocurrency, it is important that you read up on the topic.

We really cannot stress enough how important this actually is. Reading up on the topic is the most important thing you do in connection with this. Because if you do not have proper control over the subject, then the probability that you end up losing money is greater than anything else.
Get to grips with it
Even when you think you have read everything that is possible to read about the topic, it may pay to read a little more. It is much better to read an article too much than an article too little!

When it comes to this, researching and comparing different trading strategies will be a good tip.
Important to try
After you have really got into it, you can start trying it out.

Here it will be a good idea to trade popular cryptocurrencies. The reason for this is that there is a lot of good information about this, and you can use it to your advantage.

Wait until you feel that you have gained control of the trading of the popular cryptocurrencies before attempting to trade lesser known cryptocurrencies.