Crypto trading is not for everyone. It requires a solid understanding of how to manage an investment portfolio, which means you must be able to make smart decisions about where to place trades and how much money to invest. You also need a platform that can meet your individual needs as a trader. That’s why it’s essential to understand what makes one crypto trading platform better than another before you start investing in cryptocurrencies. Here are some factors you should consider when choosing a crypto trading platform:
Table of Contents
Liquidity
Liquidity is the ability to buy and sell an asset without affecting the price. For example, when you want to buy a stock on the market, you can expect it will not be difficult (or at least not significantly) to find someone willing to trade with you. However, pricing could be affected if there were a sudden spike in demand for that particular stock. This is what traders mean when they say liquidity; it means that enough people are buying and selling an asset so that they do not have difficulty trading with each other at all times of day or night.
The best way to measure liquidity is through volume: how many dollars worth of crypto did someone trade yesterday? The more times someone has changed their cryptocurrency into cash (or vice versa), the more liquid they are considered to be. You want to find an exchange with ample liquidity so you can always get out of your positions when needed. FTX is an excellent option for this because they are backed by one of the largest liquidity providers in the crypto space. The FTX liquidity engine is powerful enough to get traders out of unsalvageable positions and minimize socialized losses for the platform. As a trader, you want to be sure you can quickly cash out when the market is in your favor, so find a highly liquid exchange.
Fees
Compare pricing and fees between crypto trading platforms. Some platforms charge lower fees than others, and some may have higher costs for specific cryptocurrencies or markets. If you have a limit on the amount of money you can spend in a month, this is something to consider before signing up for a service. FTX has some of the lowest fees on the market, with zero withdrawal or deposit fees and competitively low transaction fees for popular cryptos pairs like BTC to USD or ETH to USD. FTX platform users can also benefit from additional fee discounts across the exchange when they hold the native FTX Token coin.
Some platforms also offer buy and sell limits that allow you to set a price floor or ceiling for buying or selling an asset at any given time. This can be useful if you want to minimize risk by setting yourself up as an investor who only wants to buy low and sell high. Still, it depends on how well-regulated your chosen platform is in setting market prices for assets such as cryptocurrencies.
Security
Security is the most crucial factor when choosing a crypto trading platform. As cryptocurrencies become more popular, the number of hacking attempts will only increase—and if your trading platform isn’t secure, you could be in real trouble.
If you’re serious about cryptocurrency trading, you’ll want to take extra steps to ensure your account is as secure as possible. First and foremost: use 2FA (two-factor authentication). 2FA adds an additional layer of protection by requiring both your password and another code sent via email or SMS whenever logging into an account on a new device.
It’s also essential to choose an exchange that utilizes industry-standard encryption protocols to protect its users’ private information from hackers. For example, some exchanges don’t allow withdrawals from certain countries due to a lack of regulatory compliance; others may require extensive verification before allowing access; others may require authentication for every single transaction made through their platforms. Make sure strong security measures are in place before selecting which platform works best for
User-Friendly
You’ll want to ensure that your chosen platform is user-friendly and easy to use. Some platforms are geared towards beginners, while others are better suited for more experienced traders. Others still have mobile apps, while some have none.
Some platforms, like the FTX platform, also offer a large selection of trading tools, like advanced charting software or technical analysis tools—and in-depth tutorials for new users who want help learning how to trade cryptocurrencies effectively.
While it’s true that there are many legitimate cryptocurrency exchanges out there, you should always exercise caution when choosing an exchange, especially if you’re planning on investing a significant amount of money into crypto coins. Ultimately, there’s no right or wrong choice when picking one of these options – they all have pros and cons depending on what’s most important to you as a trader.