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- Oct 10, 2015
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I have talked to lots of people about cryptocurrencies and trading with it and the general opinion seems to be that they are interested in it but it is quite hard to get into the whole thing which puts most of em off.
That is the reason why im making this into basic beginners tutorial on how to trade cryptocurrencies.
There are a few things to note before we get into it:
- Cryptocurrencies are highly volatile, which means that you might start off with losing 50% of your money and then making 300% the next week.
- due to the high volatility you need to stay calm. this is one of the biggest mistakes beginners make. lets say someone invests in a coin and the next day he sees that his investment dropped by 30%. he panics and sells off everything to invest in something else and 2 days later he sees that he couldve trippled his money if he wouldve just hold the coin. (many people refer to holding as hodl)
- imo there are 2 different trading approaches.
1. the hype-trader: theres lots of talking going on about a specific coin and many people hype it like its the best invention since the fire. you dont read anything about the technical details but invest in the hype.
this might work out but a lot of pump and dumb schemes start the same. people hype a coin to inflate its price after (!) they bought lots of it cheap, wait a few days and then dump all of their coins onto the market for a huge profit. a lot of youtuber for example get paid in a certain coin for promoting it.
2. the vision-trader: the other type of trader is one that reads the whitepaper (technical details of the project) and tries to get lots of information about a coin / project and if he thinks that it is a good project which will have a bright future he invests in it. these are usually long-term holders. their vision needs to become true and this might take a while. now you can invest in coins that seem to have a nice future but are still not well known. this could be very risky but also very rewarding.
my advice would be to mix both of these groups. do your research about the project and check out the community. if you think there is potential, invest in it and hold it for a longer period of time. yes, you could potentially make a lot more money by trying to sell at the daily highs and buy at the daily lows but that takes a lot of knowledge about the way the people trade. this technique is very very risky and should only be done once you know the market good enough. for the average trader just holding a position is by far the better option.
one big indicator for how well a coin is doing is the market cap. the market cap is the value of all coins in circulation accumulated. investing in a coin with a higher market cap is usually less risky than investing in one with a low market cap. i would put it like this:
market cap of less than 1 million USD= extremely risky
market cap of 1 - 100 million USD = very risky
market cap of 100 million - 500 million risky
market cap of 500 million - 15 billion = less risky
market cap bigger than 15 billion = "safe" (no coin is really safe!)
a good site to check out the market caps is: https://coinmarketcap.com/coins/views/all/
Now you just need to know how to trade. First of all i have to note that most good trading places dont offer the possibility to trade in fiat currency (USD, EUR, etc). That means you have to buy at another market place and then transfer the funds to the market place where you want to trade.
So the steps are like this:
1. Create an account at a market place where you can buy with fiat currency. Usually you have to register and verify yourself. Some market places take weeks to verify your account and some only a few days. It also depends on the country you are living in and checking in google for your country and different experiences regarding that exchange might help in deciding which to take.
Examples: Kraken.com (the site works like shit but the fees are cheap and the registration and verification took
less than 48 hours)
changelly.com (pretty big market place but seems to have huge fees)
coinbase.com (also pretty big but i havent used it yet)
you basically only need these sites for either cashing in your fiat currency or cashing out your fiat currency. there are a lot more of these sites but i recommend to first look experiences up before using them. depending on the amount of money you want to invest it might be best to register and verify yourself at several of these exchanges.
2. register at a real exchange / market place. the one i would recommend is binance.com. its a quite new exchange but it is growing like crazy and offers a very good interface, easy and fast trades, real time graphs and supports quite a lot different pairs to trade. but most importantly: the fees are ridicolously low (usually 0,1% but on stuff that is hot (gets traded a lot) its usually just 0,05%).
It would be nice if you could use my referral link if you want to trade there and like my beginners guide:
https://www.binance.com/
on a side note: not every market place supports every coin. especially if you want to trade lesser known coins (risky!!) you might need to sign up at other exchanges like cryptopia or similar.
when you are on coinmarketcap.com and click on a coin you are interested in it gives you the option to check out their website, sometimes directly the whitepaper and when you click on the markets tab (besides the tab charts) you can see how much is traded and on what exchange.
3. Buy a big cryptocurrency on the first exchange with your fiat money and transfer it to your wallet on binance (or the exchange of your choice).
here you need to know that every cryptocurrency has different times until it arrives at your other wallet. bitcoin might take severak hours, etherium might take 15-30 minutes and ripple (XRP) usually takes less than 3 minutes, depending on the traffic.
before you can send your money you need to register the wallet you want to send it to. if you use binance you can go your funds tab in the upper right corner (when using the browser) and click on deposits tab. next you chose the cryptocurrency you want to deposit in (btc, eth, xrp are the ones id use) and click on deposit. it then shows you all the information you need to enter on the market place where you bought it with fiat money.
Always (!) follow the instructions shown on the deposits / withdrawel pages. they usually show what you have to enter. it is very important that you only send the same currency to it. if you try to send bitcoins to an etherium wallet you might lose your bitcoins forever. if you are unsure if it works, just send a minimum amount and wait for confirmation. once your deposit arrived you can send the rest and be safe.
important: before you buy anything, compare the fees of the different cryptos and market places. you dont want to lose lots of money on fees before you can start trading ;-)
4. if you plan on holding your coin for a longer time and dont plan on daily / weekly trading it might be the best to transfer your funds out of binance (or the exchange that you use).
For example i am using a nano ledger s which is a hardware wallet. its like an USB stick that holds your coins. but it cant hold all different coins. i am storing my ETH and XRP in it but it cant hold my other cryptos im trading (yet).
if you dont want to buy one of these or you want to trade other cryptocurrencies and hold them for a longer time that are not supported it might be the best to create either a paper wallet or a desktop wallet. every wallet holds different coins so you need to search for the crypto you want to trade and then search for its hardware wallet or for experiences with them.
Now you know how to trade but not what to trade. Well this is up to your own research. If i were you i wouldnt trust ANYone praising ANYthing. i would do my own reasearch about the products and think about if it might become big in the near or further future. most importantly if there even is a use case for it.
also check for projects that basically do the same and better and have a higher market cap. if thats the case and your coin doesnt offer anything other that it makes it unique and needed it might be smarter not to invest in it.
The ones id recommend anyway are:
XRP / Ripple. This is the coin that will be a revolution for international fund transfers. Ripple is partner with many banks worldwide and the first testings of it in asia work out very well. this is the safest bet you will ever get in cryptocurrency that it will be huge. i predict a market cap of around 3-6 trillion (slightly lower than the market cap of gold) which would mean that it will be a 2000-3000% rise from now in the next years. this is the most longterm hold you will find.
next would be XVG / Verge. this is a privacy coin that offers the best privacy of all other privacy coins, once wraith protocol for it is released. for IOS its out already but windows and linux is missing but it seems that it will be added very soon with might lead to a 500-2000% rise in a short time frame.
another one to watch is TRX / Tron. this project is about to be a revolution for the distribution of digial media. right now many developers have to pay huge feeds for things like google play store, apples app store, steam, etc etc. and Tron is aiming to be an alternative to these platforms where the developers get all the credit themselves and dont have to pay a huge fee for listing their stuff.
With these 3 i managed to get back 20 times my initial investment in 6 weeks.
This would be it for now. If anyone has any questions ill gladly be helping you out. Just PM me here on PCF or post in this thread. Good luck in the CryptoWorld!
That is the reason why im making this into basic beginners tutorial on how to trade cryptocurrencies.
There are a few things to note before we get into it:
- Cryptocurrencies are highly volatile, which means that you might start off with losing 50% of your money and then making 300% the next week.
- due to the high volatility you need to stay calm. this is one of the biggest mistakes beginners make. lets say someone invests in a coin and the next day he sees that his investment dropped by 30%. he panics and sells off everything to invest in something else and 2 days later he sees that he couldve trippled his money if he wouldve just hold the coin. (many people refer to holding as hodl)
- imo there are 2 different trading approaches.
1. the hype-trader: theres lots of talking going on about a specific coin and many people hype it like its the best invention since the fire. you dont read anything about the technical details but invest in the hype.
this might work out but a lot of pump and dumb schemes start the same. people hype a coin to inflate its price after (!) they bought lots of it cheap, wait a few days and then dump all of their coins onto the market for a huge profit. a lot of youtuber for example get paid in a certain coin for promoting it.
2. the vision-trader: the other type of trader is one that reads the whitepaper (technical details of the project) and tries to get lots of information about a coin / project and if he thinks that it is a good project which will have a bright future he invests in it. these are usually long-term holders. their vision needs to become true and this might take a while. now you can invest in coins that seem to have a nice future but are still not well known. this could be very risky but also very rewarding.
my advice would be to mix both of these groups. do your research about the project and check out the community. if you think there is potential, invest in it and hold it for a longer period of time. yes, you could potentially make a lot more money by trying to sell at the daily highs and buy at the daily lows but that takes a lot of knowledge about the way the people trade. this technique is very very risky and should only be done once you know the market good enough. for the average trader just holding a position is by far the better option.
one big indicator for how well a coin is doing is the market cap. the market cap is the value of all coins in circulation accumulated. investing in a coin with a higher market cap is usually less risky than investing in one with a low market cap. i would put it like this:
market cap of less than 1 million USD= extremely risky
market cap of 1 - 100 million USD = very risky
market cap of 100 million - 500 million risky
market cap of 500 million - 15 billion = less risky
market cap bigger than 15 billion = "safe" (no coin is really safe!)
a good site to check out the market caps is: https://coinmarketcap.com/coins/views/all/
Now you just need to know how to trade. First of all i have to note that most good trading places dont offer the possibility to trade in fiat currency (USD, EUR, etc). That means you have to buy at another market place and then transfer the funds to the market place where you want to trade.
So the steps are like this:
1. Create an account at a market place where you can buy with fiat currency. Usually you have to register and verify yourself. Some market places take weeks to verify your account and some only a few days. It also depends on the country you are living in and checking in google for your country and different experiences regarding that exchange might help in deciding which to take.
Examples: Kraken.com (the site works like shit but the fees are cheap and the registration and verification took
less than 48 hours)
changelly.com (pretty big market place but seems to have huge fees)
coinbase.com (also pretty big but i havent used it yet)
you basically only need these sites for either cashing in your fiat currency or cashing out your fiat currency. there are a lot more of these sites but i recommend to first look experiences up before using them. depending on the amount of money you want to invest it might be best to register and verify yourself at several of these exchanges.
2. register at a real exchange / market place. the one i would recommend is binance.com. its a quite new exchange but it is growing like crazy and offers a very good interface, easy and fast trades, real time graphs and supports quite a lot different pairs to trade. but most importantly: the fees are ridicolously low (usually 0,1% but on stuff that is hot (gets traded a lot) its usually just 0,05%).
It would be nice if you could use my referral link if you want to trade there and like my beginners guide:
https://www.binance.com/
on a side note: not every market place supports every coin. especially if you want to trade lesser known coins (risky!!) you might need to sign up at other exchanges like cryptopia or similar.
when you are on coinmarketcap.com and click on a coin you are interested in it gives you the option to check out their website, sometimes directly the whitepaper and when you click on the markets tab (besides the tab charts) you can see how much is traded and on what exchange.
3. Buy a big cryptocurrency on the first exchange with your fiat money and transfer it to your wallet on binance (or the exchange of your choice).
here you need to know that every cryptocurrency has different times until it arrives at your other wallet. bitcoin might take severak hours, etherium might take 15-30 minutes and ripple (XRP) usually takes less than 3 minutes, depending on the traffic.
before you can send your money you need to register the wallet you want to send it to. if you use binance you can go your funds tab in the upper right corner (when using the browser) and click on deposits tab. next you chose the cryptocurrency you want to deposit in (btc, eth, xrp are the ones id use) and click on deposit. it then shows you all the information you need to enter on the market place where you bought it with fiat money.
Always (!) follow the instructions shown on the deposits / withdrawel pages. they usually show what you have to enter. it is very important that you only send the same currency to it. if you try to send bitcoins to an etherium wallet you might lose your bitcoins forever. if you are unsure if it works, just send a minimum amount and wait for confirmation. once your deposit arrived you can send the rest and be safe.
important: before you buy anything, compare the fees of the different cryptos and market places. you dont want to lose lots of money on fees before you can start trading ;-)
4. if you plan on holding your coin for a longer time and dont plan on daily / weekly trading it might be the best to transfer your funds out of binance (or the exchange that you use).
For example i am using a nano ledger s which is a hardware wallet. its like an USB stick that holds your coins. but it cant hold all different coins. i am storing my ETH and XRP in it but it cant hold my other cryptos im trading (yet).
if you dont want to buy one of these or you want to trade other cryptocurrencies and hold them for a longer time that are not supported it might be the best to create either a paper wallet or a desktop wallet. every wallet holds different coins so you need to search for the crypto you want to trade and then search for its hardware wallet or for experiences with them.
Now you know how to trade but not what to trade. Well this is up to your own research. If i were you i wouldnt trust ANYone praising ANYthing. i would do my own reasearch about the products and think about if it might become big in the near or further future. most importantly if there even is a use case for it.
also check for projects that basically do the same and better and have a higher market cap. if thats the case and your coin doesnt offer anything other that it makes it unique and needed it might be smarter not to invest in it.
The ones id recommend anyway are:
XRP / Ripple. This is the coin that will be a revolution for international fund transfers. Ripple is partner with many banks worldwide and the first testings of it in asia work out very well. this is the safest bet you will ever get in cryptocurrency that it will be huge. i predict a market cap of around 3-6 trillion (slightly lower than the market cap of gold) which would mean that it will be a 2000-3000% rise from now in the next years. this is the most longterm hold you will find.
next would be XVG / Verge. this is a privacy coin that offers the best privacy of all other privacy coins, once wraith protocol for it is released. for IOS its out already but windows and linux is missing but it seems that it will be added very soon with might lead to a 500-2000% rise in a short time frame.
another one to watch is TRX / Tron. this project is about to be a revolution for the distribution of digial media. right now many developers have to pay huge feeds for things like google play store, apples app store, steam, etc etc. and Tron is aiming to be an alternative to these platforms where the developers get all the credit themselves and dont have to pay a huge fee for listing their stuff.
With these 3 i managed to get back 20 times my initial investment in 6 weeks.
This would be it for now. If anyone has any questions ill gladly be helping you out. Just PM me here on PCF or post in this thread. Good luck in the CryptoWorld!
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