Crypto trading is becoming more and more popular. As expected, with the rise in demand for trading services, there’s also a rise in the number of trading platforms.
However, not all of them are created equal, nor are they all safe. Today we’ll go over qualities that make a solid crypto trading platform, what to look for, and what to avoid. Let’s get right to it!
Do Your Homework
Decentralized trading is one of the main reasons why crypto is so attractive. Such a system brings a lot of freedom to trading, but also a lot of risks. With the lack of a governing body to check all the trading platforms that keep popping up, the onus is on the user to do their due diligence when choosing a platform.
That being said, there are several key indicators that will tell you whether a platform is suitable for use, or if it should be avoided altogether. Here’s a brief rundown:
- 2FA and Security
- Trading Features and Tools
- Volume of Trade
- Trading Fees
Reputation is Everything
The very first thing you should check is the platform’s reputation. Fortunately for us, we live in an age where it’s extremely hard to hide shady behavior, especially when finances are involved. With the cryptocurrency trading on the rise, there has been an uptick in trading platforms that are less than ideal, to put it lightly.
Do your research on individual platforms and look for any gray or black hat behavior in the past. Some companies are doing their best to hide past indiscretions, but there’s always a trail left behind. Dig deep and double-check everything. This principle applies to everything within the market universe, from platforms to strategies and professionals’ advice. That’s why you’ll find more than useful checking at least one review available on the best ideas to invest in stocks. You will access third parties’ opinions and build robust criteria upon your trading strategies before jumping into the markets.
Once you’re satisfied with the reputation of a platform, the next thing on the list is security. Security of your account is imperative if you’re going to trade regularly, at any reasonable volume.
Depending on the platform, you might run into various security features. That being said, two-factor authentication or 2FA is the norm. Some platforms use Google’s 2FA system, but there are other options available as well.
What 2FA does for you is adding another layer of protection and insurance that any log-in attempt has to be authenticated by you.
It’s no secret that trading is becoming more and more competitive. Automation is recognized as the tool that will give traders the edge in the continuously evolving world of crypto. Many are joining the Bitcoin Revolution and other similar platforms for such advanced trading features alone. These platforms offer accurate auto trading tools that are slowly ushering a new type of trading.
The key is to recognize what tools you need at your level of skill. Those who trade on a regular basis will absolutely benefit from exploring more advanced tools.
Volume of Trade
The volume of trade can tell a lot about a crypto platform. It’s an important metric, especially if you’re looking for fast trades. A low volume of trade doesn’t necessarily have to mean that a platform is shady. It could also mean that it is new.
However, keep in mind that low volume platforms make it extremely hard to sell and buy quickly. If you’re the type of trader who likes to chase candles in real-time, this might be a deal-breaker for you.
Another issue with low volume platforms is the lack of whales. If you ever decide to liquidate a larger amount of BTC, chances are that you won’t find a buyer on low volume platforms. Again, it all depends on how much you trade on average, and what your goals are.
The last point we’d like to make is that there’s security in volume. If you find a platform that has a large amount of BTC changing hands every day, that means people trust that platform. In that regard, the volume is a measure of security.
That being said, there is such a thing as fake volume. Again, if you check the reputation and do your research, you shouldn’t fall prey to such shady platforms.
Next, we have the fees. Fees are the unfortunate byproduct of crypto trading. After all, the people who build, own, and maintain trading platforms need to make their money somehow as well.
The issue with fees is that they aren’t standardized, just like most other things in the world of cryptocurrencies. Every platform has its own prices. In most cases, they are reasonable, but not always.
Checking the fees should be a part of your regular ‘platform background check’ prior to making an account.
At this point, you’re probably thinking, ‘how bad can it actually be?’ In all honesty, there are rare instances of incredibly high fees on legit platforms. But, fees don’t have to be massive to leave a mark.
Even if you think that the cost of transactions on your platform of choice is acceptable, they will add up over time. This is even more true if you plan on making many small trades, chasing spikes on the chart, and generally being an active trader.
That being said, fees are an integral part of trading and a necessary evil we can’t really avoid. The best you can do is find a platform that is reasonable in this regard, and one that offers other benefits to even out the playing field. Sometimes it’s worth agreeing to higher fees if the platform offers more in other ways.
Cover All Of Your Bases
These are just some of the things to look for when searching for a solid trading platform. If you do everything right, use common sense, and spend time researching your options, you’ll find a platform that works for you.
No matter how murky the crypto waters sometimes look, there are still many reputable, reliable platforms that are safe to use.
Massive amounts of money is changing hands in the crypto world every hour, and most of those transactions happen via platforms and exchanges. Do your due diligence and you’ll have no problem finding a safe place to trade and hone your skills.