coverbtc1 - What Are Cryptocurrency Trading Tools? – A Brief Introduction

What Are Cryptocurrency Trading Tools? – A Brief Introduction

Cryptocurrency is not a new thing in town, adverts are online, on the television, radio, newspaper, and even the outside media and the transit media. Tutorials on Bitcoin are on video streaming apps like Youtube, and everybody pretty much knows a thing or two about cryptocurrencies. But not all know about the intricacies, the nature of the market, the dynamism and how it operates, either as a trader or an investor.

Like traditional stock, investing in crypto is all about the future and what it holds, how well is your asset/securities going to hold up. For long-term investors, its advisable to hold on to the coin, as it is a future plan, a long-term plan that will require skill, dedication, and perseverance to hold but that’s the prerequisite for investing in crypto, since its a long-term plan. Like the traditional stock too, the aim of a short-term investment is instant gain, he makes his money and goes to another thing, in Bitcoin and alternative cryptocurrencies as well. Short-term investors are welcome, the central idea here is to buy the bitcoin when the price is down (at its cheapest point) and sell it when the rate is high (at its peak). And the nature of the market in crypto is such a way that it changes rapidly and drastically (highly volatile), meaning that the short-term planners might hit the jackpot if they plan adequately and as much as the gains are, so are the risk involved, thus, its vice versa.

Those as mentioned above are the inn thing about the crypto market; it can be sketchy, dicey and shrouded in obscurity. That’s why there are essential tools or instruments available that can help the ‘would be’ investor or trader sail the cryptocurrency waters without drowning, if careful.

What You Need To Know

Decision making is one of the most crucial aspects of the crypto market, timely intervention when to hold when to sell when to Invest when just to watch how things will turn out. These are a salient decision-making process that will affect the success or otherwise of the investor or trader. And there are few ‘flips and tricks,’ instrument or tools, that are available for the investor or trader to tap from so as to brace himself up for the task ahead and not make decision that will go against the productive nature of the business, because the market is interesting, yet, can be the other side.

Below are some of the tools needed to be a successful trader. These tools don’t do the trading nor do they guarantee you success in every trade, but the more you use one or combination of these tools, the more you get familiar with them and ultimately how the market work. This is what guides your decision in being a better trader.

Cryptocurrency Exchanges

crypto exchanges - What Are Cryptocurrency Trading Tools? – A Brief Introduction

Exchanges or digital currency exchange is a tool that allows you to trade your cryptocurrency for other assets, such as fiat to virtual currencies or exchanging between cryptocurrencies. They can be makers that typically take the bid/ask spread as transaction commissions for their services or simply change fees as a matching platform.

There are lots of exchanges out there in the market since they are one of the earliest tools in the market. Cryptocurrency exchanges can be centralized or decentralized. Currently, the centralized operates mostly and handles most transactions, but the tide might change soon. Assets on a decentralized exchange are quite difficult to hack but dicey and complicated to use. Example of decentralized exchanges are IDEX, Waves, Cryptobridge, and Open Ledger decentralized cryptocurrency exchanges. Due to the frequent hacks on exchanges, traders prefer to keep their assets in wallets which they have access to the private keys, which are quite safer but can still have room for more improvements.

Portfolio Management

crypto portfolio app 300x300 - What Are Cryptocurrency Trading Tools? – A Brief Introduction

This is a tracker that allows you to know the overall performance of cryptocurrency assets you are holding. Simply, it helps to know how much one is gaining or losing in total, especially when a trader/investor has his assets on different platforms. Some cryptocurrency wallets have this feature; others don’t. The ones that don’t, you might need to get a separate tool for it. For a more complex trader that trades with a lot of coins, getting to know the performance of the coin becomes a necessity. While some trackers are automatic, others are manual, meaning the trader has the privilege to choose his preference. Apps like Coindex beta and Coin Manager that can help in tracking the coins.

Advanced Tools

Though it might not be needed for trading, it becomes imperative to have it in generating long and short-term profit and make smart, calculated and wise decisions, though, its kind of still new and upcoming, but its worth the wait.

Analysis Tools

crypto analysis tool - What Are Cryptocurrency Trading Tools? – A Brief Introduction

This tool is essential for the success of a trade or investment. The tool will help to analyze the pros and cons of a coin. Help to identify the grey areas, give a frequent update on the protocol and necessary information about the volatile nature of the coin, all in a bid to keep the trader or investor safe. Due to the unpredictable nature of the market, an investor must always try to stay afloat, and in this sphere, the tool comes in handy. Though these tools are top notch and sophisticated, they can still be improved upon.

Notification Tools

price alert - What Are Cryptocurrency Trading Tools? – A Brief Introduction

This is a tool that notifies the investors on the happening in the market, especially since the market is so volatile and prices change every time and anytime. Most portfolio management and analysis tools have this tool inbuilt; they are mostly associated with tools that run on a static algorithm, though they cannot alter the changes in the market they can report these changes of price movements. The volatile moves in the market are such that once market dips, it might not recover in a while, so, the trader might see this as an indicator to sell, also when it goes up, it might stay up for a long time. Though the condition might change, as it’s not assured to stay forever in such a manner, an investor might decide to stay afloat and on top of the game himself, getting all the necessary information. Aggregators like crypto control might be of help in such regard as well.

Final Thoughts

It’s imperative to have in-depth knowledge about these tools, as it will help in shaping the mentality of the trader or investor who is smart enough to study the dynamics of an ever-changing industry like the cryptocurrency market.