Cryptocurrency trading guide



So, what is cryptocurrency trading? It is one of the most exciting new things in the world of trading. Cryptocurrency is a digital form of currency that is extremely anonymous. You may have heard of Bitcoin. This is one form of cryptocurrency. We will look at some of the others and discuss trading and cryptocurrency in general in this cryptocurrency trading guide. You will get a good insights and knowledge about cryptocurrencies after reading this cryptocurrency guide.


Top 3 Cryptocurrencies: Bitcoin, Ethereum and Litecoin


You may have heard of cryptocurrencies like bitcoin, Ethereum and Litecoin. These are the top three cryptocurrencies right now. Let’s look at each one in a little more detail.

Bitcoin is considered the world’s first decentralized digital currency. Bitcoin was created in 2009 and became well-known thanks to the media coverage of the anonymous drug marketplace Silk Road, which used Bitcoin as its currency. This Bitcoin trading guide will mostly focus on this cryptocurrency.

Litecoin came in to the cryptocurrency market just a couple of years after Bitcoin. This digital currency has a number of advantages over Bitcoin including some technical improvements and faster payment times.

Ethereum is the newest of these three currencies, but it has also garnered a great deal of excitement and is a popular trading cryptocurrency. This cryptocurrency trading guide will focus on it as the second main trading cryptocurrency out there.

In this article, we will mostly be discussing Bitcoin, although the concepts and advice listed here can apply to trading Bitcoin, Ethereum, or how to make money with cryptocurrency trading of any type.


Bitcoin Exchange & Cryptocurrency Trading Advantages


When it comes to cryptocurrency trading, Bitcoin is better than just about any other cryptocurrency market that you could trade. This includes stocks, Forex, and even commodities. Forex trading for beginners has its advantages too. But there are three reasons why most people consider Bitcoin the best cryptocurrency right now.

3 reasons why people choose Bitcoin as the best cryptocurrency

1. Because Bitcoin is so volatile, extremely high profits are possible without resorting to leveraging. For traders, big price moves are the way that fortunes are made on the best Bitcoin trading platform. These price moves are much more common with Bitcoin than they are with any other financial instrument.

2. The Cryptocurrency trading for Bitcoin never stops. It is available 24 hours a day, 7 days a week. By contrast, Forex is available only on weekdays. While trading stocks and commodities can only be done during business hours. You will be able to visit your Bitcoin trading broker and make trades according to your schedule, which can be great when it comes to cryptocurrency trading for beginners, since they may not have the ability to adhere to such a tight schedule.

3. Bitcoin is one of the fastest and least expensive instruments to trade. Compared to the traditional trading fees on the cryptocurrency market that you might pay, Bitcoin cryptocurrency exchange fees are extremely low. In addition, Bitcoin withdrawals and deposits are completed much more quickly than conventional training and since the currency is basically anonymous. There also is almost no paperwork to prove your identity with some Bitcoin broker services. However, if you want a safe cryptocurrency broker, you will probably need to show ID. A legit cryptocurrency broker will not allow you to use the Bitcoin trading platform without ensuring that you are not attempting money laundering or other illegal activities.


How to Trade Bitcoin against Other Currencies


Bitcoin can be traded against other currencies in exactly the same way as you would trade anything else. The same economic factors that affect currencies like the Euro and the US dollar will affect Bitcoin trading as well. The best Bitcoin trading platform will have cryptocurrency news available and other information that allows you to hone your cryptocurrency strategies for the current state of the market and make money online even when other financial markets are suffering.

All of the standard factors that you would take into consideration if you were trading currency, including the Consumer Price Index (CPI), inflation, GDP forecasts, news from the Central Bank and much more, all need to be factored in when you are trading Bitcoin, just as you would if you were trading any other currency. Online trading cryptocurrencies is somewhat insulated from these changes, but the best cryptocurrency strategy will factor them in regardless.

In addition, government regulation can also affect the value of Bitcoin and may increase or decrease the demand for it. There is now a huge interest in trading Bitcoin and number of legitimate trading platforms where you can put money into your cryptocurrency wallet. There is no doubt that you can make money with Bitcoin.


How to Trade on the Exchange Market


When it comes to cryptocurrency, the exchange market is where you will find the trading action. You can find the best Bitcoin exchange companies and the best Bitcoin broker organizations online that use it.

The exchange market can trade your Bitcoin for other currencies of value. The exchange market is somewhat like an underground stock exchange where things are more anonymous.

There are a number of places you can go online in order to trade your cryptocurrency. You will have to do your research and figure out which is the best Bitcoin trading site, and which brokers are going to fit your training style, to give you the features that you want.

The best cryptocurrency broker will offer things like a great guide to trading cryptocurrency, a demo account for you to try out the service as well as charts and tools for you to evaluate trades. You can compare cryptocurrency trading brokers by using these factors as well as the others listed in this Bitcoin trading guide.

The exchange market is where most of the action is when it comes to cryptocurrencies. It gives everyone the ability to trade their coins for other coins of value. It’s like the underground stock exchange. When it comes time to trade some of your coins for bitcoin, or another more valuable coin, you will head over to one of the many cryptocurrency brokers that fit your Bitcoin strategy.


Day Trading in Cryptocurrency


Let’s discuss trading in cryptocurrency and cryptocurrency spread betting in a little more detail. When you are trading cryptocurrency, you can easily make money. And fact you could double your money or make thousands of dollars a day with very little effort if you know what you’re doing and get lucky.

However in order to make that happen you must know when to invest your money and when to pull it out.

Bitcoin has some terminology that you want to become familiar with. For example, The bigger players in the market are called the whales. These whales can affect market movements in a big way because of the level of their investing.

How Bitcoin investors  ride the waves

That’s why Bitcoin investors must learn how to ride the waves – still sticking with the ocean metaphor – and even the so-called ‘little fish’ in this example can make money with Bitcoin. You just have to be able to tell when the market is at a low point and going up, plus be able to tell when it is picked out and will continue to drop. This means that you may want to sell.

However, the above method is rather risky and there are other strategies that are safer for the investor. For example, investing smaller amounts in coins that are already established is a safer practice. This involves trying to find the best buy-in to start earning profit immediately.

In order to do this, you’re going to have to learn how to read charts. You can do this by going to any of the reputable Bitcoin brokers that are out there and set up an account. Even though Bitcoin is relatively anonymous, if you’re going to be trading large amounts of currency, the broker is going to require that you prove your identity.

Striking balance

When you’re trading Bitcoin, you need to strike a balance between diversifying your portfolio and not taking on more than you can handle. You definitely want to avoid investing in just one type of cryptocurrency, because if that particular currency fails you will lose everything. You also do not want to invest your money in one particular coin such as finding an Altcoin broker and only doing Altcoin.

Some of the newer coins like Golem have the potential for a great deal of success with low buy-in amounts; rather like Bitcoin was when it first began. However there is a major risk of failure with these coins because you don’t know if they have staying power.

A good strategy for investing includes five or six coins with a couple of them in Bitcoin and the rest in Ethereum. It is a good idea to split these up evenly in case one of them completely bottoms out. You can also have variation between coins that are for long-term investing and those that can be swapped out if necessary.


How to do Charting


No matter if you were day-trading or if you plan to trade more sporadically, you are going to need to learn how to chart. Charting is vital in CFD trading for beginners, stocks, Forex and yes, for cryptocurrencies strategies as well.

Charting means using information and technical analysis to try and predict which cryptocurrencies that you should be investing in and how you should be investing your money.

Good cryptocurrency brokers we’ll have charts with excellent definition and cover all of the exchanges, as well as allow you to make trades. Some of these Brokers even offer bonuses and promotions that you will enjoy.

Charting for your investment

You can create a journey for your investment by using charting.
You determine when to get out of an investment – that is to sell – based upon chart performance. While buy low and sell high is definitely the order of the day, there is a lot more to trading than just this. For example, you will have to understand how to break a Bitcoin into Satoshis and know difference between a Bear & a Bull market divergence.

You definitely need to learn how to read the charts, because there may be a better price to buy Bitcoin; and there is usually a better price to sell it as well. Many of the brokers out there have great tools for you to use and learn.

You will not be able to learn everything that you need to know for successful trading overnight. You will need to take some time and go through the trading guides that your broker has provided. Including other resources from around the web in order to learn to trade successfully.


Other Indicators


Let’s discuss some of the other indicators that you can use when you are getting ready to trade.

  • Stochastic Oscillator: this is a momentum indicator that compares the price at closing to the high and low averages over time.
  • Moving Average Convergence Divergence (MACD): this indicator shows a trend using two different moving averages.
  • Relative Strength Index (RSI): This momentum indicator measures how much (and how fast) the price of something changes.
  • On Balance Volume (OBV): An indicator that uses the principles of volume flow to predict future price changes.
  • The Rational Flibbr Indicator: You may also be interested in the Rational Flibbr Indicator. This is a custom indicator that was created by a user and lets you know when something is overbought and oversold.


Use Facts Not Emotions


One of the things that you want to keep in mind is that your job is to minimize your losses and maximize your gains. This is not a get-rich-quick scheme, nor is it completely risk-free. You need to know where your risk to reward ratio is.

You need to know when to close out and when to stay in once you feel you might lose money. if you don’t cut your losses at a certain point, you will lose a great deal more. But if you cut too soon, you could miss out on profit instead.

Don’t make emotional trades

You shouldn’t get caught up in worrying about whether or not you are missing out. Don’t make emotional trades. Instead use the tools that are at your disposal and ask yourself, whenever you are considering making a trade, if the numbers bear out. Also, make sure that you are confirming a buying signal with more than one indicator.

No matter what your investment is, it is still money. Even if you’re only spending $50, you could put it into a low Market coin and have exponential gains over the next few months. All you have to do is remain calm and hold your position.

Sometimes you just need to get up from the computer and walk away. Learn from your mistakes and try to find the indicators that you missed when you are wrong. If you make the wrong decision, or if the market goes a different way than you were expecting, simply wait for your investment to break even when there is another Bull market.

Also bear in mind that cryptocurrencies are just beginning.  The people who got in on the ground floor spent literally pennies, a few years ago when Bitcoin began. These people are now left with Bitcoins that are worth tens of thousands of dollars.

This type of currency could very easily change the financial industry. Do your research and carefully look into cryptocurrency trading and put together an investment profile that makes sense. Protect your portfolio just like you would with any other investment. Keep good records and have securities in place.


The Assortment of Cryptocurrency Out There


There is a great deal of cryptocurrencies out there. We will go over several different popular ones so that you can become more familiar with the options that are available. This will help you to make a better investing decision when trying to choose the cryptocurrency that you want to invest in.


Bitcoin (BTC)


Cryptocurrency trading Bitcoin.

We will start with Bitcoin because it is by far the most popular (and the oldest) cryptocurrency on the market. There are some great documentaries and blog posts about the popularity of Bitcoin. Most people are familiar with this currency. Because when the news media found out about the Tor-protected drug marketplace Silk Road, Bitcoin was the currency of choice for those wishing to make illicit drug deals online.

But there is a lot more to this currency then just that one poor example of how it was used. The people behind Bitcoin did not intend for it to be used to purchase illegal guns or cocaine online. But they did intend for people to be able to conduct transactions anonymously; and without a central governing body.

Bitcoin a digital payment system

Bitcoin is a digital payment system. In this respect, it is a little like PayPal. Bitcoin is completely decentralized and completely online. It is also open source and can either be bought through online exchanges, or can be mined using a computer. However, in order to make a profit from mining, you need a network of extremely powerful supercomputers. Another alternative might be a nearly free energy source.

In 2009, the Bitcoin was available for around $0.03. At the time of this writing, a Bitcoin is worth around $4,500 us. There are also several alternatives to bitcoin as well.


Ethereum (ETH)

Cryptocurrency trading Ethereum.

Ethereum is another cryptocurrenices in the market. This cryptocurrency is the top-performing alternative to Bitcoin on the market today. Ethereum rose from $10 a coin to more than $500 in the past couple of years.
There are some minor problems with it. For example, network congestion and delays in transaction processing are not completely eliminated. But in some ways, Ethereum is actually superior to bitcoin.


Ethereum Classic (ETC)

Cryptocurrency trading Ethereum Classic.

Ethereum classic is another version of Ethereum that is competing with the first using the same blockchain structure. The two currencies split because of a hack that happened several years ago.


Ripple (XRP)

Cryptocurrency trading Ripple.

Ripple is one of the most exciting new currencies that comes along.
This is a coin that can definitely make someone rich if they were to invest in it and get lucky. Ripple is somewhere after Ethereum in the market and has a cap of more than $12.4 billion; and it is likely to go a great deal higher. There is one disadvantage with Ripple that the other currencies do not suffer from. Because of it is actually centralized and run by a couple of big banks. However, many people see this as an advantage instead, because it will inspire trust.


Golem (GNT)

Cryptocurrency trading Golem.

This project is based on the Ethereum blockchain and it helps to distribute collected computing processing power to a wide network economy. In other words, it has the potential to create an enormously powerful supercomputer. This is a project with great potential and can be a vehicle to making a great deal of money. 


Trading Bitcoin vs. Bitcoin Investing


There are some differences between actually trading Bitcoin as a source of income and investing in Bitcoin. The two are similar but do have some distinct differences.

When you invest in Bitcoin, you are investing in a long-range project with the hope that it will continue to grow even more than it already has. It is unlikely to grow by 10,000% (as it did from its creation to the current numbers) but it certainly will continue to grow at a steady rate. Investing in Bitcoin should come with diversifying your profile portfolio, hedging your risks and other investment strategies.

It says that Bitcoin trading is intended for the short term. Bitcoin investors stay in the trade for a few months, and sometimes for no longer than a few hours, in order to make small gains. Bitcoin Traders look for the lowest price that they can possibly get. Thereafter waits until the currency has achieved the highest price that they think they are apt to get in the near future. If their position is not showing a profit, many of these traders will exit immediately, cutting their losses.