The currency which values they said is pure speculation, and everyone thinks just a bubble a few years ago has now more than a billion-dollar market cap and is still climbing. So, if you got into cryptocurrency early and made a lot of money on it, congratulations, but if you’re new to the cryptocurrency game, or you have not been able to make money yet, it might not be too late to start trading.
However, before buying cryptocurrencies, ensure that you only trade on a reputable exchange. To ensure your funds are safe, you may want to buy crypto with Swyftx and other trusted exchanges. A trusted cryptocurrency exchange can help you protect your investment from being hacked or stolen by hackers.
Security is not only what a reliable exchange can provide to investors. However, not all traders and investors know how to maximize their trading potential when using an exchange. If you’re one of those, read through this article as it provides six ways you can do to make the most out of your cryptocurrency exchange.
Diversify Your Portfolio
Cryptocurrency is a volatile investment, and as such, it’s not recommended to put all your eggs in one basket. If you think that Bitcoin and Ethereum are the only cryptocurrencies worth investing in, think again. Other cryptocurrencies are also worth investing in. Investors just need to know what technology they’re investing in and why they should invest in it.
For example, Polkadot (DOT) aims to incentivize interoperability among blockchains, leading to a faster and more scalable blockchain ecosystem. So, if you believe in the potential of this cryptocurrency, find a trusted exchange where you can buy Polkadot Australia to diversify your portfolio.
Enable Two-Factor Authentication
Two-factor authentication is a security feature that requires you to input a code generated by an authentication app in addition to your password when logging into your cryptocurrency exchange.
This feature adds an extra layer of security to your account and can help protect your funds from being stolen by hackers. Most popular exchanges offer this feature, so be sure to enable it if your exchange does.
Create An API Key
Most cryptocurrency exchanges provide an API (application programming interface) key to enable you to perform automated trading. This can help you make the most out of your trades on an exchange because it allows trading bots, which is an automated software that analyzes market actions and performs trades.
To get started, go to your preferred cryptocurrency exchange and look for the “API key” area, where you may get a one-of-a-kind API key. Keep the key somewhere secure since you won’t be able to get it back if you lose it. Also, remember to test your automated trading scripts before putting them into action on the live market.
Use A Trading Bot
Trading bots are computer programs that use historical data and a trading strategy to predict the future price and execute the buy or sell orders. A good trading bot will increase your profitability by minimizing your time monitoring the markets.
Many trading bots are available on the internet, but not all of them are worth investing in. If you use a cryptocurrency exchange that provides an API, finding a trading bot should be easy as most of them already have integrations with popular exchanges.
Use Stop-Loss And Take-Profit Orders
Utilizing stop-loss orders on an exchange is an essential part of any successful trading strategy as they help you protect your investment from incurring significant losses. A stop-loss order is an order to sell or buy when the price goes against your desired direction by a certain pre-determined amount.
On the other hand, take-profit orders are used to maximize your profits by selling when the price goes above a certain point. By utilizing both stop-loss and take-profit orders, you can protect your investment while maximizing your profits.
Utilize Available Trading Indicators
Trading indicators on exchanges help you make informed decisions by providing more data on your selected cryptocurrency pairs. They provide information about the momentum of the market, the strength of a trend, and the current buying and selling pressure.
There are a variety of trading indicators available such as the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD).
Relative Strength Index (RSI)
The Relative Strength Index (RSI) is a popular momentum indicator used to measure the speed and change of price movements. It oscillates between zero and 100, with a reading of 50 it signals that the asset is in equilibrium.
In general, when prices move below 30 on the RSI, it is considered oversold and a buy signal. Conversely, when prices move above 70 on the RSI, it is deemed to be overbought and a sell signal.
Moving Average Convergence Divergence (MACD)
The MACD is a common momentum standard that measures a market’s momentum by comparing the difference between a 12-day and 26-day exponential moving average. As a signal line, a 9-day exponential moving average is placed above the MACD.
This is also a tool for determining buy and sell signals. When the MACD crosses its signal line, a purchase signal is generated. It is considered a strong sell signal when the MACD crosses below its signal line.
The Bottom Line
The easiest way to improve your cryptocurrency exchange experience is to take advantage of all the available tools at your disposal. There’s always room to increase your profits, whether using an automated trading bot, utilizing trading indicators, or creating your trading strategy.
David is a crypto enthusiast and an expert in personal finance. He has created numerous publications for different platforms. He loves to explore new things, and that’s how he discovered blockchain in the first place.