HOW TO TRADE CRYPTOCURRENCIES FROM SENEGAL
Crypto markets are open 24/7; many people say they are the game-changer in finance. However, when you hear blockchain, Decentralized Finance, crypto derivatives, you feel it sounds like martian language. It can be confusing at first. However, being introduced to the crypto world shouldn't be a puzzle. In this article, we will illustrate:
1. How to start trading cryptos from Senegal, a step to step guide for beginners.
2. What you need to know about the most popular cryptocurrencies, pros and cons.
3. A list of tips for trading cryptos.
If you are rushed to start, or you already know how cryptocurrencies work, you may want to go ahead and pick one of the 4 platforms displayed below. They are some of the top apps available to local investors. But, if you want to know about the basics of the crypto market, keep on reading. Let's start.
Top Crypto Trading Apps available to residents in Senegal
Two (Different) types of ways to buy Crypto
There are two ways of investing in cryptos. On the one hand, you can acquire the token with a wallet. On the other hand, you can invest in it through CFDs, which are financial derivatives.
The main difference between these options is that in the first case, cryptocurrency ownership is effective. In the second case, you do not own it. You are instead using financial derivatives to speculate on the price variation in the short term. If you just want to profit with cryptos, perhaps the second option is the best one, if you just want to buy and hold, try a wallet instead.
Therefore, analyze the differences between the available trading platforms and choose the one that best fits your trading objective by analyzing the commissions and security that each one of them provides.
Examples of Crypto Wallets: Binance, Coinbase, Bittrex
Examples of Derivative Trading platforms: Stormgain, eToro, AvaTrade
How to Invest in Cryptocurrencies from Senegal in 5 steps
In the case that you have already decided upon which cryptocurrency you will buy but are unsure of how to do it, the following is a summary with five steps:
Open a Trading Account. Register with an App that will allow you to buy cryptos. These platforms are called Crypto Platforms or Trading Apps, among many other names. They are neither more nor less than intermediaries between buyers and sellers.
Upload an ID or Passport. Opening an online account requires uploading a few personal documents through their App.
Once the App approves and opens your trading account, it's time to deposit cash or cryptos if you already hold some. The depositing and withdrawing money methods are usually Credit Cards, Bank Transfers or eWallets (PayPal, PaySafe, Skrill, SafetyPay, Neteller, among many others). The available options will depend on each platform. You can open a Demo account, try the platform, and then decide whether to deposit money or not.
Choose the right moment to buy the Crypto you will trade, open the App, look for the cryptocurrency you want to acquire, select the amount, and click on "Buy".
Ready! Once the transaction completes, the App will display your holding in your account's main view. In addition, you will see the price and holding value's fluctuation.
Top Cryptocurrencies by Market Cap
When you're just starting in the world of cryptocurrency, you might feel intimidated. There are dozens of different cryptocurrencies to choose from. We listed below the top 5 (+ 1) tokens by market capitalization (the total value in circulation, calculated by multiplying the total number of coins by market price).
Although Bitcoin is still the first and largest digital currency, Bitcoin's success paved the way for the rest. Following, we brief the details of the five so-called major Cryptos coins (with the highest market capitalization) and one extra piece of cake:
Bitcoin (BTC): The first and largest decentralized cryptocurrency. Bitcoin is the first cryptocurrency; it is the most traded one with the highest market value. Its native unit of account serves to transfer value, so it is classified as a digital currency.
Ethereum (ETH): One of the smartest cryptocurrencies in terms of the blockchain technology it uses. Ether allows containing smart contracts between peers based on blockchain technology. In plain English: Any developer can create and publish distributed applications that perform P2P transactions.
Cardano (ADA): Cardano is an open-source project with smart contract functionality. It seeks to run financial apps and provide users with greater flexibility than other blockchain protocols through a layered architecture. Cardano aims to achieve a "style of regulated computing that guarantees greater financial inclusion, providing free access to fair financial services for all.
Solana (SOL): Solana is one of Ethereum's most formidable rivals. Solana was developed for Decentralized finance (DeFi), decentralized apps (DApps), and smart contracts, the evolution of the blockchain industry. Currently, Solana's most convincing features are its programmer-friendly compatibility with the simple-to-code. As a result, Solana is also a strong candidate to become one of the most popular blockchain-based gaming networks. However, as the new network grapples with rapid expansion, price volatility, and bots, it has seen significant outages recently.
Ripple (XRP): Designed as a P2P interbank transfer method, it is one of the Cryptos that are not based on Bitcoin. Ripple is a project based on free software that pursues developing a credit system based on the end-to-end paradigm. Each Ripple node functions as a local exchange platform so that the entire system forms a decentralized mutual bank. Several front-line banks have started using XRP to improve international currency transfers.
Litecoin (LTC): One of the first cryptocurrencies to use Scrypt as an algorithm. Litecoin is a Cryptocurrency supported by its P2P network and an open-source software project published by an MIT (Massachusetts Institute of Technology) license, which provides an extra layer of credibility.
This ranking changes constantly, do not take it as the current info. Check the crypto rank on any of the top platforms that we displayed before.
What is the minimum amount to buy and trade Cryptocurrencies?
Many people ask about the minimum amount to invest in Cryptocurrencies. The answer is that it does not require a large amount of capital to start.
When you are just starting and hear that the price of Bitcoin soars through the roof, you might be compelled to think that the minimum to invest is the equivalent of one Bitcoin: in other words, $ 40,000 to $50,000. However, that claim is wrong: With Crypto platforms, you may buy a fraction of a coin, for example, 0.0001 Bitcoins (a few Dollars).
A display of Binance's Trading App, the number one in terms of daily transactions and user base.
Is Crypto trading a safe investment?
Cryptocurrency, like any other investment, has risks and benefits. However, in particular, trading cryptocurrencies is one of the riskier activities in the financial world.
Cryptocurrencies are global, which means they have the same worth in all countries and are not subject to exchange rates.
Investing in cryptocurrency assets seems to have the potential to be incredibly lucrative.
The growing rate of adoption indicates that the sector is maturing.
Cryptocurrencies are risky since they are highly volatile and vulnerable to runs and market collapses.
Authorities may potentially tackle the whole crypto business, particularly if countries consider cryptocurrency a danger rather than a cutting-edge technology. Examples of this can be found worldwide.
Cryptocurrency exchanges are more vulnerable to hacking than stock exchanges.
How can I spend my cryptos in the real world?
Although highly popular, cryptos may now be spent in a broad range of online and offline venues still. While not many establishments accept them, the adoption as a money transfer mechanism is growing each year, which will push more businesses to allow them. For example, think about Tesla's proposal to enable payment in cryptos for their EVs.
You can use it to top up your Microsoft account, buy gift cards online for retailers like Amazon, or even pay for your Starbuck's coffee.
Still, you can always withdraw your money: Just convert your Bitcoin holding to cash at a Bitcoin ATM or through a Bitcoin exchange.
Tips for New Crypto Traders
People who are successful in buying and selling Cryptocurrencies use security measures to increase the probability of making a profit when trading. These revolve around minimizing the trading platforms' commissions and operating expenses. However, other trading good practices are a mere matter of attitude, self-control, and common sense. Following are some essential tips for trading cryptos.
Use Stop Loss Orders: Rule # 1: Use Stop Loss orders. Rule # 2: Use Stop Loss orders. Rule # 3: Use Stop Loss orders. This is the best recommendation that any Crypto investor can get, which means that you should limit the potential to lose money using this type of order.
Get started with the DEMO Platform: Use a DEMO platform, which most of the trading platforms offer.
Learn about the cryptocurrency you want to buy and trade and how and why its price fluctuates: Understand trading transactions, learn, study both the basic concepts of Blockchain and Cryptocurrencies; in other words, do not start investing without knowing what you are about to invest in.
Analyze the price swings: Carry out your analysis. Some of your acquaintances will tell you about the amount of money they have made buying Bitcoins (or investing in any other financial instrument). However, if a trader made money once, it does not imply that repeating the past performance is possible.
Develop your Investment Strategy: For example, when will you open a buy order? When to close it? Design a scenario chart, invest based on it, and adjust it as the strategy gets tested.
Do not Run After the Money: It is essential to make sure you do not close (or open) your trades early. Staying put with your investment strategy is critical. When investors let their emotions take over their trading activity, they usually make a profit or a loss slightly higher than the costs per transaction. Trading frequently in this way, a method also known as scalping, will tend to lead to a loss of your total performance. At the opposite extreme, swing trading attempts to profit in a market over a period that ranges from one overnight hold to several weeks, which minimizes the number of times you pay the spread.
Leverage in Cryptocurrencies Should Work For You: Using a higher level of leverage allows the investor to invest more than the actual cash deposit. So leverage is an exciting capacity that platforms provide. Yet, the investor must take it responsibly because leverage multiplies profits and losses and might result in losing your account's total balance.
There will be 'Not so happy' days: When a person starts trading financial instruments, there will be days when making money will seem easy. However, the important thing is to keep in mind that there will be days when the investment strategy will not work, and you will lose money. Therefore, it is necessary to maintain capital in the account to sustain your trades over time. Never trade cryptos with the cash you need and whether you can afford to take a high risk of losing money.
Choose an App that explicitly specifies the transaction costs: Consider the expenses and costs of overnight financing, as well as the spread when choosing a provider. Some trading apps sing their praises about tight spreads, but they charge incredibly high overnight financing commissions, for example.
Choose a Crypto App that offers you a proper trading execution: By 'trading execution', we mean the time spent between the moment that you click on "Buy" and the moment where your order is executed. From an investing point of view, a poor trading execution is equivalent, economically, to an additional commission. For example, suppose your trading app offers low commissions but cannot fill your order fast and securely. In that case, you should consider choosing another one.
Choose a trading style that reduces the costs you pay: No need to explain further, right?
Be disciplined: When you want to carry out a trade, you must be clear on: Why are you opening a position? What level of profit do you expect to get? (be realistic) And most importantly: When will you accept the losses if the coin's price goes the other way (Remember Tip # 1)?