Cryptocurrency Trading On The Exchange

Cryptocurrency trading is a new promising area of internet trading that offers the opportunity to earn profit from trading cryptocurrencies. Cryptocurrency appeared a short time ago (in 2009, according to Wikipedia), offering an advanced approach to money for payment on the Internet – with no control, commission, or agents – and leading to the emergence of a huge, incredibly profitable market with fantastic profits and a comprehensive crypto economy guided by its own laws and rules.

All of this has occupied those minds that are concerned with modern technologies and additional sources of revenue. Well, what is cryptocurrency trading and how do you cash in on it? We’ll talk about that in our review.

Cryptocurrency trading in exchange


What is cryptocurrency trading and how do you cash in on it?

Before answering this question, let us give the definition of the term «cryptocurrency» – it is a virtual currency whose unit is a coin issued through the Internet and isn’t related to the usual currency or any state currency system. Put simply, it’s electronic money.

Cryptocurrency trading is the same as Internet trading – it’s just, in this case, instead of the traditional assets (currencies, shares, stocks, etc.), the trader deals with cryptocurrencies (for example, Bitcoin, Litecoin, Quarkcoin, etc.). Unlike binaries and Forex, this market is even more vibrant and impulsive; the appetite to participate in it is continuously whetted by quick price increases and «crazy currency bouncing». The chance to make fantastic profits from cryptocurrency in such a short time period has become a topic of bitter arguments: someone accepts cryptocurrency, others argue against; however, its presence in the market makes sense and is especially essential in the age of overall globalization and Internet evolution (how do you make money in the cryptocurrency market? learn here).

Everything is traditional indeed, if you tried trading binaries, Forex etc. Traders buy cryptocurrency at the most favorable rate and wait for the price to increase to sell it. To trade cryptocurrency you don’t have to perform complicated manipulations; your main tools will be charts, on which you can estimate the currency trend: up or down, recession or upleg; orders – or, in other words, the requests of crypto market players on cryptocurrency purchase or sale; transaction history, which helps you to monitor the transactions list in the exchange and also the tools with which the transactions occurred; and traded values, which let you specify the cryptocurrency values changing hands. Sure enough, indicators, strategies, and automated trading are available for you, and you can make money mining and cloud mining.

Market volatility, continuous growth or drop in the currency rate, and higher risks faced by investors resulted in the entire «cryptocurrency fever»: now everyone is engaged in disputes over when the digital currency will burst and what happens next? Due to the news, startling statements, and calls, we all know when the surge pricing of such currencies happens and when they go down.

Cryptocurrency volatility is a hundred times higher than its index among traditional trading options. But cryptocurrency trading also brings the risk of loss, and if you don’t manage to monitor the trend change, you risk losing your money. The risk is also in the cryptocurrency future, which is vague, and today it isn’t clear what happens after this «bubble bursts». After all, crypto exchanges may be blocked or hacked, or your account may be hacked because of a weak password, and, since the exchange is not responsible for such cases, all the losses fall on the trader’s shoulders. Obviously, all of these risks don’t stop investors from trading cryptocurrency and getting magnificent profits; the chance to make quick money attracts to cryptocurrency trading a growing number of market players today.


Basic terms in cryptocurrency trading

Cryptocurrency – digital currency issued by attacking mathematical problems based on cryptography.
Cryptography – mathematical «language» used by ciphers and code generation for the information to be secured and hidden; applied by bitcoin transactions confirmation.
Blockchain – file/database or «transactions log».
Mining (English «mining» – extraction of mineral resources) – getting cryptocurrency (cryptocurrency program code) through computational performance; the computational performance is provided by users for new transaction blocks generation; with this the user may reckon on payoff by cryptocurrency coins.
Miners – people engaged in mining or, in other words, getting cryptocurrency – searching through millions of combinations for the only true code (otherwise called hash), which secures them the payoff.
Cryptocurrency exchange – trading platform used by traders who want to earn profit through cryptocurrency trading.
Bitcoin – the first cryptocurrency in the world available for traders as digital currency.
Satoshi – the smallest indivisible part of bitcoin (or bitcoin-copeck; 1 bitcoin is equal to 100,000,000 satoshi).
Altcoin – common name of cryptocurrencies that are offered on the market instead of Bitcoin.
Fork – a cryptocurrency that appeared on the market after Bitcoin and other altcoins and is their partial analogue.
Crane, faucet – special internet resource, where users can get cryptocurrency for the challenges done.
Pump – large-scale digital currency purchase for its stock jobbing.
Damp – price «slump» planned by high rollers.
Fiat, fiat currencies – real money whose price is set by the state (RUB, USD, EUR, etc.).


What is the difference between Forex trading, trading binaries, and trading cryptocurrency?

A difference exists and is significant and works for the trader. Unlike traditional and familiar financial markets (for example, binaries or Forex), the profit from cryptocurrency trading is hugely higher due to its «fantastic volatility». However, the percent of risks and losses is also high in the cryptocurrency market: you aren’t safe from crypto exchange block, your account being hacked (despite strong authentication), etc. Crypto exchanges don’t have regulations, as there is no completed regulatory structure for this marketplace yet, and the virtual market complies with common safety requirements and the need for user verification, although this doesn’t protect traders from unforeseen situations.

Binary trading is one of the simple and available investment options. As you know, when trading options, the trader just has to estimate the supposed quotation move (up or down). Forex trading (the whole truth about Forex) is somehow more complicated than the binary market and requires better knowledge and calculations (proficiency in using pending orders, stop losses, and margin calls is a must); however, the incomes here may be higher than those achieved through binary trading. Cryptocurrency trading doesn’t require the trader to have comprehensive knowledge, and yet, to make a profit, the investor needs to monitor the digital currency dynamics, noticing what coins are in great demand.

As we already pointed out in our article, the keystone of such trading is cheaper purchase and more expensive sale of the currency. When trading in the usual financial markets, you can monitor the market dynamics and possible changes through the news and high-profile events, but it’s not all that simple with cryptocurrency. After the release of any crucial news, the dynamic of digital coins may change several times; apart from this, there is another interesting twist here: if a group of traders agrees to a large-scale purchase/sale of virtual coins, it also may cause virtual market changes and if you don’t monitor them, you will lose your coins.

So what do you do? «Playing Vanga» (or «petting a cat»), the joke wide spread in virtual trading, certainly doesn’t work in terms of getting you rich. You should be serious and know how to analyze the market, monitoring the climate among its players. Also work properly with the set of standard tools available on crypto exchanges – charts, order book and trading history, orders (here BUY [purchase] and SELL [sale] orders are accepted; also in some exchanges you may use stop-orders [which will let you get profit by reduced risks]) and stop-limits (orders pending till attaining the mark of the price set). All of this data properly used will help you analyze the market situation in the right way.

What is the difference between Forex trading, trading binaries and cryptocurrency?

Forex, like binaries, is attractive because you are safe, as solid brokers make the effort to get licenses and are housed within professional associations, all of which gives the confidence of traders a boost. Crypto exchanges won’t give you that. And despite the fact that digital money becomes one of the assets of binary or Forex trading and may bring you high profits, trading in cryptocurrencies doesn’t leave you 100% sure that you’re going to get easy money. Digital currency is dynamic, and you are supposed to be good in using information and reacting to market sentiment changes in a timely manner.


Why do you need a cryptocurrency broker?

First, when trading cryptocurrency, traders got profits by mining; then to start working with virtual money, they signed up at a crypto exchange. Due to the continuous growth and popularity of digital currency, cryptocurrency trading appeared, which is performed by cryptocurrency brokers. Today such cryptocurrency brokers, for example, are the following companies: Alpari (official website), FreshForex (official website), Grand Capital (official website), 24option (official website), InstaForex (official website), HYCM (official website), Forex Club (official website), etc.

Forex brokers (as well as binary brokers), which among available assets offer the cryptocurrency trade, are more popular with traders. In this case, working with cryptocurrency, you are safe from hacks, which crypto exchanges are famous for. The broker obeys the laws and has licenses. But here you also need to monitor cryptocurrency trends as the risks of sudden losses of virtual money are still there.

Cryptocurrency brokers’ ratings are also popular on the Internet (ratings may be for both binary brokers and Forex brokers), as is feedback from traders on dealing with their trading terminals. While composing cryptocurrency brokers’ ratings, the following factors are considered: license availability, experience in the market, image, feedback from traders, and available cryptocurrencies (brokers AMarkets (website), Alpari (website), InstaForex (website), Forex Club (website) have a great number of available cryptocurrencies: apart from Bitcoin (website) and Litecoin (website), there are also Dashcoin (website), Ethereum (website), Monero (website), Zcash (website), Ripple (website), etc. available for users). So trading cryptocurrency with a broker will reduce your risks and allow you to work in a safe terminal.

Why is a cryptocurrency broker better than a cryptocurrency exchange? If you are not experienced in trading in financial markets, this information will be crucial for you, and if you are aware of crypto exchanges’ disadvantages, you will save time and money. Starting to trade cryptocurrency, you need to know that exchanges often provide their users a not-so-user-friendly trading terminal, which is hard to work with not only for novices, but even for professionals in trading. The cryptocurrency broker offering cryptocurrency as one of the assets lets a trader work the way he is used to. Trading on the crypto exchange is often absolutely unfavorable for beginning traders: here are big deposits, commissions and payments for service, executed transactions, and expensive money transfers to wallets.

One of the core issues of crypto exchanges is their inadequate safety level; they are often attacked by hackers and close, and if your account is hacked, the exchange won’t reimburse your lost money. The cryptocurrency brokers certainly have their disadvantages, too (for instance, a limited number of cryptocurrencies), but there are enough advantages as well, so lots of traders work with safe trading platforms. Such brokers, like binary brokers and Forex brokers, put effort into providing quality service, training programs, and useful materials in your native language, and you can also send your questions to customer support and get expert answers. Trading here is smoother and simpler than in a crypto exchange.


Platform for cryptocurrency trading

The platform for cryptocurrency trading lets you work at ease with cryptocurrency, making the trade functional. Choosing the right currency trading platform, you can make your work more efficient and focus on priorities. Today’s cryptocurrency trade is possible either on a crypto exchange or through cryptocurrency brokers (binary brokers, Forex brokers).

Choosing a crypto exchange, you will face the fact that there are plenty of such platforms on the Internet. How do you pick the one that fits you best? Good cryptocurrency trading platforms (for instance, Poloniex (website), EXMO (website), LiveCoin (website), Bitfinex (website), Cryptonit (website), Kraken (website) etc.) have the following set of features:

1. A large number of cryptocurrencies, both of great demand and becoming popular. The wider the choice of coins, the more profitable the trade;

2. Quick and smooth deposit and withdrawal. Crypto exchanges make efforts to offer their users various ways of money transfer: payment terminals, bank transfers etc.;

3. Exchangeability of cryptocurrencies into rubles etc. Not every platform provides this option;

4. Platform language. Some crypto exchanges strive to offer to traders information and support in native language, but not every platform boasts these services. As for technical support, here it’s complicated and either you won’t be able to contact managers or, in the best situation, your contact will be in English;

5. Availability of mobile applications, which let you trade from any part of the globe;

6. Tools for trading and information analysis (orders, charts, graphic elements, indicators, etc.). The more additional tools you have, the more chance you’ll get to reduce risks and increase your capital;

7. Platform safety is the one of the core challenges of crypto exchanges, and in attracting traders to the platform, the exchanges promise traders that by following all of the safety tips (complex passwords, strong authentication, etc.), they can trade smoothly and not worry about their accounts being hacked and all of their money disappearing. Despite hacker attacks still being a threat for exchanges, we recommend following the safety tips offered by the resources.

8. Positive feedback from traders about the exchange.

All of these aspects work for a trader also when choosing a cryptocurrency broker. However, what the trader is supposed to choose for trading – a crypto exchange or a cryptocurrency broker – is his own business. Not any cryptocurrency broker can offer the maximal functionality for trading cryptocurrency: cryptocurrency trading and exchange, trading on the weekend while traditional exchanges are closed, implementation of more wide spreads with strong market volatility, comfortable commissions, and contributions by a digital currency trading service.

Platform for cryptocurrency trading


Cryptocurrency trading on Android and Apple

Cryptocurrency trading is a serious job, whose efficiency depends on continuous market trend monitoring, and it’s easier to do now due to the growth of technology. Mobile applications on Android and Apple let you trade whenever it’s comfortable for you, at any time, in any place in the world. They have the tools you need for smooth 24-hour trading and let you not only trade digital currency, reacting to market changes in a timely manner, but also withdraw funds easily and quickly.

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