"Choosing the wrong trading platform could cost you more than just high fees" - this is a lesson Jacob learned the hard way when he chose an unreliable platform and lost 30% of his investments in a cyber breach... I know many people who lost all their money on the platform due to its bankruptcy even though it was a reputable platform. How do you avoid his fate and choose the right platform for your journey in the crypto world?
Before we start, keep this golden rule in your mind... You don't own the coins as long as you don't own the keys.
Once you're done trading, transfer your coins to your wallet and do not keep them on any platform, no matter how trustworthy.
Trading platforms are the digital gateways that allow you to buy, sell, and exchange cryptocurrencies. Think of them like traditional exchanges, but instead of stocks and bonds, you're trading Bitcoin, Ethereum, and thousands of other digital currencies... or more simply, think of it as a market where people showcase their goods and buy and sell.
There are three main types of trading platforms:
Centralized exchanges (CEX): Like Binance and Coinbase, act as intermediaries between buyers and sellers. They are user-friendly, provide high liquidity, but require registration and identity verification (KYC).
Decentralized exchanges (DEX): Like Uniswap and SushiSwap, operate directly on the blockchain without intermediaries. They offer greater privacy and full control over your assets, but they may be more complex for beginners.
P2P platforms: Like LocalBitcoins, connect buyers and sellers directly. Useful in areas with regulatory constraints, but they may be less secure.
Robert Kiyosaki says: "The smart investor does not make big decisions based on small information." Before choosing a platform, look for:
*Security: The platform's history with hacks, the existence of insurance on *assets, and security measures like two-factor authentication.
*Fees: Deposit, withdrawal, and trading fees. The *spreads accumulate over time.
*Available currencies: Make sure the platform supports the currencies you are interested in.
*Liquidity: The daily trading volume affects the speed of trade execution and price slippage.
*User interface: Especially for beginners, a simple and intuitive platform reduces costly trading errors.
*Customer service: It may not seem important until you face an issue related to your money.
Use a smart strategy: "Start with a small amount on a new platform, and test the deposit, trading, and withdrawal processes before moving large amounts."
Remember that the best platform varies based on your needs. An active trader might prefer a platform with an advanced interface and low fees, while a long-term investor might favor a simple and secure platform.
As Warren Buffett says: "Risk comes from not knowing what you're doing." Before you start trading, familiarize yourself with the platform, read the terms and conditions, and start with small amounts.
And finally, remember the golden rule in the crypto world: "It's not your coins if you don't own the keys." Don't leave large amounts on exchanges for extended periods. Once you're done trading, transfer your coins to a secure private wallet.
In the next post, we will learn about the basic terms in the crypto world. Are you ready to master the language of the financial future?