How to buy via a cryptocurrency exchange and trade
To buy and trade Cryptocurrency, you normally need to follow a 2-step process:
- To use an exchange website to buy some Cryptocurrency by using a card or bank account in your local currency. Typically the type you would buy would be bitcoin or ethereum.
- Coinbase is one of the most popular sites. If you sign up to Coinbase using https://www.coinbase.com/join/5a53da10678ce9015fbb2485 and buy $100 (£72) of currency we’ll both get $10 (approx. £7) of free bitcoin!
- To use a trading website to then buy various other types of Cryptocurrency using the bitcoins.
- Many of the popular and reliable trading sites no longer accept new members, but Kucoin is one who does.
- The tricky part is knowing what cryptocurrency to trade in. One technique is the technical one – looking at the history, price chart, trading volumes etc. The other technique is non-technical one and to examine the currency in detail to work out whether it is undervalued or overvalued. With cryptocurrencies this can include looking at why a particular one is better than others, what investors are on board, how stable is the development team (e.g. volunteers, venture backed paid staff etc.)
Security and keeping safe
It’s very important to consider security during the process. As all websites, but particularly financial ones you should choose unique password which are secure. You should also enabled the ‘2FA’ options which most of these sites offer which will require you to authorise use a SMS/authentication app on your mobile as well.
Another point to note is that it is not recommended to keep significant amounts of cryptocurrency on an exchange, as there are risks. ‘Wallets’ should be use and these can be software based or hardware based. Hardware wallets such as the Ledger Nano S are the most secure.