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.
If you think a trend will continue for a while, or if it’s too hard to predict when the price will change direction, following the trend is a more risk averse strategy. With this strategy, you trade with the trend rather than with the swings. If the market is trending up, only open long trades. If the market is falling, you only open short trades. Trend followers start trading after a trend has been established, and they exit when the trend changes. This is also called “Position Trading.”
React to “the Mood of the Market,” But Otherwise Pick a Strategy and Stick With It. The market changes moods, and some strategies are better than others in a given market. So you’ll likely want to evolve your strategy as the market changes, and you learn. However, you’ll also likely want to avoid things like going long for most of the year, but then 9 months into your investment you start day trading when the market is down. Sometimes it can be tempting to change one’s strategy to adjust to the current market (for example if the market is bearish and trading in a tight range), however, this can get you in real trouble if you don’t make very careful moves. A long investor who starts going short will start realizing capital gains and will risk being in fiat if and when there is a recovery (recoveries, like corrections, can come on very quickly and without warning). If you do switch from long to short, make a commitment to yourself to buy back in upon a certain event occurring (like the 5 day EMA crossing the 50 day on 6 hr candles; something like that). I’ve hear countless stories of plans to buy back in, they often end with “but I didn’t,” those are the stories told in bull markets by very sad people.
A small number of cryptocurrency pairs. It is true. You will not find any altcoins from above the top 20. However, Bitstamp offers in its turn the possibility to work with hybrid pairs including USD and other fiats. The exchange can be used as your pass into the world of altcoins as you may buy BTC or ETH here and then transfer those cryptos to other exchanges with a wider range of pairs, which do not support fiat money.
So-called “hot wallets” make accessing your crypto easy – allowing you to transfer funds and complete trades quickly and with ease. Many providers now offer mobile apps so this can be done on the move. Meanwhile, “cold wallets” are stored offline – commonly on USB sticks – with some people even writing down their private keys on paper. The latter can work well if you’re looking to save crypto for a rainy day.
Payment Methods – What payment methods are available on the exchange? Credit & debit card? wire transfer? PayPal? If an exchange has limited payment options then it may not be convenient for you to use it. Remember that purchasing cryptocurrencies with a credit card will always require identity verification and come with a premium price as there is a higher risk of fraud and higher transaction and processing fees. Purchasing cryptocurrency via wire transfer will take significantly longer as it takes time for banks to process.
Like any other loan, this borrowed Bitcoin must be paid back with interest. On losses, you will need to pay back the loss and the interest. Poloniex offers up a great guide to margin trading that explains everything you need to know. It’s worth reiterating that the estimated liquidation price is the price at which a forced exit from our position would occur, costing us all of the Bitcoin in our margin account so that it may be used to pay back the borrowed coin. Utilizing stop limits to avoid this is almost always a good idea.
Use small buy-ins, and don’t margin trade or short unless you know your stuff. The smaller your bet is compared to your total investable funds, the less risk you are taking on every bet (one of many insanely important things we are covering here). Putting it all on black is tempting, but then if it comes up red, you have nothing left to invest. Live to fight another day by learning to manage your buy-in size. As a rule of thumb invest 1% or less per buy-in (yes, that small, really; losing 100% of 1% leaves you with 99%, losing 1% of 100% leaves you with 99%. Small bids offer the same bet, but with way less risk). Put reward aside and practice risk management and capital preservation until you are very experienced (and thus, by logical extension: don’t margin trade or short unless you know what you are doing, as those leveraged bets magnify your risk by their very nature). See Kelly criterion.
Common sense doesn't apply for some traders. In October, Spatafora started trading bitcoin, litecoin and ethereum to learn about the market and understand whether any of the coins were undervalued. Instead, he found that many of the investors exhibited irrational exuberance in believing the virtual currencies would never stop their climb in the market.
The Verge (XVG) technology revolves around providing an incredibly safe, private, and fast digital payment transactions – on an everyday basis. It offers all individuals and businesses a fast, efficient, and a decentralized option to make and receive direct payments in an average 5-second window per transaction. It runs on open-source technology, it is not a private company, and it isn’t funded by pre-mined coins. This is one of the reasons why people are so excited about it, all of its development, marketing, and other endeavors are completely done by the community – for the community.
Trading on low-volume days in the market could incur substantial slippage. People who make trades — especially large trades — on low-volume days often will not find many partners on the other side of the order book willing to make that trade. The result is that they could end up paying much more for the trade than expected, incurring slippage in the process.
We are still seeing the bulls grind EMA 4 hour support, but they have to break the lower highs to see continuation and shift momentum. The bears continue to hold the upper paw as long as the lower highs remain. The daily chart continues to tighten and this weekend it will be worth watching other alt coins in daily equilibriums to see if we have any initial ...
At this point, you have narrowed down your list to a few cryptos that have a good potential for profitability. But you need to narrow down further and find the ones that have the potential to take-off faster than the rest. That’s why you need to keep in touch with the news. Check out crypto news from different sources to determine, which of the cryptos you have in your bucket-list have some interesting news coming up.
You can’t simply go to a bank and ask for any digital currency. Instead, you’ll need a proper digital platform for making any trade in Bitcoin, Ether, Ripple or as a matter of fact any crypto. After all, that’s the whole point of creating digital currencies. Cryptocurrency exchange platforms are such online portals that allow you to exchange a digital currency (cryptocurrency) for another one or even a fiat currency depending upon the type of exchange.
Many governments are unsure of what to class cryptocurrencies as, currency or property. The U.S in 2014 introduced cryptocurrency trading rules that mean digital currencies will fall under the umbrella of property. Traders will then be classed as investors and will have to conform to complex reporting requirements. Details of which can be found by heading to the IRS notice 2014-21.
If your focus is to conduct crypto-to-crypto trading, Binance is one of the best options. Ranked as one of the most popular cryptocurrency exchanges worldwide, they provide you with impressive offerings along with an extremely low trading fee. Although the Binance platform is a young entrant into the market, it is rapidly growing, and holds a huge selection of altcoins with Bitcoin, Ethereum, and Tether pairings.
Let’s say on January 2, 2017, you owned $1,000 and exchanged it into euros (EUR) with another market trader at a rate of EUR€0.9565, leaving you with EUR€956.50. Then, on November 24, 2017, the value of the US dollar had fallen from EUR€0.9565 to EUR€0.8380, so you decide to exchange your euros back into US dollars. After finding someone willing to sell their US dollars for your euros, you carry out the exchange at the new price. Your EUR€956.50 is now worth $1,141.40, leaving you with a profit of a little more than 14%.
Bitcoin faced extreme headwinds in March when Alphabet's Google (ticker: GOOG, GOOGL) joined Facebook (FB) in banning ads for cryptocurrencies, which lowered liquidity in the market. In an abrupt reversal, Facebook said on June 26 that it would allow some ads for cryptocurrencies, but continues its ban against initial coin offerings and binary options.
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.
This is one of the most important cryptocurrency tips. By looking at the number of wallets vs the number of active wallets and the current trading volume, you can attempt to give a specific currency a current value. You can then make informed decisions based on today’s market price. The more accurate your predictions, the greater your chances for profit.
LocalBitcoin is a P2P Bitcoin exchange with buyers and sellers in thousands of cities around the world. With LocalBitcoins, you can meet up with people in your local area and buy or sell bitcoins in cash, send money through PayPal, Skrill or Dwolla or arrange to deposit cash at a bank branch. LocalBitcoins only take a commission of 1% from the sellers who set their own exchange rates. To ensure trading is secure, LocalBitcoins takes a number of precautions. To start, the platform rates each trader with a reputation rank and publicly displays past activities. Also, once a trade is requested, the money is held on LocalBitcoins’ escrow service. After the seller confirms the trade is completed the funds are released. If something does happen to go wrong, LocalBitcoins has a support and conflict resolution team to resolve conflicts between buyers and sellers. Check out LocalBitcoins FAQ
I prefer to trade on decentralized exchanges. For myself, I made a choice in the form of ethnermium.сom. They have a huge number of coins. There are no minimum restrictions on trade and fees are so insignificant that you will not notice them. I also think the advantage of the easy creation of a wallet like MeW and easy integration with metamasks and a high level of security
Let’s discuss the correct way of using the order book. A coin’s value is determined by the last executed transaction, at the junction between buyers and sellers, or according to the supply and demand forces. Those supply and demand commands are arranged in a table, better known as the order book. In crypto, it’s all about volatility. Thus, and following the previous tips given in our crypto trading article, when you enter a position it is recommended that you set the sell level to take profits. Alternatively, while aspiring to make it simultaneously, set a stop loss to minimize losses. But how will we know exactly where to place these commands? To identify both resistance and support areas, we start by analyzing the graph at the most basic level. A beginner’s technical analysis article will assist with this task. We identify points where we want to take profit (resistance levels) and simultaneously identify support levels. By referring to the order book we will find the optimal levels at which we will actually place these commands. Note that if support levels break down it is time to cut the losses.
The victims of the dotcom crash would talk about “the smart money,” this group doing that to another group to make money out of them. Narrative is a weak basis for investing. In crypto-times, people talk about whales as if there is a secret level to the game and secret methods available to those who are big enough to trade in great size, where they can’t lose, but you can. The whales won’t let the market do this, or do that, just in the same way as the smart money was dreamt to operate.
No, the successful trader is not me. I’ve gotten lucky a few times and I’m still refining and trying out strategies; on the other hand, I’m part of communities of people who trade on a daily basis to grow their portfolios, and while some of the results can be attributed to luck, a majority of it is based on fundamentals, good habits, and experience.