These are what allow us to buy and sell cryptocurrencies. There are a handful of popular crypto exchanges, some of them have advantages over others. For example, some exchanges don’t allow us to deposit and withdraw using fiat currency like the U.S. dollar and euro; others aren’t available in certain countries. In this guide we will focus on two very popular exchanges, GDAX and Poloniex. GDAX gives us the ability to use our fiat currency to buy Bitcoin. Poloniex does not, but does give us a wide array of altcoins to trade. There, we’ll be using major coins like Bitcoin and Ethereum to buy the altcoins, and vice versa. Other popular exchanges such as Kraken and Bittrex offer even more coins.
Now, of course, you will want to do your due diligence and make sure that you know what the market conditions are first, and what the previous price levels have been when trying to predict the appropriate time to get out. Knowing when to get out is the most important thing about this type of strategy. So, apparently, timing is everything here, and the more you know the better off you will be when judging for the appropriate times to buy or sell so that you have the greatest opportunity for the biggest profit.
Simply, the OBV is a remarkable technical indicator that can show us if the real money is really buying Bitcoin or quite the contrary they are selling. What we want to see when Bitcoin is failing to break above a resistance level or a swing high and the Ethereum already broke is for the OBV to not only increase in the direction of the trend, but to also move beyond the level it was when Bitcoin was trading previously at this resistance level (see figure below). Here is how to identify the right swing to boost your profit.
Consider setting stop orders after you buy. Did I really just wait to point #37 to commit a whole tip to stops?! They are super important for everything except maybe building a long position over time. A stop order will create a market order when a price is hit. This means stop orders are subject to slippage and fees, but this also means you can calculate your risk. As a very general rule of thumb, one might want to ladder stops when not at a computer to protect their investment. Sure, crypto markets are thin (low volume), and that means prices could dip and eat all your stops (super depressing when this happens). However, most of the time we don’t get very deep and temporary dips, and thus most of the time stops will work as intended and simply save your investment in the case of a downturn. I.e., use stops, but be careful and understand the risks.
Keeping up to speed with the news on Cointelegraph, seeking independent ratings on ICOs, and gathering as much information as you can on a coin’s background are essential steps before you decide to make an investment. After making a purchase, monitor any changes in price closely – and consider setting higher and upper limits on when you would want to sell your crypto, mitigating losses in the event of a crash and protecting profits after a surge.
Trading CFDs, FX, and cryptocurrencies involves a high degree of risk. All providers have a percentage of retail investor accounts that lose money when trading CFDs with their company. You should consider whether you can afford to take the high risk of losing your money and whether you understand how CFDs, FX, and cryptocurrencies work. All data was obtained from a published web site as of 4/03/2018 and is believed to be accurate, but is not guaranteed. The ForexBrokers.com staff is constantly working with its online broker representatives to obtain the latest data. If you believe any data listed above is inaccurate, please contact us using the link at the bottom of this page.
To be able to take short positions, we need to understand margin trading. Trading on margin means we are trading with borrowed money. On exchanges like Poloniex, we can trade Bitcoin with a handful of coins (there are fewer coins offered for margin trading) with 2.5x leverage. That is, if we own 1 BTC, we can borrow up to 2.5 BTC to trade with. To be clear, this is not 2.5 BTC that we own. Now, on a trade that nets us 10% profit, we are bringing home .25 BTC instead of .1 BTC.
Watch the Order Book. The order book (found on all exchanges) can give you a good sense of what buy/sell orders are “on the books” (sitting on the market waiting to be bought or sold). If you see a lot of sell orders at a certain price and want to sell, you may aim to sell under that price. Likewise, if you are waiting for the price to drop to buy, look at the distribution of other people’s buy orders. Just watch out for artificial buy walls and sell walls (large orders that aren’t meant to fill). You’ll almost always find buy walls and sell walls at support and resistance levels.
Ripple is an open-source digital payment network, and it’s already being used by some of the world’s largest banks – such as the bank of Tokyo and Santandar. XRP has shown significant potential recently and has been turning a lot of heads. Ripple aims to become the go-to tool for banks on a global scale, while still giving an exciting investment opportunity to crypto advocates and solo investors. Ripple has many haters and I’ve been burned by it myself in the past – I sold 30,000 XRP at 20 cents… painful. Still, I did buy them at 3 cents a pop, so it could have been worse. I hold 10,000 XRP today and will hold until 2022.
Market orders allow us to exchange any amount of coin right away at the current market price. Orders are filled using the best available price in the exchange’s order book. For example, if you placed a market buy order for $100, it would buy from the lowest priced sell order(s) until you had used that $100. The advantage is that this transaction is always completed immediately; the disadvantage is that we don’t know exactly what price we are going to get.
The market is so volatile that big movements up and down are pretty common and you can capitalise on this through swing trading. I recommend choosing a group of coins to be in and then sticking to swing trading in those coins rather than jumping constantly between different cryptocurrencies – it does help to have an understanding of what different coins do and how much volatility can be expected and you will gain that understanding with time. Good luck!
The cryptocurrency market is a difficult environment to navigate. Its volatility can be a boon for some and a curse for others. However, what is clear is that there are a variety of trading strategies that one can employ to try and ‘beat the market’. Regardless of the strategy that one chooses to utilize, one must acknowledge the risk that comes with trading in this market. As such, it is important to not invest more than one is willing to lose, and also to make sure that thorough research is always performed before executing any trade.
I’m an elderly gentleman, closing in on 68 years of age. My son introduced me to Crypto in late 2012. After doing a lot of researching Btc I felt strongly that It had a lot of growth and potential ahead of it. So my son and I built my 1st rig and I started mining in January 2013, pulled $5,000 from my IRA and bought Btc at $13.44 and have never looked back since. The sweetest sound that I’ve ever heard was the clink of my 1st mined Bitcoin way back when. That was as satisfying a note as there ever was on any musical scale. Nothing but happy days ahead since. Don’t get me wrong, there have been bumps in this Crypto highway, the demise of the Silk Road, Mt Gox, DAO hack to name a few but as a HOLDer (holding on for the long duration) not a HODLer (hanging on for dear life) and not day trading, has rewarded me with quite a decent profit. It just takes a lot of patience (Sisu) and doing your research with due diligence. I have since invested in Ethereum (Dec 2015), Monero (Jan 2016) and lately Omisego (July 2017) all purchased from some of my profits from Btc to go along with my newly acquired free Bch and recently free Omg. I’m currently operating 3 rigs equipped with 6 gpus each. 2 mining Eth and 1 Monero for now, all of which will be re-evaluated after Metropolis kicks in to see which direction I go from here. So I ‘m back to doing more research in order to help with my next moves but I’ll always be a strong believer in Ethereum which is where I’ve made my money so far. HOLDing on to the rest for now. Btc $5,000-10,000, Eth $2,500- 5,000, Monero $200-400, Omg $100-1,000 no one ever really knows but MY research says yes and so far MY research has not proven me wrong. Bought Btc at $13.44, Eth at .80, Monero at .48, Omg at .43 Bch for free. No where to go but up for me. Just biding my time. It’s taken me over 4 and a half years to get here but I’ve made over $4,000,000 so far with just my original investment plus the cost of my rigs and I’m still sitting on a lot more. Taking a position and HOLDing is where the real profit is and it isn’t going to happen overnight. So if you want aggravation and ulcers go ahead and day trade, try and beat the Market I wish you luck but the real money comes with Research, HOLDing and Patience. Hope this advice helps because in the long run what it all comes down to, its just Eths, You and Me hopefully making the right decisions.
For instance, you might have a day trading strategy that exploits differentials in tightly correlated cryptocurrencies: BTC and ETH, for example. If you think that BTC and ETH are tightly correlated and you see that ETH is disproportionately low, you might buy ETH with the expectation that ETH will rise up again to restore its typical relationship with BTC. However, this might be a case of contagion: the whole market is going down. In this case, your technical analysis could be your downfall: you’ve just bought into a position that’s still going down.
Once you have narrowed down on cryptos with high daily trading volumes, focus on their historical price movements. The best way to do this is to use a financial ratio known as the Sharpe ratio. Don’t worry about calculating it, since you can easily find it online. The Sharpe ratio measures the potential return of an asset based on its volatility. Figures higher than 1 are usually a sign of an asset with high potential returns. Given that cryptos had a stellar year in 2017, most of them have a Sharpe ratio of higher than 1. Therefore, for you to make use of this ratio, narrow down on cryptos that have the highest Sharpe ratio relative to the rest of the market to Profitable Cryptocurrency Trading
Swing trading concerns individuals that hold a cryptocurrency over a set period of time, usually a few days or weeks. Swing traders will then attempt to determine the overall trend of their cryptocurrency holding and execute trades based on its overall upward or downward trend. The success of swing trading is largely dependent on an individual’s ability to time the market, which is an extremely difficult feat to achieve given just how quickly the cryptocurrency market can turn. Thus, swing trading is no doubt one of the more riskier trading strategies to pursue.
Weather you are youngster or an experienced lad, the popularity of cryptocurrencies along with their hefty returns will make you curious to try your luck in the markets. However, buying and selling of these digital currencies often brings you to ponder upon questions like- How do I start earning money? Which is the best cryptocurrency exchange platform for trading? Well, if there’s a will, there’s a way. There are many options when it comes to crypto exchanges, all of which have their specific pros and cons.
Another very common mistake beginners make is spending all their trading money in one go. If you find a good entry, you should buy in with a percentage of your funds (50% - 60%) and hold the rest to see whether your entry works. This way, even if a coin drops following your purchase, you can average it down by buying more at the dip. Similarly, if the uptrend continues, you can always buy more, and even though this approach reduces your profit margins, it secures your position and prevents you from being all-in on a trade that goes south.
BTC remains the undisputed lynchpin of the whole crypto industry as its market cap comprises a staggering 43 percent of the whole digital currency market. Regulators around the globe have put BTC under increased scrutiny as official from the majority of nations are trying to devise strategies on how to regulate bitcoin along with other cryptocurrencies. Even though bitcoin has endured a rough 2018 so far, having plummeted over 60 percent since its December heights, it remains the most feasible option for crypto investors, according to Mr. Smith.
Dad advice: Aim to buy low, sell high; try not to buy high, sell low. Look at the price trend, if we are at the highest point it has been in the past 24 hours (days, weeks, etc), that is inherently riskier than buying at a short term low. It can make sense to buy as the price starts to break out, but buying after a breakout at a new high while filled with excitement is a little “irrationally exuberant.” This is to say aim to “buy the dips” and often “the best time to buy is when there’s blood in the streets… even if it is your own.” Conversely, the worst time to buy is often (but not always) right after the price has shot up and everyone is manic. If you do buy high, and it ends up dropping shortly after, consider HODLing (to “HODL” is to Hold On for Dear Life as the price goes down. It is what you do when you buy high and then neglect to set a stop or if you are going long and can’t or don’t want to cash out yet). Buying the dips and holding can be dangerous in a bear market, and it can put pressure on you to sell low if you overextend, but its still often better than FOMO buying the top. Sometimes it can be wise to sell for a loss or to buy when the price is at a local high, but knowing when this is the case requires a rather high skill level. Thus, although rules sometimes are best broken, start by aiming to buy low and sell high.Two last points 1. Knowing when to take a loss is hard, buying the dips and holding is easy. 2. The dips WILL happen, you must be patient and ward off FOMO!
With the KuCoin exchange, you’ll also get an is an easy, hassle-free experience along with different popular as well as rare cryptocurrencies such as DragonChain, IOTA, etc. If mobile apps are your preference, you can trade on KuCoin easily as it has apps for both Android and iOS. In order to go ahead with trading in KuCoin, you can deposit any crypto initially and start immediately. In terms of fee, KuCoin also takes 0.1% per transaction, half of which can be taken by you through the unique dividend system offered by the exchange.
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When buying coins, and especially with Bitcoin, you will notice that your purchase is in decimal. A Bitcoin itself is relatively expensive, around $10,000 at the moment (as of 15th Feb '18). If you were to purchase say $5,000 of Bitcoin, you would at today's rate be purchasing around 0.5 of Bitcoin. Do not ever worry about this; Bitcoin operates at eight decimals places. You do not need to own a whole Bitcoin or any coin for that matter. Consider it like pence in the pound or cents in the dollar, but with more decimal places.
The No. 1 thing you’ll need to keep in mind when it comes to cryptocurrency trading is that the price is extremely volatile. Where certain trade techniques used in forex might take months to come to fruition, in cryptocurrency trading, it could only take hours or days. While this is beneficial when it comes to making a profit, it could also be your downfall if the price moves the other way.
Coinbase boasts great customer service, which is a huge win for customers of an online platform. And, your cryptocurrency – whether you’re trading Bitcoin, Ethereum, Litecoin, ERC20 token, or anything else – is protected. The platform uses vault protections, delayed withdrawals, and two-factor authentication. The best part? Your cryptocurrency is covered by insurance.
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Active traders looking to speculate on Bitcoin over the short or medium term may find that trading CFD/derivatives on Bitcoin using an online forex broker will provide them with 24hour trading, potentially lower margin, and the ability to go either long or short. Because of counter-party risk, choosing a broker is just as important as finding one with the best trading tools or commission rates.
Knowing generally how people are behaving, how they are feeling about the coin’s activity, and the news flow (i.e. government, or big business factual news about the space) surrounding the upturn or downturn that will push it one way or the other is the key to this strategy for the trading of cryptocurrency. One can’t really tell exactly but using the right clues we can make smart decisions based on the preponderance of the evidence.
I’ve met so many people that are speculating in crypto these days that have never even read Satoshi’s white paper on Bitcoin. Not only are they not practitioners (tech experts), they even are too lazy or too blinded by greed to even do a baseline level of work. There are many easy ways to quickly get up to speed on crypto and educate oneself you just have to do the work (one of my go-to resources is a company called Oddup which is an ICO/Crypto rating company used by all the major crypto hedge funds and institutional players).
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Hold some coins, range trade some coins, keep money on hand for a dip, and set some high-ball and low-ball orders. If you want to ensure you are happy no matter which direction the winds blow, then be set-up to benefit from whatever comes next. If you have some coins you hold, some coins you trade daily or weekly, some money set aside for a dip, and some high-ball and low-ball orders set, then you stand to benefit regardless of what happens. It can be tempting to cash out of crypto or go all in, but both of those can be disappointing if the market goes in the opposite direction you were hoping for. It isn’t always the most profitable move to run a strategy like this, but it can help you to gain experience and have something to be excited about in almost any market. TIP: Note that diversifying your strategy and holdings eats into profits, but offers flexibility. It is a trade-off.
We know firsthand what it’s like to kick yourself over trades that haven’t worked or worked spectacularly yet not have the desired position size. All you can do is live in the now, the past is over. After all, hindsight is 20-20. It would’ve been nice to go all in when Bitcoin was $600 a year ago and cash out on a high return, but that’s not how it works. Imagine if you bought in 2013 when Bitcoin was 1,000, panicked when it dropped to 200 then sold? Imagine that sting. Hindsight is 20-20, we can’t predict the future. Learn from past successes and failures and apply it moving forward. Here are some tips, in our experience, for new cyrptocurrency investors.
There are many groups on Facebook where you can find likeminded folks who will happily talk crypto all day but the problem is that 99% of these groups are filled with people who have only a very basic understanding of cryptocurrency and the knowledge available here is not particularly strong. I have recently left almost every single group on Facebook as, in my opinion, they are largely filled with FUD.
One of the best resources for finding out about current or upcoming ICOs is here. If you see a coin that peaks your interest, be sure to be extra diligent when evaluating it. Since we have no historical data to gauge how the coin might perform, it’s very important to understand the real-world purpose of the coin. Another thing to note is whether the ICO is capped or not. Some ICO’s will be capped at a certain number, meaning that people who are late to the part, will need to wait for the coin to be offered on exchanges.
Don’t invest blindy. There are people in this world who would sell a blind person a pair of glasses if they could make money. Those same people play in the cryptocurrency markets and use every opportunity to exploit less-informed investors. They’ll tell you what to buy or claim certain coins will moon, just to increase the prices so they can exit. Due to the highly speculative nature of the cryptocurrency markets today, a good investor will always do his or her own research in order to take full responsibility for the potential investment outcome. Information coming from even the best investor is, at best, great information, but never a promise, so you can still get burned.