People who begin their careers in crypto investing need a bit of guidance. We’ll give you a short guide on how cryptocurrency trading platforms work and the features that they provide.
Main Forms of Trading Platforms
Many first time traders think that all crypto exchanges are the same and the difference between them is the number of cryptocurrencies that are offered for trading. However, the difference between trading platforms is far more in depth.
The most popular type of crypto trading platforms offers both cryptocurrencies and fiat trading options. These trading options allow users to place different order types on the market (i.e., stop-loss, stop-limit, etc). Nowadays, these trading platforms offer margin trading options for clients.
The second type isn’t an exchange, but a Forex broker. Many Forex companies are paying attention to the crypto market, which is becoming more popular than fiat trading. Forex brokers offer Bitcoin and a few popular altcoins to their clients.
The third type has less functionality and gives clients find buyers and sellers and place bids. These bids have fewer analysis instruments as the main idea to give users an opportunity to exchange multiple cryptocurrencies amongst each other.
Sign Up Process
Before you can trade on any cryptocurrency platform, you’ll need to sign up there. This procedure is the same for all cryptocurrency platforms but can vary slightly. The standard registration option requires traders to enter their email address (sometimes they are asked additional data including their first and last name).
However, Forex brokers tend to have a more difficult sign-up procedure. They’ll ask for your email, country of residence, address, first and last name. So make sure you have all of your important information nearby to make the sign-up process a lot easier!
Nowadays, every trading platform has a verification platform. This is to ensure that everyone trading on their platform has legitimate information and are not scammers. This is an important step because you’ll encounter trading limits if your account isn’t verified.
How do you pass this process? You’ll have to enter more personal information to that specific cryptocurrency platform. The next step would be to provide a trading place with papers confirming your address and scan copies of your photo ID.
There are some image quality requirements before sending out those copies, and it’s better to learn them before sending anything. Invalid or unclear data will lead to the platform denying your documents, forcing you to start the verification process from the beginning.
As for Forex brokers, they have verification procedures as well. You have to do the same steps in order to remove the trading and withdrawal limitations. Once your account is created, you can start trading. However, before you can place your first order, you must add some funds to your account.
Deposit and Withdrawal
Trading requires money. Before starting, you’ll have to place an amount in your trading account. Depending on the type of exchange, you’re allowed to invest in fiat or cryptos. Some crypto trading platforms allow clients to fund their accounts with standard currencies such as the Japanese Yen and US Dollars for example.
Once you fund your account with fiat money, you can use traditional debit or credit cards. Some cryptocurrency trading platforms have electronic payment systems such as Neteller, Paypal, Skrill, and others.
Forex brokers offer more withdrawal and deposit methods, and all of them both have cryptocurrencies and fiat payments. However, it’s the mention that these companies allow traders to use fewer cryptocurrencies than exchanges.
Cryptocurrency trading platforms vary from exchange to exchange as they offer different functionality. Some online services give traders minimum features and simple charts that don’t allow clients to conduct technical researches.
The others have cryptocurrency trading platforms that have serious analytical tools such as indicators. For instance, the trading view chart is the most functional one.
Besides charts, crypto trading platforms give traders other important tools including order window, order books, and others.
Why is it important to use limit orders? Let’s say that you want to buy BTC/USD. The asset’s price is currently at $6,000. However, you predict that the currency pair will decline about $5,800 before it rises upwards.
You can wait for this to happen and open up your positions manually, or place a stop-limit order at $5,800 and forget about the chart’s changes until the order triggers.
Crypto Trading Fees
When you’re trading on exchanges, pay attention to the fees. Trading platforms like Monfex will take a commission based on the traders’ activities. There are withdrawal and deposit fees along with trading fees that you’ll have to consider.
Now that you know everything about trading platforms start trading! When trading, make sure you take the time to research before buying a specific coin. It’s a risk, so treat it as such.
Want our honest opinion?
Use Monfex, as the crypto trading platform has competitive fees and an intuitive interface for users. We suggest that you try it out and tell us about it in the comments. The future of cryptocurrency begins with you, so start investing!