Digital currency trading platforms
A cryptocurrency trading platform is a software that allows you to start trading online on digital assets. It can be used to open, close, and manage market positions through a broker or an online cryptocurrency trading platform. Brokers and online cryptocurrency trading platforms often offer digital assets at a discounted or free price to maintain a funded account and/or execute a certain number of trades each month. The best cryptocurrency trading platforms combine strong features and low fees.
Therefore, a cryptocurrency trading platform allows you to place buy and sell orders for digital assets and track your digital currency portfolio.
The best cryptocurrency trading platforms should also be able to send alerts for assets that may be worth trading, analyze complex option trades, and more. Good cryptocurrency trading platforms also provide streaming news, which can help you get the best cryptocurrency trading opportunities and ensure you get the best prices.
How do the most popular cryptocurrency trading platforms work?
The most popular cryptocurrency trading platforms work as network-based markets that provide users with unlimited functions to place trades, browse digital asset catalogs, and monitor accounts.
Some of the best cryptocurrency trading platforms include advanced research and real-time pricing offers and news summaries. They also provide charting tools to facilitate real-time trading information and technical analysis.
Trading platforms can also be designed for specific markets such as stocks, futures, options, or cryptocurrencies. These best cryptocurrency trading platforms provide more options for managing and executing trades by offering capabilities specific to each market structure.
For the software that powers these platforms, it can be divided into two different types of platforms:
Trading platforms developed through a financial broker.
Trading platforms developed by specialized companies (e.g., MetaTrader platform).
Let's briefly define each of these trading platforms.
Broker-owned platforms work through features specifically designed for that broker. However, if a trader chooses to open an account with an online broker, they may have difficulty getting used to a new platform offered by another broker. This is because these platforms offer features specifically designed for them and may not be available with other brokers.
Most often, online brokers' revenue comes from commissions and fees. They may not have the time or resources to devote to building and customizing high-quality trading platforms.
The second type of trading platforms is created by companies specializing in trading software such as the MetaTrader platform. These trading platforms may appear better and may be easier to use. Brokers may not be able to customize these platforms, and traders may not fully adopt some of their features, but they provide a solid foundation for experienced traders who can easily use these platforms and have the ability to switch from one broker to another, which these unique platforms provide.
Our CFD trading account gives you access to multiple popular cryptocurrency trading platforms:
Online cryptocurrency trading platform
Mobile cryptocurrency trading app
These cryptocurrency trading platforms can be customized to suit your trading style and preferences. This includes custom alerts, interactive charts, pattern recognition, and daily analyst evaluations.
Cryptocurrency trading platforms provided by cryptocurrency exchanges
Cryptocurrency trading platforms provided by cryptocurrency exchanges allow you to buy, hold, and sell digital currencies.
It should be noted that there are two types of cryptocurrency exchanges - centralized and decentralized.
Centralized exchanges (CEXs) work similarly to online brokerage platforms. They provide you with all the tools you need to buy and sell digital currencies and tokens such as Bitcoin, Ethereum, Dogecoin, and Ripple.
Decentralized exchanges (DEXs) do not provide accounts. They operate in a peer-to-peer market type and do not rely on a central en
tity to facilitate trades. To use a DEX, a trader needs to create a digital currency wallet. The wallet owner is also responsible for its security.
Decentralized exchanges (DEXs) are the preferred method for long-term cryptocurrency investors, but they require new users to familiarize themselves with this technology. There is a steep learning curve on how to use these platforms, and they are not responsible for any security breaches, scams, or user errors. There is no customer support for such platforms, so they may not be recommended for beginner cryptocurrency investors.
Using cryptocurrency exchange platforms to buy digital currencies will attract higher fees. Each platform has different fees, and investors should research them before funding their accounts. You should look into the exact fees for deposits, withdrawals, transfers, and cryptocurrency trades. Some of these fees may be in percentage form, while others may be fixed fees. There may also be a minimum amount required for deposits and transfers.
When choosing a cryptocurrency trading platform over a cryptocurrency exchange platform, it is important to consider factors such as supported digital assets, fees, payment options, and security.
Alternatives to cryptocurrency trading platforms - Digital Wallets
A digital wallet is software that is used to store, send, and receive cryptocurrencies. Since it can be used in the same way as a physical wallet you use to hold cash or credit cards, it is called a "wallet."
There are two types of wallets: centralized wallets and decentralized wallets. Centralized wallets are created through cryptocurrency exchange platforms when creating an account. Decentralized wallets allow you to take full responsibility for your keys. When we talk about cryptocurrency wallets, we are referring to decentralized wallets.
There are two types of decentralized wallets - hot and cold wallets. Hot wallets are connected to the internet or any internet-connected device. Cold wallets do not have an internet connection. There are three classifications of these wallets as well: software wallets, hardware wallets, and paper wallets. Each type is either a hot or cold wallet.
Most commonly used digital wallets include the following:
Software Wallets
Hardware Wallets
Paper Wallets
Software wallets can be used on both mobile devices and desktops. These wallets can be installed on a laptop or desktop computer. They allow you to access your digital currency, make payments, view your balance, and perform many other functions. The owner is the only person who owns the keys to the wallet, which must always remain secure. When creating this cryptocurrency wallet, you will receive a unique key that is necessary to access and recover your wallet from any other device. To access your cryptocurrency, you need your private keys. Anyone can access your digital currency if they have your private key. Without this key, your funds will be lost forever, and no one else can help you recover them.
Hardware wallets are popular among traders who want to store and retrieve their private keys through devices. These modern hardware wallets resemble USB drives. Connecting the hardware wallet allows you to perform a digital currency transaction from a computer or other devices. They can sign cryptocurrency transactions without needing to input the key. This increases hackers' ability to access your wallet. Some popular hardware wallets are Trezor and Ledger
Given the lack of active internet connection for these wallets, they are often considered cold wallets. Paper wallets were used by users who wanted to write their keys on paper. These wallets were designed to contain keys and QR codes that can be scanned by mobile wallets. Many digital currency owners no longer use paper wallets as they can be easily lost or damaged. They can still be used but require owners to keep them in a secure place and not lose them.
Modern digital wallets allow access to the blockchain from anywhere. These wallets can support multiple assets on different blockchain networks, but there are cryptocurrency wallets that can be specifically created for a type of asset. Investors should do their own research when choosing their digital wallets.
Using a digital wallet is a good option for long-term investments and for users already familiar with blockchain technology. However, digital wallets do have some limitations for those interested in cryptocurrency trading, such as slower transaction speeds, the possibility of higher fees, and the ability to profit only when prices rise.