What can you trade in crypto markets?
Trading in cryptocurrency markets comes in two main forms:
Spot
Derivatives
What is the difference?
When you trade ‘spot’ you are exchanging one cryptocurrency asset for another directly. For example, I may give trade 40 of my Ether in exchange for 1 Bitcoin from somebody else. Once the trade is complete, I no longer own the Ether, but I do own 1 Bitcoin.
Spot trading can be performed on any number of large cryptocurrency exchanges including Binance, Kraken & Okex.
When you trade ‘derivatives’ you are exchanging a contract, the value of which is based on the price of the underlying asset. Common forms of derivatives include futures, perpetual swap contracts (a form of futures exclusive to cryptos) & options contracts. Derivatives can be used to mitigate risk and to speculate on future market movements. They can also be traded on margin, which is money borrowed. For this reason, derivatives can be very risky and traders should be well-versed on their complexities before venturing into that marketplace. For more information on derivatives contracts click here.
If you are interested in learning how to start trading, see the section below "How do I start trading"
How to use APEX:E3 to enhance your trading?
At APEX:E3, we’re constantly thinking of ways we can assist everyone from novice traders to seasoned professionals by providing them the tools they need to work effectively.
We aim to help users discover trading opportunities, analyse the market & eventually execute their trades directly from the platform.
Check out the following quick start guides to help you discover trading ideas today!
Beginner Level:
Medium Level:
Advanced Level:
More quick start guides for finding trading opportunities are available here
How do I start trading?
Before delving into the world of cryptocurrency trading, you should make sure that you understand exactly how the process works & how people buy and sell cryptos (to avoid getting taken advantage of by more experienced traders).
Traders buy and sell cryptocurrencies on a centralised exchange. Certain exchanges allow fiat trading (e.g. trading USD for BTC), whereas others require you to purchase some form of crypto directly from them using bank transfer or debit card. However, most exchanges will allow trading of ‘stablecoins’ which act as place holders for their fiat counterparts (e.g. I can exchange $50USD for 50USDT which is ‘U.S Dollar Tether’, a coin tied to the value of the U.S Dollar).
So let’s go through the steps of buying your first (part of a) Bitcoin:
Step 1
Go to a reputable cryptocurrency exchange. In this example, I have used Binance, however there are many to choose from with easy sign-up processes and user interfaces.
Step 2
Click ‘Register’ to begin creating an account.
Follow the steps given, including verifying your email address.
Depending on the exchange you use, you may have to provide personal information for ‘know your customer’ checks. These include sending identification such as driving license, however, this is a perfectly safe process and is simply to comply with local AML regulations.
Step 3
Find the ‘buy crypto with credit/debit card’ option.
Step 4
Purchase your first cryptocurrency.
In this example, I have used USDT as my cryptocurrency of choice, however, there are many coins that can be selected.
Once purchased, your new cryptocurrency should be in the ‘wallet’ section of your account.
[Note: Although secure, your ‘wallet’ on thee exchange is not what is usually being referred to when people speak of ‘cryptocurrency wallets’. These are places to hold your cryptocurrency that only you have the keys to and are independent of any exchange.]
Step 5
Now we are ready to buy some Bitcoin!
Select ‘classic’ under the ‘spot’ dropdown menu.
Step 6
Find the ‘orders’ section of the page.
As shown above, there are two types of order (there are more, but we won’t go into that here): Limit orders & Market orders.
A limit order is set when you are looking to buy/sell a cryptocurrency at a specific price or better.
So for example, if the current price of BTC in USD is $10,000, I may set a limit order at the price $9,900. This order then sits in the orderbook waiting to be filled. When the market experiences selling pressure and somebody is willing to sell at that price, my order will be filled.
A market order will simply take the best available price in the orderbook and complete the trade for you.
Step 7
Place your order. Once filled, you should receive confirmation of your completed trade in the ’24 hour trade history’ at the bottom of the page.
Congratulations, you just made your first trade!