A crypto trader buys and sells cryptocurrencies on an online exchange, typically to generate profits. Many people trade cryptocurrencies for profit, either by holding onto them with the hope that their value will increase or by actively buying and selling them to make short-term gains. Although crypto trading can be risky, its volatile nature can result in significant losses for traders who are not careful.
The risks associated with crypto trading are clear. Cryptocurrency prices are volatile, and exchanges are always vulnerable to fraud and hacks.
Therefore, make sure you research before committing any funds to cryptocurrency exchanges or platforms, and ensure that your cryptocurrencies are stored in a safe wallet at all times.
You should start slowly and learn as much as possible if you are new to crypto trading. Before moving on to live to trade, it is a good idea to practice with a demo account on an exchange before attempting to buy and sell cryptocurrencies. Many online resources can teach you the basics of buying and selling cryptocurrencies.
How your broker can help you crypto trading
The way you trade cryptocurrencies is dependent on what you choose. You can trade with another person, utilize a cryptocurrency exchange, or use a broker.
Although each method has advantages and disadvantages, in general, most people will find it best to use a broker. Here’s why.
Brokers enhance security
You trust an exchange when you trade cryptocurrencies so that it won’t be hacked and your funds will be protected. Although exchanges have improved their security in recent years, several high-profile hacks have occurred, Brokers hold your funds in a segregated account, which ensures they won’t be stolen if your account is hacked.
Brokers offer more privacy
A cryptocurrency exchange requires you to provide personal information, including your name, email address, and phone number. Hackers can use this information to track your activity and steal your identity.
Brokers do not require you to provide personal information. Your activity is more private and can’t easily be tracked.
More features are available with brokers
Brokers offer a wide range of tools and features to make trading more accessible and profitable, whereas cryptocurrency exchanges are mostly limited to buying and selling cryptocurrencies.
Brokers may offer the following features:
- Advanced charting tools
- Indicators used in technical analysis
- Calendar of economic events
- News feeds that are updated in real-time
Brokers better serve customers
You will have difficulty getting help when using a cryptocurrency exchange since exchanges are often unresponsive to customer support requests. The broker, however, has excellent customer support teams that can help you whenever you need it.
Fraud is better protected by brokers
Scammers often use exchanges to defraud people since they are not regulated like brokers. For example, people have lost money after sending funds to a fake exchange address.
It is possible to ensure your funds’ safety and avoid being scammed when you use a broker.
Prices are better with brokers
The price of cryptocurrencies is highly volatile due to cryptocurrency exchanges’ high fees and low liquidity. As a result of lower fees and better liquidity, brokers tend to have more stable cryptocurrency prices.
More payment options with brokers
When you don’t own any cryptocurrency, to begin with, it can be difficult to pay on cryptocurrency exchanges. The easiest way to start cryptocurrency trading is to fund your account with fiat currency, such as USD or EUR.
For most people, brokers provide a better overall experience when trading cryptocurrencies, even though there are some clear advantages to using exchanges. Brokers provide more options for buying and selling cryptocurrencies and customer support, education, and security features that most exchanges don’t offer. You should work with a broker if you want to trade cryptocurrencies reliably and trustable.