Every crypto trader or investor needs to select the right exchange so that they don't get into trouble on the way. No matter whether you want to invest and hold or trade regularly, you need to be careful while choosing the exchange. There are several things that determine the quality of any exchange. So, it is better to know the factors in advance rather than regretting later.
Here you will learn different factors such as security, regulations, insurance, leverage, fees, etc. Read on the article to understand in details that how do these factors play an important role in selecting the right cryptocurrency exchange.
Factors to Consider Before Choosing a Cryptocurrency Exchange
When you are deciding on the right exchange, you must know your interests. What is your goal and how do you want to put your money into the market, on a long-term basis, short term or day trading? Then you must look for the following things.
First and foremost, checking the reputation of an exchange is the most important thing. Because there are many fake organizations who can plunder your money in an unethical way. Conduct research about the exchanges on different platforms to ensure there are no such cases found. You can simply type the name of the exchange following the term “scam” to find any complaints. If you get any sign of such complaints or any stories then it is better to find another platform.
2. Security Regulations
Security is most important nowadays. Check whether the exchange offers a 2-factor authentication process for logging into your account. Otherwise, you can simply reject the exchange. Moreover, check what type of authentication process the exchange is offering.
3. Document Verification or KYC
When you create an account for trading in the cryptocurrencies market you may need to provide your personal information like photo ID, residence proof, etc. Some exchanges also ask these details during fund withdrawal and some of them require it during account opening. This verification is required for avoiding any type of money laundering or mishappening. Most importantly, check that trading cryptocurrencies are legal.
Almost every exchange provides leverage for short-term trading. Leveraged trading means a trader can borrow money funds from the exchange for taking a higher position with less amount. The scale of leverage may vary from one exchange to the other. It can be somewhere between 1 time to 100 times depending on the exchange’s policy and regulation.
Another important thing is the number of participants using the trading platform in a given time. Look for an exchange that has a higher volume at any given time. Higher volume allows you to easily enter or exit your position. However, checking volume can be a difficult task because many exchanges put wrong information. You can check third party data that offers information on order details and volume for concrete your research.
Last but not the least, check transaction fees on different exchanges. However, most exchanges charge small fees but there may be other charges like withdrawal or deposit fees. So it is essential to consider the fees before you select a trading platform.
Making money from a cryptocurrency is easy if you can meet all the requirements. Only choosing the right platform is not the way to succeed, you need to fulfill other requirements. Preparing a trading strategy is another important part of your trading journey. You need to train your mind to avoid impulsive trading and stick to the trading strategy you have planned.
If you want to learn how to trade in the cryptocurrencies market, then you can learn it from 5coins-5million.com. Hopefully, this article has helped you to choose the right platform for cryptocurrency trading.