If you are thinking about starting to invest in the cryptocurrency market, there are some things you should have in place before you make your first trade. Being organized and doing a little bit of preparation is the key to being successful as a trader.
This article will explain some of the steps you should take to ensure your trading business gets off on the right foot.
Education
The first thing you need is education. There are lots of free resources on YouTube and around the web for you to start and learn how to trade cryptocurrency. It can be tempting to just jump into a trade because you’ve seen a tip in a Facebook group, but in reality, you are going to have much longer term success if you learn a little technical analysis first.
Technical analysis is the process of analyzing charts to see where a trend may end, so you know when to buy, sell or wait in a market. It is often the difference between a profitable trader and an unprofitable one.
You should also be aware that the news can impact your investments. For example, if a crypto asset is connected (pegged) to the dollar, and the dollar value drops due to an economic announcement, then the value of the crypto is likely to drop as well. You can view news announcements that can affect currencies in advance by using an economic calendar like Forex Factory.
Education is going to give you a better understanding and a better footing for success, so ensure you spend plenty of time on this stage prior to beginning to trade. Once you feel confident in the basics you can start and devise a strategy.
Hardware
You are going to need some equipment to start and trade. A desktop computer for trading is a must as a laptop screen would be very difficult to do technical analysis well. Luckily, most of the software you will be using is cloud based or online, and so you don’t need a hugely powerful machine.
A quad core desktop will be more than enough to start your trading career, but it is worthwhile getting one with multiple monitor inputs as traders often find they need more screen space.
Software
First things first, you are dealing with sensitive information and assets, as well as logging in and out of accounts where you may have currency stored. With this in mind, you need to ensure your computer is well protected from hacks. Ensure you do all updates to software regularly and that you have a good quality anti-virus and spyware software installed on your desktop.
In addition to these things, you are going to require some charting software. Professionals often use more advanced charting software such as Sierra Chart for their trading; however, this platform has a large learning curve, and requires you to pay both a subscription and a data feed cost.
For a cheaper alternative when starting out, Trading View is a great option. This platform has packages to suit every budget (it even has a free option!) and data feed is included. You are also able to view stocks, currencies, commodities, and crypto on the platform, so it lends itself to any other kinds of trading you may do in the future.
Once you have all of these things in place, you are ready to place your first trade. However, for a few months, it would be wise to trade a demo account to prove your system is profitable before diving into a live account and risking real funds.
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