Herein lies a step-by-step guide for Crypto Beginners - All your bases covered when trading currencies like Bitcoin.
Cryptocurrency for Beginners!
How to trade bitcoins and altcoins for cash!
If you're new to the game then this guide is for you. You're probably reading this because you heard about bitcoin, and the money your friends are making by having them. If you haven't heard, then don't bother looking for a shilling. This post is strictly here to guide you through the steps cryptocurrency traders use to make big profits off of volatile markets.
Contents
- Cryptocurrency defined
- Trading & patience
- Tips from experience
- Legalities
- Exchanges & Wallets
- Conclusion
Crypto Defined
Cryptocurrencies are assets built on digital ledgers, that record transactions publicly and securely. These ledgers are known as blockchains.
I'm not going to get into the technical details behind blockchains, that you can research in your own time. Right now we're here to learn how to trade the assets tracked on these blockchains, such as Bitcoin, Ethereum, or Steem.
Cryptos can be traded easily on open exchanges for different currencies, such as USD (US Dollar) or AUD (Australian Dollar because I'm in Australia)
BE WARNED:
Trade at your own risk. Responsible traders make better profits than greedy ones. Always know what you're trading before hand. Use sites like this one, Steemit, to learn more about the wonderful world of cryptos, dapps, and blockchain innovation.
Training and Patience
- Using an Exchange
When trading currencies, you need to use an exchange. There are multiple exchanges, each with their pros & cons. Today I am using Poloniex as an example.
Note: Exchanges do not trade every known cryptocurrency available. Some exchanges have limited markets to choose from, and certain assets can only be traded through specific exchanges.
Get familiar with these next two images
- Placing an order
Buy order reference 1.0
As shown in ref 1.0, the Trader is choosing to buy 0.37086 Steem at the price of 0.001 Bitcoin for a total of 0.00037086. The Trader has decided that these are the figures he/she can afford and that it is the right time to purchase some Steem.
- Closing Position
Sell order ref 1.1
In image 1.1, the Trader has decided to sell 0.37 Steem at the price of 0.00082838 Bitcoin for a total of 0.0003065. Just as he/she purchased the Steem earlier, they have now chosen to sell some of that Steem.
The Trader in this instance had a profit & loss of total of 0.00006436
- What to watch
Watch for high trading volumes, stable prices, and good news. If you don't know what those words mean, then I suggest searching their meanings on Investopedia. Always research and plan ahead before placing orders.
The best traders know what they're doing every time they make a move. They watch prices patiently to plan their attack, waiting for the waters to calm before execution. Which brings us to patience.
- Patience
Always remember patience when trading. You're not going to make a million dollars off an impulsive $20 dollar margin call, so plan your move first. If you want good profits then you need to have found something you think is profitable first.
When you first feel like making a trade, look through the catalogue of cryptocurrencies out there. I enjoy using Coin Market Cap. Then, start learning about what they are before purchase, assuming they're in your price range. Don't trade what you can't afford.
Tips from experience
Know what you're buying
Research, research, research.Don't doubt yourself
If you know what you're trading, you've been watching it patiently, and you can afford to make your move, then stick with it and pull out just as planned.Don't get greedy
Don't forget to pull out. You don't want a debt baby.Stay focused
Trade when you're feeling good and focused. If you don't know what the charts are saying, then wait. You can trade 24/7 at any time; no need to rush.
Legalities
Now, I'm not a lawyer but I do know that cryptocurrency regulations vary, depending upon where you reside.
"The legal status of bitcoin varies substantially from country to country and is still undefined or changing in many of them. Whilst the majority of countries do not make the usage of bitcoin itself illegal (with the exceptions of: Bangladesh, Bolivia, Ecuador & Kyrgyzstan), its status as money (or a commodity) varies, with differing regulatory implications. While some countries have explicitly allowed its use and trade, others have banned or restricted it. Likewise, various government agencies, departments, and courts have classified bitcoins differently. While this article provides the legal status of bitcoin, regulations and bans that apply to this cryptocurrency likely extend to similar systems as well."
Wikipedia excerpt
I strongly suggest that you know the legalities, taxes, or penalties, being enforced by your local government bodies. Google your laws before you sign up for a trading account. If you do something wrong, don't say I didn't warn you.
Don't be dumb, like Brick from Anchorman.
Exchanges & Wallets
- Exchanges
Poloniex
Coinbase
Kraken
Australian exchange: BTC Markets
- Wallets
Coinbase
Trezor
Mist
OpenLedger
Ledger Nano S
NOTE: There are many more to choose from. Choose what best suits you.
I use Poloniex, Coinbase, and multiple wallets. Another great tool to use is the Blockfolio application - Use it to track cryptocurrency trading history.
Conclusion
This guide is a very quick & basic jump start to trading cryptocurrencies. I've not included trading terminology, strategies, or analysis techniques. If you would like to view more detailed information about trading, you can view my Forex trading series here, which is identical to trading cryptocurrencies:
Forex How-to - Part 1, 2, 3, 4, 5 (I recommend reading parts 2 & 3).
I've been trading currencies regularly for the past year and I love it. You can make quick or steady profits if you truly know what you're doing. Currently I pay my bills and buy my groceries with crypto profits.
I hope this quick trading guide provides you with some stuff you didn't know before. Post a comment below if you have any further questions.
Oh, and one last thing... If I can write this quick tutorial drunk then you have no excuse for not trading cryptos!
- My Current Crypto Watch List [11-06-17]:
- Steem
- ETH
- Iconomi
- Monaco VISA ICO
- Ripple
- Bitshares
- Monero
Watch for Initial Coin Offerings here
Cyber Fund Radar
State of the DappsDonate BTC here:
12DN5ppUvNdWNDzJsQbd96YL67Q1J26Ybm
Thomas Te Aroha Kohi
Born in New Zealand and now residing in Australia, I write about many different subjects. I like to philosophize about each subject. I'm addicted to knowledge & growing. I try to be original & true in everything I do.