7 Essential Things to Consider When Looking for an Exchange

October 25, 2020
7 Essential Things to Consider When Looking for an Exchange - Pinnacle Weekly

To make a successful digital currency trade, you need to make sure you choose the right cryptocurrency exchange. And choosing the right cryptocurrency exchange is the most important thing to do for an investor. If you choose the wrong platform, this could lead to a potential risk of hacking and other illegal acts. When choosing the right exchange, you should know what you are looking for. You need to sort out your goal while investing. For instance, are you investing for longer-term or shorter? How will the market value affect you?

Even though choosing an exchange before investing isn’t a tough thing to do, there are a few things you should keep in mind while you are looking for one.  An investor would typically look for spot exchanges. These exchanges are platforms that are used to buy and sell digital assets. Traders are mostly interested in derivatives. Derivatives are trading products that are based on the price action of underlying spot assets.

Okay, so won’t make you confused here. Let’s talk about the things you need to and should consider while looking for an exchange. Speaking of looking for an exchange, have you tried Wallets World? If you haven’t, then we suggest you read Wallets World reviews and articles to understand it better.

1. Know the Practices

It is imperative to understand the rules and regulations of your area and location before you consider an exchange. Australian law doesn’t permit everything as much as US law does, so if you reside from Australia, keep this in mind. With that said, some exchanges include Know Your Customer (KYC) and Anti-Money Laundering aka AML practices. Establishing such practices means a secure way of trading. The participants are required to submit their personal information during account creation. The practices and requirements vary from exchange to exchange. Some platforms need the practices to withdraw funds or dispersing limitations that may prevent your account making the process feel like a bumpy road. You, as a customer, will need to provide copies of a photo ID and sometimes proof. Other platforms can do with customer verification during the account activation. It is rather unfortunate that some exchanges now ban customers from certain countries.

2. Security

Every exchange has its own methods of security. Therefore, if one exchange offers a particular type of security that doesn’t mean that some others will do it. It will help if you check to see if the exchange offers two-factor authentication security which can be beneficial for account holders. The two-factor authentication ensures the standard security to the account holders. Any exchange without this may not be acceptable by security standards at present. So, this is something you need to make sure you are okay with. After all, you don’t want to get your account’s security compromised. Check what type of two-factor authentication or 2FA is compatible with the exchange. Google authenticator is a great one, but if the exchange doesn’t have that you can look for Authy or Yubikey as well. These three provide safer and better security than mobile-based ones. Each exchange also has various security measures, for example, custodial storage service or cold storage asset reserves, etc.

3. Insurance Fund

This might come across as a trivial thing, but it actually isn’t. As a user, you can check if your desired exchange consists of an insurance fund. Insurance funds can be handy when you need compensation for specific situations or cases. Also, look for exchanges that are covered under the Federal Deposit Insurance Corporation (FDIC) if you are in the U.S. Getting an exchange with insurance funds can benefit you in the future if not today. So, don’t just let it slip if you have an insurance funding opportunity.

4. Leverage Trading

As we have talked earlier about derivative exchanges, it has one use to the traders. They offer leverage trading, which allows traders to borrow funds of an amount of their choice for their trades, this helps them to hold an exchange based on the number of funds they borrowed. Leverage may be significant for traders who are looking for entering in a trade for a shorter duration. Exchanges can offer from 1 to 100x leverage depending on the rules regarding liquidation level and margin calls of these platforms.

5. Fiat Exchange

Traders and investors all require a fiat compatible exchange at some point in the trading. Having a fiat exchange will allow them to transfer currencies like AUD, USD, etc. into the cryptocurrency market for trading usage. The fiat exchange can also help cash out the profits. Some exchanges offer various levels of fiat options that are compatible with specific banks while some exchanges do not. It is always advised to check the exchanges and has an idea which banks are compatible with the exchange of your interest.

6. Prices

Asset prices are interchangeable and vary across multiple exchange channels. Prices also depend on which locations you are based on, volume and other factors. The digital assets might trade higher or lower based on the location of the exchange as well. In terms of altcoins, these few things can make significant differences while you are choosing an exchange.

7. Fees

Keeping tabs on which exchange charges how much can help you cut down the initial cost. Although most exchanges offer a small fee for the trade, it’s always better to do your research before you partner up with an exchange. The fees vary based on the platforms and the percentage of each trade. Some exchanges also have withdrawal fees and limits.

Which Exchange to Pick and Why?

There are plenty of exchanges out there but what one exchange stood out the best from the rest is WalletsWorld. Most writers and cryptocurrency analysts praised the exchange in Wallets World reviews. Wallets World charges less fee and has greater security services.

The reviewers liked the fact that there are no different package based accounts for individuals. It offers only one type of package for every account holder. This way it’s fair for the novice as well as the experts. You don’t feel left out with services that others are enjoying. Also, the account opening and funding are two things made easier with Wallets World. You need to give your email and create a password. The officials will send you a confirmation email with a link in it. You need to click the link to verify. After that, what you need is showing some documents that prove your account is authentic. And you are all done! Easy-peasy!

The second thing that the reviewers raved in the Wallets world review was that the exchange has a lot of educational tools. These educational tools are always getting updated and have expert guidance for new investors. The educational tools include video tutorials and charts.

They also praised the website. The website is user friendly and immersive. They contain all the useful information needed for a trader or an investor to work. And because the website is mobile optimised, this means that users can trade anywhere using their mobiles.

Last but not least is their customer support. If you have questions, you can shoot a direct message on their live chats. They are present 24/7 to assist with any help. You can even call the centre and talk to the agents if you need an urgent solution. Another way is to send an email to their email address; they usually get back to you in 24 hours. Consider the channels of communications the potentials are endless.

Conclusion

Now that you know all the things you need to consider before opening an account in exchange, you can take all the time to figure out which exchange should be perfect for you. If you are still feeling indecisive, you should go with Wallets World. But be sure to study it to gather information. That way, it would help you understand the exchange better.


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