Cryptocurrency trading involves studying the cryptocurrency market, analyzing the prices of crypto's, determining entry and exit points on certain coins and all those stuffs kinda like FOREX etc. Now let's go in detail.
Cryptocurrency trading in summary is just about buying a cryptocurrency at a price and selling at a higher price. An instance is when you buy a unit of a cryptocurrency at 100 satoshi and sell at 200 satoshi (0.00000001 BTC = 1 satoshi), that's a cool 100% profit, with that supposing i invested $1000 into that coin when it was at 100 satoshi, it would be worth $2000. That's what we refer to as trading (buying and selling). I remember when i bought Verge (XVG) at 60 satoshi and about 2 weeks later it was worth 1500 satoshi, thats a cool 25x profit in 2 weeks, another is Digibyte (DGB) which i bought at 90 satoshi and later rose up to 700 satoshi 7.77x profit.
The main thing about cryptocurrency trading is knowing when to buy and when to sell your coins. You can't just rush into buying a coin at any time you like, although you can actually make profits this way but isn't having no profits better than losing all your money?.
How do we know when to enter a trade and when to exit ?
With the use of technical indicators such as MACD, RSI, Moving average, CCI etc same as FOREX, a person can determine entry and exit points for a particular cryptocurrency at a point in time. Technical indicators won't be covered here, but at a later time i might write about them. You can still look them up on your favourite search engine if you want to study about them.
I'm going to be providing a source for you to be getting genuine signals (signals is a term used to refer to coins with potential profit).
But a limitation to this source of signal is that it is available on telegram alone. Telegram is a social media for chatting, media sharing etc you get the point.
Telegram.org You can get telegram here and lets move on.
Telegram provides a feature for channels to be created. Channels are similar to facebook pages where the admin broadcasts a message for all the followers to view. I'm sharing some channels that provide free signals which can be traded with as they are called on your exchange.
https://t.me/CryptoExpertSignals
https://t.me/cryptokings25
https://t.me/Crypto_Lions
https://t.me/Twsiyat
https://t.me/cryptotradingworld
https://t.me/kRSsignals
https://t.me/whalescryptoguide
https://t.me/Cryptotguide
https://t.me/Tradingcryptocoach
https://t.me/cryptomadcap
https://t.me/cryptos_fox
The channels listed above give out free signals daily, although there are also premium channels which membership costs some amount of Bitcoin or Ethereum.
There are hundreds of channels that give out free signals and these are few of them. Channels do cross promotions between themselves to increase their members, you can use that opportunity to get into more channels.
A signal would be a coin name that has the potential to rise, then it would be given prices to purchase a unit of the coin usually in Bitcoin then sell prices which is where the profit lies.
Exchanges: What are they ?
But if we are going to be dealing with any coins at the same time, won't we need all the wallets at once ? Well the answer to that question would be yes and no. There are sites generalised as exchanges that have support and market for multiple coins at the same time. An exchange gives you multiple cryptocurrencies wallets just by creating one account. Exchanges like cryptopia support over 550+ coins and each of this wallet is given to every member, so it saves you the time of going to 550 sites to store cryptocurrencies.
I would advise beginners and experts to start out with Binance and Cryptopia as their main exchange for a large number of reasons.
Why Cryptopia?
- Cryptopia has one of the largest coin support for any exchange supporting over 550 coins at once.
- It also supports anonymous trading, where your real identity is not needed to start trading unlike exchanges like Bittrex, Poloniex where you have to verify your identity before you do.
- It has a daily limit of $5000 for level one members (unverified), $50000 for level two members and unlimited for level three members.
- Orders are completed in the blink of an eye. Personally I've experienced multiple times where I pressed the buy/sell button and within milliseconds orders being completed and it reflecting in my account.
- Cryptopia also has a lot of security including cloudflare, Captcha, 2 factor authentication, withdrawal email verification.
- Low trading fee of 0.2%
Join Cryptopia here: Cryptopia Sign-up
Why Binance?
- Binance has one of the largest coin support for any exchange
- It also supports anonymous trading, where your real identity is not needed to start trading unlike exchanges like Bittrex, Poloniex where you have to verify your identity before you do.
- It has a daily limit of 2 BTC for unverified accounts, 100 BTC for verified accounts and unlimited for level three members.
- Orders are completed in the blink of an eye.
- Binance also has a lot of security including Captcha, 2 factor authentication, withdrawal email verification.
- Low trading fee.
Join Binance here: Binance Sign-up
You can also use sites like shapeshift.io to instantly exchange coins from one to another. Shapeshift will require you to send an amount of a coin eg Bitcoin, Litecoin and it send the same value of another Coin to your wallet directly, transactions takes an average of 700 seconds.
Types of trades
#1 Short term trades: These are trades whose targets are met within a week (7 days)
#2 Mid term trades: These are trades whose targets are met within 2 - 3 weeks (14 - 21 days)
#3 Long term trades: These kind of trades lasts a month or 2, sometimes includes holding a coin for a year
TIP #1: Do not do "margin trading" unless you know exactly what that is. Cryptocurrencies are very volatile and you can end up losing all your money in an instance if you aren't careful.
TIP #2: Do not engage in Pump and Dump schemes (P&D). You might think you are well prepared and know it all then engage in a pump and lose all your hard earned money. Isn't it better not to make profits than to lose all your money ?, don't let the thought of how you can expand your portfolio with a pump that can go 10x, what if your portfolio also goes down by 10x ?. The best way to win a Pump is knowing the pumped coin before it is called publicly or you are really fast to place buy and sell orders on your coin as this is a game of luck.