Trading in cryptocurrencies is a good opportunity to make money from changes in the value of the asset. The volatility of virtual coins remains quite high, the fluctuation of the rate in a day can be several percent, which means that due to this you can get a good profit.
Cryptocurrencies are traded 24/7 without interruption due to their decentralization. It is possible to trade both on the rise and fall of the asset. At the moment there is a growth of major cryptocurrencies with short pullbacks, so one of the reliable strategies is to buy from the support area and sell after updating the maximum from the round value values. To trade cryptocurrencies, you can apply some strategies and teсh analysis, which is used in forex.
What crypto exchanges for trading
Cryptocurrency exchanges are classified according to several criteria.
By the principle of operation:
- Centralized. This implies creating an account, storing all information about clients, their balances, and open positions on servers. Subject to hacker attacks, as well as censorship by the government. A centralized exchange is a standard business with a registration authority and a physical office location.
- Decentralized. Powered by blockchain. Free from censorship, there is no risk of account hacking and funds theft. The disadvantage is that illegal transactions can indeed be conducted through such exchanges. Also, while decentralized exchanges are less popular, trading volumes on them are small, which causes all sorts of problems, such as a lack of coins to create a large order.
Degree of regulation:
- Regulated. They are used mainly by institutional investors who care about impeccable compliance with the rule of law in all their activities. These exchanges are accredited by the government, all transactions on them are monitored, and each user must confirm his or her identity or the information about the company he or she represents.
- Unregulated. They are used by small and medium traders. Because there are many more of them, the overall liquidity and trading volumes on such platforms are higher than on regulated ones. This option is suitable for those who are inclined to keep their cryptocurrency activities anonymous, do not want to verify their identity, or are afraid of questions from the government.
On Fiat support:
- With fiat money gateway. Fiat money is the national currencies (dollar, ruble, etc.). Some sites connect the ability to deposit and deposit funds via payment systems, including Visa/MasterCard. For many users it is a decisive criterion, providing the convenience of work.
- Without a fiat gateway. To deposit or withdraw funds from such an exchange, you have to use the third link. For example, to exchange fiat to cryptocurrency through an exchanger, and then make a deposit.
In terms of trading opportunities:
- Margin Trading. Lending or "trading on credit" will be described in more detail below. In brief, it is the provision of additional funds by the exchange for trading, which you will then have to pay back with interest.
- Spot. Only half of the exchanges support margin trading, the rest do not introduce such a function, being limited to usual spot trading, implying instant settlement between market participants. The main reason for that is the close attention of the American SEC. Leveraged trading significantly increases the risks, and the crypto market is already high risk due to volatility.
By volume:
- Liquidity. Liquidity is the ability to sell an asset quickly at the best value. Liquid exchanges are characterized by a large number of users, a lot of orders created every second, and therefore trading on them is done in seconds. The asset itself also matters, popular cryptocurrencies are always more liquid than rare ones.
- Illiquid. Some exchanges offer a limited selection of currency pairs, among which some are hardly in demand. From time to time exchanges conduct purges of such pairs, for example, in 2018 OKEx removed 42 trading pairs with minimal liquidity.
By degree of disclosure:
- Without verification. There are almost no platforms that allow you to use the full functionality without verification (i.e. documenting your identity) at all. These are decentralized platforms, as well as the centralized ones. Their trading conditions are quite favorable.
- KYC and AML. These are regulations designed for customer safety and used in both traditional financial systems and cryptocurrency systems, although it contradicts the blockchain's inherent anonymity system. Exchanges have to make concessions on regulatory requirements.
- Verification as required. Most sites allow you to trade without verification, just confirm via email or SMS. But those who want to take advantage of advanced functionality, such as increased withdrawal limits, still need to verify. This is the most
How to choose the right exchange for crypto trading
- There are several main criteria for choosing a crypto exchange.
- First, you have to make sure that the developers are not neglecting security. Sometimes the terms of trade seem very favorable, but this is due to the fact that the management decided to save on security methods. Low commissions are good, but they will not help if the exchange is hacked and funds are lost.
- Second, it is important to follow the news. If there is information about a major hacker attack or comments about problems with transactions, you should try to quickly withdraw funds from the exchange, before it is too late.
- Third, you must pay attention to the reputation of the project. Large exchanges working for many years are less likely to encounter fraud. If you still want to try your luck on a little-known cryptocurrency exchange, it is worth carefully studying the reviews.
- Fourth, you need to decide for what purposes you need the platform, that is, what and how often you will trade. This determines the cost of commissions (both trading and withdrawal).
- Finally, it is important to pay attention to the jurisdiction of the project (in which country it is registered). Different countries have different attitudes to cryptocurrencies and use their own regulatory measures.
In this regard, I suggest looking at Digitex - it is the world's first futures exchange with zero fees, announced the launch of a new spot market. Traders can now buy and sell cryptocurrency instantly without commission, the platform has many killer features such as the ability to send crypto instantly with zero fees via email, you can learn more about other features from the blog.
Digitex released a beta version of its futures trading platform in November 2019 and then launched Mainnet in July 2020. Since 2019, the Digitex platform has been experienced by thousands of users. The exchange can process more than 22 billion trades in 24 hours: it meets the high standards of the crypto industry with high volatility.
