A decade ago, who would’ve thought that cryptocurrencies will take over the financial world. Today, there are around 7,000 cryptocurrencies listed on CoinMarketCap. The possibility to make a good profit has attracted young and experienced traders alike toward cryptocurrencies.
However, crypto investments are a risky venture due to their high volatility. There are traders who make consistent profits and there are those who lose money, consistently. The deciding factor that separates lucrative investors from the not so lucrative ones is the readiness to make a decision via sufficient knowledge of the market. Therefore, traders need to experiment with different crypto tools that arm them with the proper knowledge to make an informed investment decision.
If you want to know about some of the best tools for trading crypto, you are at the right spot. We have even mentioned a few tools that might take you by surprise. So, let’s get into it.
Best Tools for Trading Crypto - Exchanges
Whether you are a pro or a newbie, a good crypto exchange can make a lot of difference while trading crypto. It can increase your chances of staying ahead of the game. How about we start with some of the best exchanges.
Binance has one of the largest crypto exchanges in terms of trading volume. This also means that it is the most liquid and has the most money transacted on its platform. To add to that, they have the most number of users and have never been breached by hackers. With lots of liquidity, a reliable team, and a clean track record, Binance is one of those exchanges that you must try.
Coinbase Pro has fewer trading pairs as compared to Binance, but it is a trusted exchange, especially by experienced investors. Coinbase Pro is an FDIC-insured exchange and has never been hacked. FDIC offers more security as the US users are insured for up to $250,000 if the exchange gets hacked.
BitMEX is ideal for experienced traders who can take a lot more risk than beginners. This exchange is one of the best tools for crypto trading because it offers up to 100x leverage, meaning high risk, and high reward. Even BitMEX has never been hacked and is a good alternative for spot trading exchanges.
Why does a Good Exchange Matter?
If you, as every trader, want to make a profit, picking a reliable exchange is important. When choosing an exchange, you should look for three aspects: security, liquidity, and fees.
- Security: When you add funds to your account, you are trusting the exchange to keep your funds safe. So, their security has to be extraordinary. This is important because hackers are always looking to breach exchanges and steal funds. Recently, an exchange named Cryptopia got siphoned off millions of dollars. Even though the users got their funds back, losing your funds via an exchange can be bad news.
- Liquidity: Good liquidity translates to the easy buying and selling of an asset. If an exchange has high liquidity, it means buyers and sellers are waiting on the other side of your order request.
- Fees: Traders always look for an exchange that has reasonable trading fees because it can eat into their profits. Therefore, choose an exchange that is not only liquid but also has lower trading fees.
Best Tools for Trading Crypto - Decentralized Exchange
A decentralized exchange is a peer-to-peer marketplace where traders/investors can trade tokens in a non-custodial manner without an intermediary. One of the biggest advantages of using a decentralized exchange is that users don’t have to deposit funds on the exchange. They can use a secure wallet to keep their funds safe. This, certainly, adds greater security while using the exchange, but they are often not user-friendly and have less liquidity.
The Best DEXs
Established in 2018, Uniswap, an automated token exchange, became the first extensively used permissionless DEX. The platform allows you to trade ERC-20 tokens directly through a web 3.0 wallet.
The fact that this platform also supports a wide variety of cryptocurrencies is a massive added advantage as the swaps are not just possible between BTC and ETH or XRP.
The idea of order books is abandoned in favor of an automated market maker by Uniswap. Users choose a source and output token while Uniswap finds the optimal market rate, rather than setting a price to purchase or sell at.
This Ethereum blockchain serves as the foundation for the decentralized margin trading system. You can only exchange ETH, DAI, and USDC with the dYdX platform as it is a margin trading platform.
When it comes to perpetual, there are hundreds of different crypto assets to select from, and you may leverage your trade up to 100x. There is no need for identification verification, unlike with centralized exchanges. Thus, adding a wallet to dYdX may be the simplest approach for consumers to start trading perpetually.
IDEX is a decentralized crypto exchange, which combines the best features of a decentralized and centralized exchange. Because of this, they have a sleek user interface and they have enough liquidity for users to carry out their orders.
Best Tools for Trading Crypto - Trading Platforms
Trading platforms are incredible crypto trading tools because they take crypto trading to the next level. Rather than using various exchanges and having multiple windows open on your browser, you can access multiple exchanges all from one platform. With this, you can monitor the market closely and take advantage of opportunities as they come. The best trading platforms are as follows:
Coinigy is one of the most used trading platforms. It started in 2014 and has been growing consistently ever since. The platform supports more than 45 exchanges, quality customer support, and trading charts. These many exchanges are more than any other trading platform, giving Coinigy a solid advantage over other platforms.
Moreover, the platforms also offer historical data, which is available for fees and can be used by developers to create their own trading strategies.
This trading platform supports both Binance and Bittrex, which are reliable and are among the biggest crypto exchanges in the world. As opposed to Coinigy, a web-based platform, Tradedash is a desktop app. This implies that the users’ private keys are stored on their devices with encryption, adding an extra layer of security and privacy.
Best Tools for Crypto Trading - Charting Tools
A charting tool helps you visualize the market with the help of different trading indicators and trend lines. Practicing with trading indicators and trend lines can enhance your skills in technical analysis (TA). Good TA skills will help you stay ahead of the curve and you can win big. Here are some of the best charting tools:
Tradingview offers live trading charts for both stocks and crypto. This tool has more technical indicators than any other charting tool in the market. Also, they have free and premium subscriptions and a vast majority of expert traders use TradingView as their main charting tool.
Cryptowat.ch makes it easy to keep tabs on the crypto markets. Using Cryptowat.ch is completely free and you can chart across various coins and also visualize more than 10 charts in a single view.
Best Tools for Trading Crypto - Wallets
In the crypto landscape, your wallet serves a bank. A good, reliable wallet means better safety from hackers. If a hacker gets to your private key, they get access to all your funds and you can lose all your money. Also, a wallet with a bad user interface can prompt you to send money to the wrong recipient. Here are some of the best wallets:
Mycelium is one of the best Bitcoin wallets. It is super easy to use and is mobile-only. More importantly, make sure you write down the seed phrase while setting up the wallet.
It is one of the most used Ethereum wallets. What makes Metamask better than other wallets is that it is accessible from a web-based browser such as Chrome or Brave. With Metamask, you can easily send Ether and ERC-20 tokens to dApps on the internet. A lot of dApps also work with the Metamask wallet.
Best Tools for Trading Crypto - Network Statistics
If you don’t believe the negative news articles telling you that Bitcoin’s transactions are deteriorating in numbers and the network asks for a lot of fees, you can check the data yourself. There are crypto tools available in the market that will tell you firsthand how active Bitcoin’s network is. Here are those tools:
BitcoinVisuals allows you to keep up with a lot of Bitcoin-related components. You can easily see the median fees per transaction that the Bitcoin network asks for, the hash rate, see the technical aspects of the network, and more. For instance, if you see that the number of miners is increasing and the costs of the fees are going down, it might be a good chance for you to get yourself some Bitcoin. Also, if you come across a news article that says Bitcoin is tanking, you can go check it out for yourself.
CryptoMiso is a great tool for checking the network statistics for all coins and not just Bitcoin. If a project’s development isn’t making any progress, it might be doomed. You can use CryptoMiso to check the coin’s Github and confirm whether the coin is active or not. While analyzing a coin, it is important to check if open-source projects are active. No activity means the project might be dead.
Best Tools for Trading Crypto - Research Reports
Research reports are usually highly detailed and hence very long, but they are highly valuable as they provide fundamental analysis, past and current, and futures markets, technical analysis, and more. Below is one of the best research reports:
Crypto Research Report
Crypto Research Report publishes a report every quarter, which is very thorough and in-depth. Their team goes through statistical analysis, interviews, fundamental analysis, and the stance the market might take in the future. With this, you can get a good perspective on the market, which might give you an advantage.
Best Tools for Crypto Trading - Crypto Tax Tools
The tax season always comes bearing a lot of work, especially for crypto traders. In this situation, a crypto tax tool can help you organize your transactions and calculate how much tax you have to pay, automatically. Here are a few best tax tools:
An analytics company simplifies cryptocurrency taxes and helps tax professionals and investors in portfolio management. With the ZenLedger crypto tax software, you can automatically calculate your taxes.
Even if you use two or more crypto exchanges, you can easily generate your tax reports because ZenLedger can integrate with more than 500 exchanges. Just select the exchange you want to import the transactions from and the platform will provide the instructions for the specific exchange. Once the transactions are imported, the software will calculate the taxes. Next, review the transactions and then generate your tax reports and file them.
Which One is Your Favorite Tool?
Without the tools mentioned in our guide, trading crypto can be a risky venture. However, if you decide to use these tools, the best way to find out which one works for you is to experiment. These tools give you an advantage and you have to take a hands-on approach to find out which one works for you and create a bulletproof investment strategy.