HOW TO PICK A GOOD COIN TO TRADE IN CRYPTO
what should I look for when choosing a coin to day trade?
Now I need to pause things here and say, I am not a qualified financial advisor. The information below is purely my lessons, observations, and experience in the crypto world that I want to pass on. If you decide to invest in cryptocurrency, only invest what you are willing to lose. Do your own research and learn from as many people as you can to gain a well-rounded understanding of cryptocurrency trading.
Trading can be simple when you follow your basic rules.
#1 Volume
By trading volume, you can understand the popularity of particular crypto, and the amount of activity that happens around that coin or token. A cryptocurrency must have considerable volume for day trading. A good trading volume is an indication of a healthy investment. Cryptocurrency trading volume is determined by the number of trades. The higher the number of trades, the better the volume.
#2 Volatility
Volatility refers to the price fluctuation, that is predominant in the cryptocurrency market which means the digital asset can be either a success or a failure for the trader. For day trading, one should choose a cryptocurrency with upward price volatility so that you can make a profit as and when it spikes. It is not unusual for a coin price to fluctuate by 10-50% in a day.
#3 Cryptocurrency Exchanges
You must remember that the crypto you choose must be supported by the reputable exchanges. Mostly the day traders store their asset in cryptocurrency exchanges which is quite risky, so the security is high. You must look out for the number of coins listed on the exchange along with transparency and transaction fees.
#4 Recent News
News can affect any industry and if it’s good, the prices might rise and vice versa. Cryptocurrency industry is sensitive to negative news as it is not regulated, unlike fiat currencies. Popularity and impressions play an important role in the cryptocurrency industry as its being managed by people all across the world.
#5 Active Team
For any crypto project success, you must see how active the team is! The more they are active, the more prompt they can be in answering your queries. A strong and active team is helpful as they send regular updates regarding the particular token or coin.
Now, let us move on to the top 5 cryptocurrencies that are best for crypto day trading:
#1 Binance Coin (BNB)
Binance Coin (BNB) is the popular crypto of the most popular crypt exchange, Binance, which was Ethereum based but recently BNB released its mainnet coin. The users deploy BNB tokens to pay the fees levied by the exchange for using the services. The fees generally include exchange fees, trading fees, and listing fees. BNB is chosen by most of the day traders because of its growing demand and popularity.It has been enlisted by all the popular exchanges and wallet partners and also considered as one of the best crypto to day trade.
Click here to trade BNB
#2 Ethereum (ETH)
Ethereum is the second largest cryptocurrency in the world, with fairly high volatility. Because of its smart contract application and decentralization, its use cases are growing significantly. For the day traders, a good amount of volatility provides for a great opportunity to profit, within a short span of time. The best part is that you can make money anytime irrespective of the fact that the ETH price is going up or down.Plus, it is available in almost all the exchanges.
Click here to trade Ethereum
#3 EOS (EOS)
EOS has developed exponentially in terms of raising billions of dollars. Its price skyrocketed multiple times creating a high level of volatility. A day trader can make huge profit taking this volatility into an advantage. EOS is also one of the top cryptocurrencies of all time, with active team support and is also available in most of the exchanges across the world. EOS can be considered as one of the best cryptocurrencies for day trading.
Click here to trade EOS
#4 Tron (TRX)
Tron has a very active community, even the co-founder Justin Sun is pretty active over media and crypto pages. Tron is mostly in the news for positive news and developments. All these factors plus high volatility can make Tron one of the most favorable cryptocurrencies for a regular day trader. Popular crypto exchanges support Tron, too. This is one of the best cryptocurrencies for intraday trading.
Click here to trade Tron
#5 True USD (TUSD)
TrueUSD is a stable coin, which can be bought and sold on the same day itself, as its value is bound to fluctuate by several cents. You can buy TUSD to trade other cryptocurrencies, so as to not incur losses. TrueUSD is gaining more attention nowadays after the Tether and Bitfinex scam happened a few days back. True USD makes one of the most viable options for the day traders.
How do you choose a trading pair? When choosing a pair, it’s important to evaluate all of the factors involved in your potential trade. However, the first step is, of course, checking to make sure that the exchange that you want to trade on will allow you to use that specific base currency, as they all have specific options available.
You can easily find this out by visiting the exchange in question and then viewing their market listings. When selecting an asset, you should see something that will denote the other currency that makes up the equation. If we were trading Bitcoin Cash for example, and the coupled currency was Bitcoin, then it would likely be displayed as BCH/BTC to denote the pair.
The number of pairs that your exchange provides will vary greatly with the platform, but most of them will have at least three of the more popular options. Typically they will allow all of their assets to trade for every one of these markets.
While some cryptocurrency exchanges do allow you to make your initial cryptocurrency purchase with fiat currencies, many of them do not. That means you may have to utilize something like CoinBase to make your initial purchase of a base currency, and then you’ll use that to buy an altcoin such as Neo or EOS. That means it’ll be important to identify that correct base currency that you’ll need before proceeding.When choosing a pair, it’s important to evaluate all of the factors involved in your potential trade. However, the first step is, of course, checking to make sure that the exchange that you want to trade on will allow you to use that specific base currency, as they all have specific options available.
You can easily find this out by visiting the exchange in question and then viewing their market listings. When selecting an asset, you should see something that will denote the other currency that makes up the equation. If we were trading Bitcoin Cash for example, and the coupled currency was Bitcoin, then it would likely be displayed as BCH/BTC to denote the pair.
The number of pairs that your exchange provides will vary greatly with the platform, but most of them will have at least three of the more popular options. Typically they will allow all of their assets to trade for every one of these markets.
While some cryptocurrency exchanges do allow you to make your initial cryptocurrency purchase with fiat currencies, many of them do not. That means you may have to utilize something like CoinBase to make your initial purchase of a base currency, and then you’ll use that to buy an altcoin such as Neo or EOS. That means it’ll be important to identify the correct base currency that you’ll need before proceeding.
How does liquidity affect pairings? When choosing a base currency it’s important to evaluate the liquidity that is available for that market. While it may sound like a great idea to trade Litecoin for your new assets instead of Bitcoin, due to lower transaction fees and quicker settlements, you should keep in mind that you could end up overpaying for your purchases this way. Oftentimes these secondary markets will have much less activity than the main pair does. The market will typically react to this by upping the pricing since there are not as many assets to go around in this market as there would be for a more popular pairing. If you’re not careful, you could end up paying a good deal over the real market price by utilizing an alternative base coin. This could quickly eat up any of the savings you may have gained in fees. Remember to check other exchanges through before giving up hope on trading with your chosen pairing. Just because one exchange has an order book that’s on the light side that doesn’t mean that all of them will. You can usually utilize a cryptocurrency market aggregator tool to quickly see not only which pairings are available for the coin or token you want to buy, but also the exchanges that offer them and their trading volumes. This will allow you to quickly identify where and how to make your trades quickly and for an attractive price. This is particularly useful if you plan to trade for a more obscure asset with a lower trading volume.
Is there any reason to choose one pairing over another? Choosing a certain currency to trade against is partly personal preference. However, you could gain a couple of other advantages. As we discussed in the previous section, the prices for one market could be quite different than those in other markets. If you were wanting to sell a particular asset for a certain altcoin, it’s possible you could squeeze out some more profit if you were willing to wait for a trade. Others may simply wish to try to scoop profits out of another market that holds less competition. Many ultimately choose other cryptocurrencies as pairs for lower fees and speedier transactions though. Whether or not you choose to utilize any alternate base currencies is up to you, and you’ll need to weigh the benefits to decide whether or not they make sense in your situation.
What are the most popular base currencies?
While base currencies can vary quite a bit, there are a few tried and true ones that always seem to be around for you to utilize. They tend to have their own advantages or disadvantages, and it will be up to you to decide which one is the best for your particular situation. If you end up with the wrong one, most exchanges will allow you to swap major currencies anyway to put yourself into a better buying position.
Bitcoin
By far the most popular pairing and almost every asset can be exchanged for this currency. The only problem with using Bitcoin is that the fees can be high, and the transactions can be annoyingly slow if you’re trying to move some money around quickly. Perhaps you are not surprised to see Bitcoin on our list. More than a decade since it was launched, Bitcoin is still one of the most influential cryptocurrencies across the globe.
As a matter of fact, Bitcoin - one of the top cryptos to trade with a large market cap and trading volume - is often referred to as the king of cryptocurrencies.
As Bitcoin is marked by high liquidity, trading BTC is a great option even for beginners. Despite the ongoing pandemic, according to top experts, investing in Bitcoin is still one of the best cryptocurrency trading options.
On top of that, as bitcoins are capped, they are highly tempting. Note that only 21 million bitcoins can ever exist. There are more than 18,657,175 BTC already mined, and more than 900 BTC being mined per day. Though these numbers change every 10 minutes when new blocks are added, it’s expected that the last bitcoin will be mined around 2140.
However, if you want the most versatile base currency, then this is your best bet. Be aware that when withdrawing, exchanges will likely charge the highest fees for this coin.
Ethereum
Likely the second most popular base trading pair, Ethereum is also very versatile. For the few tokens which are not tradable for Bitcoin, they are typically exchangeable for ETH. This is due to the fact that most of these are ERC20 tokens which are built on the Ethereum chain. Perhaps you are not surprised to see Ethereum on our list. Ethereum is the second-largest blockchain platform by market cap after Bitcoin, which makes it one of the top list cryptocurrencies to trade. Unlike Bitcoin, there’s no upper limit supply on Ethereum’s ether, which attracts numerous investors across the globe. We should note that in 2016, Ethereum was divided into Ethereum (ETH coin) and Ethereum Classic (ETC coin), so always make sure you know the abbreviation of the coin you want to trade. The good news is that Ethereum has numerous applications beyond crypto trading. Ethereum supports smart contracts and allows developers to create decentralized apps, which can support commodities trading, businesses, voting, gaming, and interoperability in the sciences. No wonder that the hype around Ethereum is still impressive. In fact, one of the most important and anticipated events is the launch of Ethereum 2.0, which will focus on staking instead of mining. This event can even ensure higher levels of transparency and safety and can attract more crypto traders to invest in Ethereum in 2021 and the years to come.
This currency suffers from a similar problem to Bitcoin though, and if the network is getting congested from things like collecting digital kitties or farming Ether shrimp, then the fees and transaction times can become quite painful.
Litecoin
Litecoin is another very popular pairing, and most exchanges support it. This pairing benefits from having much faster transaction times than the previous entries, and they also offer much lower fees. Despite all the virtual currencies and crypto projects out there, we have to admit that Litecoin is still one of the best cryptos to trade. Litecoin remains a safe crypto trade, one of the top 20 largest cryptocurrencies by market cap. Here we should note that Litecoin is one of the first altcoins or alternatives to Bitcoin; the platform was created in 2011 and still, it continues to grow. Interestingly enough, Litecoin has a supply limit of 84 million coins, or four times more than Bitcoin. As Litecoin also has high liquidity rates, experts believe that this cryptocurrency won’t lose its trading value over the next few years. Note that LTC’s price is $201 with a 24-hour trading volume of $3,808,978,850, as per CoinMarketCap. So do not hesitate to add Litecoin to your portfolio.
Unfortunately for Litecoin, the pairings are almost always in favor of big brother Bitcoin, and that means it can be challenging to trade with LTC without overpaying for your assets. If you want to utilize Litecoin, then you may need some patience to get a good deal.
Dogecoin
Dogecoin will be unusual to you if you don’t use any exchanges that trade low-value coins. However, it’s a solid pairing, and it’s actually very popular on exchanges like Cryptopia that list a huge number of coins in the low-value range.
Using Bitcoin to trade for such low-value assets can be burdensome, and Dogecoin fits the bill nicely. This coin also seems to hold a pretty stable value, and that makes it a favorite for trading.
USDT
While this currency tends to get some flack from enthusiasts, it is the most popular trading pair in its class, regardless of your stance on its management. This is actually a USD pegged cryptocurrency meant to always retain a peg that will equate it to 1 USD worth for each of these tokens. Last but not least, let’s talk about Tether (USDT) - one of the most interesting stablecoins to trade. Note that stablecoins are designed not to be volatile and one Tether coin is nearly equal to one US dollar. The main reason Tether was created was to help big companies speed up transactions and move money around the globe. Though the US dollar is a leading fiat currency, US exchanges may involve a lot of time and regulatory complications, so Tether has simply become more beneficial. And it's the security that makes Tether one of the best cryptos to trade, currently one of the coins with the highest volume to trade, of $105,932,564,211, and a market cap of $38,902,590,366.
This makes them not only valuable as a trading pair but also as a place for investors to stash away some money they don’t want subject to the cryptocurrency roller coaster but still available should a good buy spring up. In fact, Bitcoin, Ethereum, Litecoin, and Tether are among the top base currencies to consider when choosing a crypto trading pair - a fact magnified by the high demand for these currencies. As a result, some of the most popular crypto pairs to trade across different exchanges are BTC/ETH, USDT/BTC, ETH/LTC, LTC/USDT, and BTC/LTC. To decide on a crypto pair, one has to understand not only its profitability regarding other assets but its development over the years. To provide an example, while Bitcoin Cash and Ripple were among the best base currencies to trade in 2018, in 2019 it was EOS and Binance Coin that had the highest trading volumes. Wondering about the best cryptocurrency pairs to trade in 2021? Well, despite the global problems across the world, cryptocurrency trading keeps expanding, with USDT/BTC, EOS/USDT, EOS/LTC, EOS/BTC USDT/XRP, and USDT/ETH being among the top trading pairs with high trading volumes.
Best Cryptocurrency trading tips
I have discussed with the experts of the finance market industry and I come up with some important tips which will help you to get success in Cryptocurrency trading. As there are various Best Cryptocurrencies in the market which avail you to invest the way you like the most. Hence, here are my 6 best Cryptocurrency trading tips to succeed.
Ignore Biased Sources
Firstly, you need to be always cautious because there are lots of fake coins, pump & dumps, schemes and Ponzi’s. Many people who post on websites about fake trading policy, fishing pages, fake information and rumors and hoping for the investor to fall in. Don’t trust on that types of data, trust only on biased sources and make your decisions.
Invest Within Your Means
Don’t invest your personal life policy fund or not the kid’s college tuition fees or paying the mortgage. One must be prepared to lose all the money allocated for the trading. You know the old saying, “Plan for the worst, but hope for the best”? That applies here.
Set Achievable Goals
Digital currency is not a scheme when you get rich in seconds. You can set the goals too big if you are milliners, for the others set the realistic goals like 5%, 10%, 20% and so on; And stick to it.
Learn from Your Mistakes
In the market no one is the expert, no matter how experienced an investor you are, everyone is suffered from the bad time. But when that happens, pick yourself up and get back to that mistakes and try to solve that.
Chart Your Course
Follow the trends of the market over time, and learn how to read and interpret charts such as those offered at Bitcoin Wisdom. Analyze the data in
real-time, don’t make quick decisions on short-time fluctuations. No matter where you have your money invested but always buy and sell based on long-term data.
Don’t Panic
Take the time to sit back, research the most popular companies in the industry and study what’s going on in the market, and don’t make snap decisions.
Top 9 Most Valuable Cryptocurrencies To Trade:
Monero (XMR)
Ripple (XRP)
Stellar
Bitcoin (BTC)
Ethereum (ETH)
EOS
Litecoin (LTC)
Binance (BNB)
Basic Attention Token (BAT)
How to trade crypto pairs successfully?
While fundamental and technical analysis play a crucial role in crypto trading success, to trade crypto pairs successfully one has to invest in trading education, practice, and discipline. Experts advise diversifying your investments to reduce risks and to trade only what you can afford to lose.
Always do your research and learn to spot scams. Look at the long picture when you have medium and long-term holds, and set stop losses for your short-term holds – always paying close attention to Bitcoin. Never invest out of fear of missing out or greed, and don’t let mistakes and losses discourage you on your way to success.
Crypto Trading Mistakes
Chasing pump and dump schemes
Pump and dump is a scheme that boosts the price through recommendations based on false, misleading or greatly exaggerated statements. So, it's better to not fall in these traps.
Not diversifying your portfolio to protect your investment
The most effective strategy for minimizing risk is diversification. A well-diversified portfolio consists of different types of securities from diverse industries, with varying degrees of risk. While diversification can’t guarantee against a loss, it is the most important component to helping you reach your long-range financial goals, while minimizing your risk.
FOMO
Never let FOMO ( Fear Of Missing Out ) control your emotions. Try to feel and think logically to shatter the dreams of high returns. When you notice the market going up, try to avoid feeling like investing in the hopes of it going higher.
Not protecting your accounts with 2-factor authentication
Two-factor authentication, or 2FA, adds an extra layer of security to your account.
When logging into your account, in addition to your email and password you'll enter a code generated by an authentication app on your smartphone. This secures the account.
Falling for phishing scams and email account scams or airdrop scams
Falling for an email scam is something that can happen to anyone. It’s a frightening concept and one that frequently results in undiluted panic. Also known as a phishing scam, it involves using email and fraudulent websites to steal sensitive information such as passwords, credit card numbers, account data, addresses, and more.
With the increasing popularity of cryptocurrency airdrops, it is no surprise that there are also many scams out there.
Losing your private keys
This may be the greatest mistake in the crypto community to date. Losing private keys will waste all your money as you can’t do anything if you have forgotten the password. These are the cryptocurrencies tricks which should help you become an informed investor. It will save you from making whimsical decisions. At the same time, never ever dare to commit any of the crypto mistakes mentioned above, especially the last point.
Frequently Asked Questions (FAQ)
How do you trade in cryptocurrency?
You can trade in more than 300 cryptocurrencies here.How to pick crypto for day trading?
You have to do a lot of research and analysis before picking or investing ant cryptocurrencies.Can you make money in Bitcoin trading?
Yes, you can, some of the investors turned into millionaires after making wise trading decisions.