Thinking of starting crypto trading, then here are some great tips to do so from YuanPay Team, only approved and legalized company in China to trade and sell cryptocurrencies. Read on and learn more.
- Take cybersecurity seriously
It is important to think about online security because it is important when it comes to strong crypto. You need to protect your coins the same way you treat real money in an online bank account. People tend to be careless or lazy with online security.
If you use the same password for every website or easy-to-guess passwords, correct your behavior. Always choose a long password that is hard to guess. It is also a good idea to use a different password for every website you log into. You should also change them a couple of times every year. Your password is very important, always be careful.
- Crypto is not insured
When you have cash in your bank account, you are protected in case the financial institution collapses. When the bank goes under, you are not going to lose your money because the insurance is going to come in. This gives you peace of mind because you don’t have to keep worrying about losing your money.
Crypto is not this way. If the crypto bank or trading platform you are using is hacked or goes belly up, then there is a risk of losing all your money. If you want to minimize the risk, then make sure you keep crypto you are not trading safely stored in a wallet instead of a trading platform.
- Using a Cryptocurrency Wallet
If you want to protect your cryptocurrency, then the best thing to do is storing it in a digital or hardware wallet. It is never a good idea to leave your coins on a trading platform because there are a lot of risks. Hackers can hack and wipe off everything from your account. Your coins need to be in a wallet because they will be a lot safer there.
You have two options, installing a digital wallet on your computer’s hard drive, or purchasing a physical hardware wallet, such as a Ledger device. There is no difference between a hardware wallet and the wallet you carry around in your pocket. Just like with a regular wallet, losing it means you lose the money inside it too. This is why it is important to make sure your wallet is safely stored somewhere, like in a safety deposit box at the bank or a small household safe.
- Transaction Fees
While there are some trading platforms that don’t charge any commission or trading fees when you make trades, there are transaction fees that are charged on transactions.
There is a small transaction fee to pay when you move the coins from your wallet to the trading platform and vice versa. The fee is a small fractional piece of coin for the transfer of crypto between platforms. The fee is not a flat rate and it is going to depend on the size of the transaction and the time of transfer.
There is a fee charged when you move Bitcoin because the transaction is going to be added to the blockchain. This is why it is determined by the amount of crypto you are moving and the market congestion.
You can view the transaction fees like ECN fees (electronic communication network) charged by a brokerage account when trading ETFs. These are those charges you can’t avoid and are part of every transaction. You don’t have to pay more than you have to. This should be enough to discourage you from transferring crypto between your accounts and platforms.
- Coin Conversion Fees
Bitcoin is the top crypto today, but there are other coins out there and you most likely have another coin. Find the best cryptocurrency to buy now. There are some cryptos that can give you a profit apart from Bitcoin. When converting from one crypto to another, there is a currency conversion fee you have to pay. This is the same approach as changing currencies in traditional fiat money.
The conversion fees just like the transaction fees are going to depend on the time you are exchanging the currency and the amount of crypto you are exchanging. There are many trading platforms offering currency exchange for coins, but make sure you keep in mind the transaction fees you have to pay since you are moving the coins. This will help you know the total cost incurred for the conversion.
There are some people who turn to crypto because they want to avoid the downsides of regular money, but there is no way of avoiding income taxes. When you buy bitcoin then sell it at a higher price, it has gained value and the profits are subject to income taxes.
You will be the one keeping track of your trades so you can know how much you have earned or lost by investing there.
Crypto is largely unregulated, and this is why trading platforms don’t issue the tax summary of your account the same way a traditional brokerage does. You have to report that information to the CRA. Always keep track of the amounts deposited to the accounts, and also the trades you are making so you can know how much income taxes you have to pay at the end of the year.
- Don’t misplace your coins
The most common way people lose money in the crypto world is by misplacing the coins.
One in every five bitcoins has been misplaced. There are different ways people lose their Bitcoin; accidentally wiping hard drives with wallets, forgetting pins, or misplacing the hardware that holds Bitcoin. There are some people who have regretted it because they wiped their hard drive with Bitcoin back in 2012 because they didn’t think that bitcoin is going to amount to anything. Even famous people like Elon Musk have misplaced their Bitcoin.
You need to try your best to minimize the number of platforms and wallets you use when managing your crypto. This is the same as having many bank accounts. One or two trading platforms should be enough to store your coins and manage your portfolio. Always make sure you know where the coins are and how you can get to them.
The above tips will go a long way in helping you with crypto trading.