The world of crypto is quite complicated, but you can certainly find where to trade cryptocurrencies if you take your time and look at CEX platforms carefully. Some of them are better for spot trading while others offer extensive investment opportunities that may catch your attention.
How to pick a good crypto exchange
The crypto industry has hundreds of crypto exchanges to choose from with many exceeding billions in daily trading volume. Selecting a good platform to work with is quite challenging even for people with experience. We don’t want to make direct recommendations. Instead, we will give you a list of aspects that you should pay attention to when choosing a CEX platform.
- The UX/UI quality. For some reason, many people believe that the quality of user experience does not matter as much as the richness of features or performance. We argue that using a platform that has an ugly interface, overly complicated navigation, and chaotic presentation will greatly diminish your ability to trade efficiently. Choose web platforms that you feel comfortable using.
- The list of available assets. There are over 45 thousand different coins that are active at the moment. The total number of tokens that were issued exceeds hundreds of thousands without even counting NFTs. It means that you should have access to a wide range of cryptocurrencies to work with coins that you understand and can research extensively.
- Testimonials and reviews. Reading what other people think about a CEX platform is important. While the opinions of former and current clients of any given platform will never provide an objective image of a company and its products, it is still the most reliable source of information that you can obtain before experiencing everything personally.
Understanding the difference between spot and margin accounts
When you create a new account on a CEX platform, you will have a normal spot account at first. It allows you to start buying and selling cryptocurrencies using your finances without tapping into borrowed funds that can be given to you to open market positions if you also open a margin account which allows you to significantly increase the size of your position by using credit.
Margin trading is quite dangerous for beginners because potential risks scale with the number of funds you borrow. It is a good idea to use credit only when you have a promising signal that you trust. Otherwise, you will lose more than you can make by overextending when placing orders.
Automation is the biggest advantage
Retail traders that were working only with traditional financial markets rarely use automation, but crypto traders are used to it. Many CEX platforms have APIs allowing third-party vendors to connect directly and place orders on your behalf. It allows users to create automated trading scripts that place orders in their stead.
Automation is a great tool to use for strategies like Distributed Cost Average (DCA) and GRID. All exchanges provide you with a special ID number for your margin and spot accounts. You can use this ID to connect to any external service that you like.
Be careful when trading on the P2P market
Some exchanges still support P2P trading which was the dominant form of BTC trading back in the day. However, it is a dangerous method of trading and you can be scammed if you are not careful enough. We still recommend you focus on trading crypto using the spot market or engage with the crypto market via derivatives offered by some CEX platforms. Perpetual futures are quite popular among new-age retail traders working in the crypto industry.
Conclusion
To be a successful crypto trader, you should focus on finding a reliable CEX platform where you can start investing in the crypto market without any doubts and fears. Many cryptocurrencies are cheap and you can make money even without having a large starting capital. You can take a closer look at the ADA price or XRP price. Join many crypto exchanges and start making profits today!
