When you are mining a coin because the difficulty is really low and makes it more profitable, or Staking a coin that gives you a good yield and you can not trade it on your wallet. It is alright to use an exchange just for the purpose of getting the coins in, and quickly getting them out. Here are some guidelines you should keep in mind.

Third Party Exchanges

What you have to realize is you are temporarily giving a custodial site temporary ownership of those coins. This is why it is extremely important to understand the exchange and how they operate. Most of the exchanges do very well, however, there are a few that rip clients off and should be avoided at all costs.

Each specific exchange has a list of coins they trade, and what pairs they trade to. What I use the exchange for is to exchange the coins to the coin I can trade on my wallet when I am ready. This allows me the comfort of exchanging when I want to and, at least, I have full control of how much to send at any given time.

KYC COMPLIANCE

I will never use any exchange that makes it mandatory to become KYC Compliant. The purpose of cryptocurrency is to have all the freedoms you deserve as a human being. When any one collects data from you, it makes it possible to sell that same data and your privacy invaded just as it always was before cryptocurrency.

If an exchange makes it an option to withdraw more that is fine, because you are not forced by taking away your free will to become KYC compliant.

Summery

Exchanges are a great way to trade profitable coins you are unable to exchange within the privacy of your own wallet. You must remember that they are a third party and you should never leave your coins on an exchange for extended periods of time. You should always have full control of your coins.