Cryptocurrency trading, just like any other form of trading which involves the exchange of an asset will require that if you want to make a profit, you have to buy low and sell higher. It is the main principle behind any form of trade whether running a mainstream business or a mom&pop kiosk. It is not any different from trading cryptocurrency. And just like most trades, to maximize your chances of making a profit you will have to use tools to analyze the market to ensure you get in at the right time and exit when you need to exit. In this article, we are going to look at the tools of the trade for a successful cryptocurrency trader.
There are several data aggregators in the market but Coinmarketcap is the granddaddy of the bunch. It is the starting point to almost all kinds of analysis in cryptocurrency and has been since its launch in 2013. It started out simply as the place to go when you need to know the price of an asset and the volume figures from most of the markets on which the asset trades but has since grown to offer so much more. Now you can get information about price history, exchange volumes both reported and adjusted, interest rates for different assets available on different lending platforms and mobile updates for the day traders and the active investors. it is not a Jack of all Trades when it comes to research but in the few things that it does, it does them really well.
Tradingview is a web application interface that provides traders with all the tools for effective technical analysis. It is a charting platform. Seeing as there is a great overlap between crypto and traditional stock assets, most traders of the traditional assets have transitioned into Crypto trading. Tradingview caters to all these various traders and therefore provides tools for trading on these different markets. All tools from beginner to advanced level are available. Unlike with Coinmarketcap, Tradingview is not a free tool. Understandably it offers a lot of premium tools. It also adds a social function in which experienced traders can share their insights into trades and allow beginner traders to follow along and copy trades.
A block explorer is a platform that reports on transaction details. For public open networks, exporters are especially useful and offer a lot of information about wallets and transactions. One of the best block explorers in the market at the moment is Blockchair.com which supports up to 9 blockchains. With this block explorer, you can check transaction information, wallet addresses, and data on block generation and the mempool, you can as well check for embedded text in blocks and transactions. A block explorer is important to a trader because you can use it to keep track of your trades, especially when using decentralized exchanges.
In cryptocurrency, you are your own bank and wallets are the way to store your funds. There is a myriad of wallet software in the market with some specifically designed to hold a single coin or a variety of coins and tokens. Wallets are essential to storing gains after successfully trading the markets. There are several types from web wallets and browser extensions to cold wallets such as hardware and paper wallets. The main considerations are convenience and security.
In summary, these are just tools that will enable you to perform your trading activities more easily. Tools will not make you a good trader but they will certainly help you become more effective at your craft. Choosing the right ones especially when starting out is very important.