The growth in popularity of cryptocurrency is leading to various benefits as to what people could make the most out of in their trades. Despite the skepticism and fears of people involving themselves in cryptocurrency, it has steadily gained the attention of many traders around the world. Also, the crypto market may be volatile, but the pace of stabilization for the value of the digital coins is steady, which means more and more people are putting their interest in the digital infrastructure.
Learning the basics of trading will take you a lot of time, even if you researched the concepts of how to set particular metrics for your strategies. Even crypto enthusiasts who have been trading digital coins for quite some time can’t say they’ve mastered the arts of crypto trading. Regardless, you can put your experience and honed skills to practice through crypto trading platforms. Thus, here is a definitive guide as to what you should be looking for in a cryptocurrency trading platform.
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What is a Crypto Trading Platform?
Crypto trading platforms are services that facilitate exchanges of digital coins, specifically buying and selling. For instance, buying your first cryptocurrency using fiat money, generally known as the regular currency, or converting your Bitcoin for Ethereum due to your interest in a decentralized network.
Beginners who have little to no experience with crypto trading should also take note that all activities involving their digital coins within the trading platform will always be based on their market value.
There is no perfect platform for trading cryptocurrency, but you should set a standard for yourself to help you pick which service you would be using that could help you achieve your goal. Every crypto trading platform works differently. The quality of the features and the range of digital assets you could choose to buy and sell can be limited in one but not for another.
Features of Trading Platforms You Should Look For
Before you indulge yourself in the arts of trading, there are various factors you have to consider that could help make things more convenient throughout your activities. There will never be a single trading platform that’s perfectly made with all the features, services, quality, convenience, and compatibility.
Knowing all the best features of a trading platform doesn’t mean that you should stick to using that specific platform; familiarising yourself with the features can help you connect various platforms so that you can make the most out of the services they provide. Thus, here are some of the features you should be eyeing that could help you with your inquiry.
Security has always been a major concern when it comes to using services on the Internet, given that there are various cybersecurity threats that will stop at nothing to access people’s information to get a hand on their assets. The major difference that cryptocurrency has compared to real currency is that they aren’t being handled by the bank or backed by the government, which means they aren’t protected.
However, there are a few crypto trading platforms that found a way to provide security for their users’ digital coins by having an insurance policy. The only problem with insurance policies is that they can only protect a fraction of your assets because they are dependent on the actual worth of the policy. With that in mind, although your account is under protection, there is a limit as to how much the trading platform can protect your digital assets.
Crypto trading platforms aren’t all about insurance policies. Most of the crypto trading platforms that you can find in the digital market take advantage of technological advances for additional security measures. Biometric authentication, email confirmation, two-factor authentication, and other forms of two-step verification may add a few additional actions for you to take while trading, but they’re the best method of protecting your assets.
Fees are one of the main features that make it complicated for crypto enthusiasts to choose an exchange, which would make it even a harder challenge for beginners to understand. Despite having to register an account, trading platforms have to charge fees so that they can continue providing their service.
You have to look into the predetermined fees that they charge for every transaction you do because these can add up and may not fit your interest in the long run. Now, do keep in mind that trading platforms usually utilize a fixed fee model. However, there is some trading platform that charges you an amount depending on the volume of your trades.
If you’re an active trader or planning to frequently trade, you should also look into trading platforms that follow the Maker-Taker model. It’s a given that crypto traders are usually considered the takers, but active traders help make the market by contributing to the liquidity of a specific cryptocurrency have the benefit of having a lower transaction fee compared to market takers.
Crypto trading platforms that have a huge trade volume make it easier for you to trade your crypto without compromising the value since you have a higher chance of buying and selling them due to the number of trades occurring at any given time in the platform. One of the biggest mistakes beginners can make when looking for a trading platform is looking for a less-populated one, thinking they can do their transactions easier due to the space.
However, the busier the trading platform, the better since you’ll have the ability to buy and sell your digital coins anytime you want without having to pay a higher fee. Additionally, you can use trading tools to help you track which trading platforms currently hold the best trade volume.
Features are the significant variables that attract us toward a service provider since they provide us with convenience throughout our crypto activities. The three mentioned factors above, mainly security, fees, and liquidity, are only a few of the points you have to look out for in a trading platform.
But, familiarizing yourself with how trading platforms work in terms of trade volume, transaction fees, added fees, incentives, and the overall security they provide you and your assets. You’ll be able to get through your end goal in crypto trading and ultimately help boost your crypto portfolio.