7 Tips for Choosing the Best Cryptocurrency Trading Platform
When you first become interested in cryptocurrency, one of the most important things is looking for the best cryptocurrency exchange, depending on your preferences. If you choose the wrong cryptocurrency trading platform, you may be dealing with tons of problems in the long-run, and all your effort will be wasted.
Looking for the right exchange means you should know what your main goal is. For instance, your plan may be investing in the long-term, while other people may have as objective simply trading in or out of positions with frequency.
An investor may search for spot exchanges, which are networks where people can buy or sell digital assets. For instance, a person can decide to buy, sell or transfer Spot Bitcoin to other exchanges or wallets or keep it for as long as they want.
A trader may be interested in derivate platforms, which are websites where one can trade products like futures or options. These trades can only be completed in the original exchange, meaning you can't transfer these assets to a different website.
The spot price is the current price in the marketplace at which a given asset (such as security, commodity or currency) can be bought or sold for immediate delivery. In contrast to the spot price, a future's price is the agreed-upon price for future delivery of the asset. After you've established what your main goal is, there are other things you should be worrying about, like regulations which apply to your country, security, etc.
Here you have a list with ten tips for choosing the best cryptocurrency trading platform.
The cryptocurrency market is large and is also continually expanding. It is crucial to take into consideration the reputation of the exchange you've chosen. Many networks are known for being involved in actions such as scams and hacks, leading users to risk all their money. It is crucial to research for reviews related to the exchange. It would be best if you look for the exchange in different social media networks; users never hold back bad reviews about them. Also, make sure you read the network's terms and conditions thoroughly. After all, you're trusting them your money.
2. Know Your Customer and Anti-Money Laundering Practices
Depending on the location the exchange is based in, different laws, offers and practices may be applied. Most cryptocurrency trading platforms are very clear with their KYC and AML practices and require all users to submit proof of their identity while completing the registration process.
The requirements may be different, depending on the platform. For instance, some of them may apply limits. It is also known that individual cryptocurrency exchanges immediately ban clients from particular countries.
Security is vital in every website you enter personal information in. Please, try to figure out if it's possible to enable two-factor authentication, which is something that most websites offer nowadays. If this isn't available, it's not recommended to trust on this website.
4. Insurance Fund
Another crucial factor for some users is if there is an insurance fund available in their exchange of preference. For instance, particular networks have funds available in case a customer has a determinate problem (these situations may vary, depending on the platform).
5. Fiat exchange
At some point, you'll need to use a fiat that's compatible with your national currency. Most exchanges have multiple fiat options, while others don't. You should also see the banks they work with, as well as the currencies they allow using in the website.
6. Leverage trading
This is something that's usually found on derivate exchanges. For people looking forward to entering short-term positions, this is crucial. Exchanges may offer different amounts of leverage, and there will be other guidelines related to liquidation and margin calls.
There may be different prices, depending on the exchange you decided to work with. There may be higher or lower amounts depending on several factors, such as participant location and volume. This means in some instances, there may be discrepancies regarding the prices, and that can be proof that the network has low liquidity levels or volume.