First, too many investors have been fooled by fake exchanges. Second, without knowing where the exchange is based, you won’t have a good sense of the legal ramifications of your investments. For safety, most traders should use a centralized exchange. Fourth, many centralized exchanges carry crime insurance, use banks and custodians to store client funds and cryptocurrency private keys, and are regularly audited. Third, should your account get hacked, it is much easier to address these issues with the exchange and any regulators that may need to be involved if you have a physical address for the exchange itself.
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Learn about the fees and consider how they would impact your investing based on your style. Make daily transactions? If so, perhaps consider an exchange with a lower per-transaction fee. Additionally, you should be aware of the blockchain transaction fees you’ll need to pay that are paid to blockchain participants for work done on the chain. Do you plan to be highly active. Another important consideration is the cryptocurrency pairs that an exchange offers.
Mt. Gox, one of the earliest digital currency exchanges and once one of the most popular, collapsed after a hack. Others have also been hacked or otherwise compromised; even exchange owners. If the address is not readily available on its website, you should investigate further. Executives have been caught stealing clients’ funds (FTX). In the U.S., you can start by checking for the exchange’s physical address. How can one ensure that a particular cryptocurrency exchange offers a legitimate service?
Compare to scalping, you still use stop losses and adjust your positions, but you’re aiming for slightly more profit on each trade. Intraday trading is a type of day trading that allows traders to hold positions for more than one day. Plus, you’re usually more okay with market fluctuations and might let some trades ride longer. While scalping could be considered a form of day trading, they’re often seen as two different approaches.