The number of traders starting to try out crypto trading is increasing everyday.
It can be difficult for new cryptotraders to know what they should look for in a trading platform (broker). So, we want to help by showing you what you need from them!
There are quite a number of important things to consider when choosing a trading platform. But there are several key things that you should especially look out for.
Here are our top 5 things you need from crypto trading platforms.
No matter what platform you eventually end up with, security should be the first priority.
Measures such as your trading platform having a financial regulator and your broker having strong security with your money are absolute minimums. You should never put any of your finances in unnecessary risk when it comes to trading.
This starts with your choice of trading platform.
Cryptocurrency exchanges have been targets of financial attacks in the past – many now double as trading platforms. Using a company that has top tier security is an absolute must (one example is cold storage of their crypto assets).
Since cryptocurrencies have come onto the scene, new trading platforms have been created specifically to trade cryptos.
Not all of these have good enough security to provide you with the assurances you should have.
They also may not be regulated by financial authorities that have good standing. Regulators such as the FCA (UK) and SEC (U.S.A) are examples of good regulators – always check who your platform is regulated by!
Most forex brokers now offer crypto trading.
These companies typically have strong security that has been proven resilient. We highly recommend that, at least when starting out, you use these established brokers. They won’t offer as much variety in terms of crypto pairs but that will change with time!
2. Low Trade Fees
Crypto trading platforms need to make money – they are a business after all. They do this by way of applying small fees to every trade you take.
Most use something called the “spread” which is a small fee you incur when taking trades. The spread is the difference between the Ask and Buy price and is most widely used. With crypto trading there are some fee structures that are specific to cryptocurrency which will be explained on your platform’s site.
Currently, trading platforms charge a higher spread on crypto pairs when compared with forex pairs.
This is vital for you to know as it will have an impact on your trade costs and therefore your profitability. Check our complete guide on this to get a clear understanding of it all.
Put time and research into your trading platform of choice. Low trade fees are second only to security when it comes to crypto trading.
The fees also include overnight financing which is a fee for holding trades overnight. The time of when this is charged will differ from platform to platform.
Some crypto-only trading platforms and established brokers have fee structures that are unique to cryptos.
They can actually be quite complicated to figure out. Trading platforms may use vague language when describing the implementation of the fees.
We recommend avoiding these.
When it comes to crypto trading, fee structures are still being tested. You want to avoid fees as much as possible to maximise your profit.
Fortunately, these are in a minority. If anything confuses you with the fees, simply contact their support – it’s a great way to test the quality of their customer support!
Crypto trading is a new space that businesses are still navigating. Fortunately, as crypto trading grows and competition increases, the fees will decrease.
For now, put time into researching which trading platforms give the most competitive trade fees!
3. Charting Software
A big part of your trading is your analysis of the charts.
As such, you need to have access to charting software that you are comfortable using. Every broker and trading platform will offer charting software of some kind.
Not all will be of a high quality though.
Many platforms will have restrictions on the charts. Simple quality of life things will be unavailable: access to all timeframes, customisation of the chart window, indicators available, and a large variety of tools.
These are things that you won’t notice when you start trading. Since you don’t know any better, you don’t seek out or request higher quality charting software.
Inevitably what ends up happening is your quality of analysis will plateau and then decrease.
There are third party companies that provide great charting services.
You can get a free month trial with most of these companies so you don’t need to pay anything to try them out! We use TradingView for our charting but you can also look at other options.
We highly recommend spending some time looking at your charting options.
Too many traders settle for below par charting equipment that restricts the quality and effectiveness of their analysis.
4. High Quality Customer Support
When you sign up with a trading platform, you are putting a lot of your trust in them.
They are taking care of your money!
You are also a valuable customer for them and should be treated as such.
The quality of customer support needs to be at a level you are happy with. Having access to help on most days of the week at all hours is, in our opinion, the absolute minimum you should expect.
If anything goes wrong with your account or you need help with anything, you need to be able to contact them without hassle.
You can very easily test the support by asking them some questions. Chat to them about their crypto offerings and fee structures. You can ask them questions about their trading platform and when they charge overnight fees.
These are things you can probably find on their site, but you can see how knowledgeable the support staff are and how easy it is to get in contact!
A lot of brokers also provide multiple methods of contact: web, phone, email etc. There are some trading platforms that have more thorough customer support offerings though.
Localized support and multilingual support may be requirements for you. If English is not your preferred language, you will want to check out these options.
Whatever support you need, make sure your trading platform of choice has a high standard!
5. Commitment to Cryptos
Last on our list is a trading platform’s commitment to cryptos.
This is less of an issue now than it was, say, 2-3 years ago. However, it is still something to consider when choosing a platform.
There are hundreds of different cryptos in existence today and most are not available to trade. It has only recently been a viable option to day trade cryptos. As such, your platform of choice needs to have a commitment to continue offering cryptos.
This can be hard to get an idea of.
You can see it in their approach toward cryptos. Look at their sites and see how much information they have on crypto trading. Trading platforms have responsibilities to not just provide a place for you to trade.
They should also provide information and knowledge about crypto trading and what they offer in regards to pairs, fees, and future plans to include other cryptocurrency.
Thankfully, we are now at a point where the volume of cryptos being traded means trading platforms will not stop offering cryptos. But what will change are fee structures and crypto pairs on offer.
A commitment to crypto trading means that you will have more options available to you down the road!
That sums up our list of top 5 things you need from cryptocurrency trading platforms! Let us know in the comments below what you would add to our list!