Using a cryptocurrency exchange can be complicated. There are a lot of details to keep track of and understand. The most important thing is to research and ensure that the exchange you choose will meet all your needs.
Know your crypto exchange
The first thing you should do is set up your account on the exchange. Different exchanges have different requirements for creating an account. Most require you to provide a name, email address, and password. Some may request government identification to help ensure that all users are who they say they are.
After this initial step, you can deposit funds into the exchange from your bank account or credit card. Once deposited, these funds will appear as a balance, depicting how much you have available for trading or withdrawal!
The next step is learning to trade through your newly created account at this crypto exchange platform. That can seem intimidating at first. There’s so much information about each coin that it can feel overwhelming trying to keep track of everything.
Know all the fees
Make sure you know all of the fees and charges for buying, selling, withdrawing, or depositing cryptocurrencies.
If you don’t understand them all, ask someone who does. In particular, ensure you understand what happens if your transaction is delayed or canceled. Some exchanges charge fees for these problems even though they’re not their fault!
Check out the trading volume
Checking the trading volume of an exchange before you use it is very important. If the volume isn’t high enough, there aren’t enough people trading on that exchange. That can lead to price manipulation and other issues that can damage your investment.
A good rule of thumb is looking for exchanges with at least $1 billion daily trading volume. You can compare trading volumes through various crypto data aggregators.
Consider the competition
Make sure you are comparing apples to apples. How does this exchange’s fees compare to others? How large is its trading volume? Is it safe and secure?
What kind of customer service does it offer? If other exchanges give you better bang for your buck, it might be time to switch over.
Understand security risks
There are many security concerns to consider when using a crypto exchange.
You may lose access to your funds, or they could be frozen or stolen by hackers. The exchange itself could shut down, leaving you unable to reaccess those funds. The government may take over the exchange and confiscate everyone’s money.
You must understand these risks before opening an account on an exchange and investing any of your capital there.
Do not blindly trust your exchange with customer service or tech support
Customer service is not tech support, and vice versa. You should expect both of these departments to be able to explain things in a way that’s easy for you to understand.
Some exchanges have built-in help centers with video tutorials that walk you through the process of using the platform step-by-step. Others have live chat support where you can talk directly with someone. If there isn’t documentation available about how something works on their website , then go ahead and ask questions!
If one person can’t answer all of your questions, chances are another employee might be able to fill in some blanks. As such, everyone gets their due attention without being overwhelmed by too many requests at once.
Make sure you know how to get your money back if something goes wrong
There are many ways a crypto exchange can be compromised, and there is no guarantee that a particular exchange will be around forever. If you’ve invested any significant amount of money in cryptocurrency, you must know your options for getting it back out if things go south.
The best way to do this is by creating an email address specifically for use with crypto exchanges. However, never use the same information across platforms. If one company is compromised, hackers will abuse the same login details elsewhere. Also, enable 2FA when possible.
As we’ve shown, there are key points to remember when choosing a crypto exchange.
In general, knowing what you’re doing is essential before making any major financial decisions. That is particularly true for crypto exchanges. If this sounds like too much work for you, then maybe it would be better not to use cryptocurrencies.
But if the idea of trading currencies without having any money invested appeals to your inner gambler, try out one of these platforms today.