A crypto exchange is a place where users can trade cryptocurrencies. They provide different functions, such as storing and withdrawing funds, placing orders, and checking the status of orders. While anyone can set up an account on most exchanges for free and start trading at any time, you should consider some important factors before choosing an online cryptocurrency exchange:
1) Types of Orders Available
Some exchanges offer just one type of order, while others provide advanced options that support complex trading strategies. If you are a novice trader or an occasional user, standard limit orders may be good enough for your needs, but if you’re an experienced trader looking to execute advanced trades with complex conditions, advanced orders might be better suited for you.
2) Currencies Supported
You should consider which currencies the exchange supports (i.e., what cryptocurrencies you can buy and sell on it), as well as which fiat currencies are accepted (if any). A large number of crypto exchanges only support crypto-to-crypto trading, for example, BTC/ETH or BTC/LTC.
3) Trading Fees
The trading fees for both market and limit orders vary among exchanges. Generally, the higher the transaction volume, the lower the fees you pay for trades. If you want to reduce your fees, consider using a platform that offers low or no fees during off-peak hours.
4) Two Factor Authentication
Two-factor authentication (2FA) is a supplement to your account password that provides an additional layer of security. Two-factor authentication can protect your account by requiring you to verify your identity using something you know (i.e., a password) and something you have (i.e., a mobile phone or a physical token). The benefit of 2FA is that even if your account password is compromised, your funds will still be protected by an additional PIN. A common way of implementing 2FA is to send a code via SMS or email to your registered mobile phone number. When you enter the code on the exchange’s website, it proves that you own the mobile device and allows you to finalize a transaction.