The cryptocurrency exchange is a platform where you can buy and sell crypto. You can exchange some coins for others or buy them in exchange for fiat, that is, real money. The token exchange has become a promising way, the main thing is to choose a proven platform, such as the crypto trading platform Odos.
It should be understood that there are centralized and decentralized exchanges. The first sites control the actions of users, they can see the account. It can be said that this is a kind of service for the services provision.
Decentralized exchanges are completely different from centralized ones. In this case, no one owns your data, cannot manage it, or transfer it somewhere. The point of these platforms is to transfer transactions between users. Such sites work on blockchain technology, so your anonymity is preserved. But in this case, you need to be very careful.
For example, are you looking for a specific coin or do you want a step-by-step guide for beginners? In each of these cases, you can choose different exchanges. But there are some general requirements that exchanges should meet.
What should you pay attention to?
Let’s focus on the main directions.
The exchange must work legally and accept the currency that is convenient to pay. Information about this can be found on the website.
Since the crypto is not backed by any central institution, your assets on the exchange are not protected, unlike money in the bank or traditional investments. To protect your money, some exchanges have:
- insurance policies against hacking or fraud;
- own ways to ensure safety.
This must be known in advance.
The exchange should have sufficient trading volume so that you can sell or buy coins at any time convenient for you. The more popular exchanges often have the largest trading volumes.
What mistakes do beginners make?
Since the cryptocurrency market has a fairly low entry threshold, anyone with internet access and a small amount of capital can trade in cryptocurrency. But beginners sometimes make common mistakes.
1. Start with real money trading
Some exchanges allow you to use virtual money to understand how trading works. In this case, the user does not lose anything, but gains the necessary experience and understands the nuances. In the future, the specialist may start working with real assets.
2. Trading without stop loss
A stop loss is an exchange order that helps limit the damage. With a sharp change in prices, a person will be able to save some money, and not lose everything.
3. Doesn’t understand the difference between trading and investment
If a person plans to invest for a long time, he should not pay attention to price fluctuations. If a person wants to engage in trading, then it is worth selling digital assets as soon as the stop loss mark is reached.
4. Use someone else’s ideas
You should not buy or sell digital currency if someone advises it on social networks. Experienced traders do not follow the lead of strangers, but they try to work themselves with price fluctuations and take risks.