Every day in the news, there’s always something about Bitcoin (BTC). It has got to the point that the average Internet user comes across Bitcoin-related posts at least once a day. It wouldn’t be long before such persons, including you, decide to take a leap of faith and buy Bitcoin or any other cryptocurrency.
As much as cryptocurrency trading is good, it may take a while for you to get the hang of it. From fluctuating market prices to bearish news, it is not for the faint of heart.
This is why we put together this guide on CoinJournal to help you choose the best places to buy cryptocurrencies. You will also learn about some of the strategy tips that will help you trade crypto for profits.
Where to Buy Cryptocurrencies
Buying cryptocurrencies today is a lot easier than it used to be ten years ago. Now, you choose from a wide selection of options, including cryptocurrency exchanges and buying from friends.
Here is our list of the best places to buy and trade cryptocurrencies:
1. Buy Cryptocurrencies from Centralized Exchanges
This is the most popular option. You can buy different types of cryptocurrency asset classes from Centralized Exchanges (CEXs).
Centralized Exchanges are simply cryptocurrency trading platforms that make use of an intermediary. The exchange acts as the intermediary or middleman because it creates the ecosystem for traders to buy and sell. The exchange also charges fees for transactions.
Examples of Centralized Exchanges (CEXs) to trade cryptocurrencies are:
2. Buy Crypto from a Decentralized Exchange
A Decentralized Exchange (DEX) is the opposite of a Centralized Exchange (CEX). Here, you can buy, sell or swap different crypto asset classes, without an intermediary.
Also, some of the cryptocurrencies that are not available on CEXs are readily available on some Decentralized Exchanges.
Some of the Decentralized Exchanges (DEXs) worth trading on are:
- Binance Smart Chain (BSC)
3. Trade Cryptocurrency on P2P Basis
You can also use Peer-to-Peer (P2P) to buy and trade cryptocurrencies. This model entails buying cryptocurrencies directly from the holders who want to sell.
Binance is one of the cryptocurrency exchanges that offer P2P cryptocurrency trading.
Strategy Tips for Trading Cryptocurrencies
You need a lot of strategies to trade cryptocurrencies so you don’t get your finger burnt or lose more of your portfolio when the market dips.
These strategies will help you stay above the water and make profits:
1. Follow the Market News
Although some cryptocurrency traders will save otherwise, market news remains an important trading strategy.
The general cryptocurrency market is driven by news, which forms part of the Fundamental Analysis (F.A.).
This played out when Elon Musk, the CEO of Tesla started “shilling” on Dogecoin. This gave the impression that he was interested in the coin. The outcome? Dogecoin ($DOGE) kept rallying to a New All-Time High (ATH).
Likewise, the news that El Salvador becoming the first country to accept Bitcoin (BTC) as a legal tender helped stabilize the crypto market at some point.
Follow the trends and the news in the crypto market. This way, you will be the first to know when the market is going bullish or bearish.
2. Use Your Stop Loss Effectively
As the name implies, Stop Loss (S.L.) helps you to determine how much you are willing to lose in a trade.
Always set a Stop Loss of 8-10% on each trade you enter so you don’t lose much in the end.
3. Trade What You are Willing to Lose
This is the best trading strategy for crypto – always trade what you are willing to lose. If you must buy with more funds, consider using Dollar Cost Averaging (DCA) so you can buy more coins.
But always trade with an amount you can comfortably lose.
4. Only Use a Reputable Cryptocurrency Exchange
The cryptocurrency trading platform or exchange you use has a role to play in your success as a trader.
There have been cases of hacks on some cryptocurrency exchanges. Such exchanges end up being compromised and the investors’ funds are lost in the process.
As a trader, ensure you take the time to run series of checks on the cryptocurrency to be sure it can protect your funds.
5. Avoid FOMO
The cryptocurrency market is sometimes driven by sentiments. This is generally called Fear of Missing Out (FOMO).
You may see some cryptocurrencies pumping or on a price discovery mission. Your thought line is usually to buy those coins and ride with them to make some profits.
On the contrary, it is not advised to buy green candlesticks or coins that are already pumping. Instead, look for coins that have lost substantial value over time to buy.
Cryptocurrency could be an escape route for people looking to be financially buoyant. The key to succeeding is to trade at the right platforms and use the best strategies to make profits.
Do you have more cryptocurrency trading tips? Please share so other traders can learn more.