The Definitive Beginners Guide to Cryptocurrency Trading [2019]
So, what is cryptocurrency? The original cryptocurrency, Bitcoin, was created in 2008 and is simply designed to be a virtual form of money, known as a “payment cryptocurrency”. This is a common feature today in the majority of the 2,000+ cryptocurrencies that have been created.
Since the launch of Bitcoin, however, other cryptocurrencies were developed that could perform different roles. Cryptocurrencies like Ethereum, EOS, and NEO are known as “protocol coins”, and are used to create decentralized applications (DApps) and to also allow other crypto projects to create their cryptocurrency with them.
Many cryptocurrencies perform the role of allowing users to have access to certain features and functionality of a platform. By owning and using some of these “utility tokens”, users can then interact with a platform to gain some form of value.
Other common roles that cryptocurrencies play are “stable coins” (cryptocurrencies that only slightly fluctuate in value), “forked coins” (cryptocurrencies that split from another one and change the way they work) and “privacy coins” (no, Bitcoin isn’t actually as anonymous as you might think, and these coins tackle that).
Soon after the launch of Bitcoin in 2009, a new kind of financial asset was born. However, the cryptocurrency industry (if you could even call it that), was almost unrecognizable compared to how it is today.
For a start, the cost of a single Bitcoin was small… REALLY small. Initially the cost of a single Bitcoin was essentially immeasurable and almost valueless, and only trades of hundreds or thousands of Bitcoin (BTC)s at a time were common.
This was largely because there were only a very small number of people who even knew or cared about Bitcoin. Bitcoin mining could be profitable using a basic laptop, and the reward for mining a single block was 50BTC — 4 times what it is today.
Trading cryptocurrency was done largely between the original pioneers of Bitcoin, until Bitcoin (BTC)Market.com became the first place to trade the new currency in March 2010.
Because of very low liquidity, manipulating the price of Bitcoin was significantly easier than it is in 2019.
Gradually the price of Bitcoin and the number of people trading it increased. Bitcoin (BTC)Markets.com shutdown and was superseded by the infamous Bitcoin exchange, Mt. Gox.
At its peak, 70% of all Bitcoin trades went through Mt. Gox. Trading was relatively simplistic compared to today’s trading platforms, and there was a lack of features such as margin trading and advanced charting.
Security standards were also weak compared to today’s trading platforms, and the cryptocurrency industry in general was significantly more dominated with blackmarket trading than it is today.
In Feb of 2014, Mt. Gox reported to have had 850,000 Bitcoin (BTC)s, with a value at the time of $450 million, stolen from their accounts.
Soon after this the exchange collapsed amidst widespread controversy, and the monopoly that Mt. Gox once held was progressively divided up by a range of new cryptocurrency trading platforms.
Unlike back in the days of Mt. Gox, there are many places to trade cryptocurrencies today.. in fact there are hundreds of different exchanges and brokerages.
There are a wide range of different features offered, and we’ve put together a collection of the best cryptocurrency trading platforms, for different purposes:
Best Place to Trade Cryptocurrency for Beginners:
PrimeXBT
PrimeXBT is our pick for the best cryptocurrency trading platform for beginners because of its high liquidity, superior security, lack of complicated KYC requirements, easy-to-use interface, and selected range of only the most popular cryptocurrencies, as well as featuring step-by-step video tutorials on how to use the platform. Importantly for beginners, PrimeXBT also is known for having some of the best customer support in the industry.
PrimeXBT is a newer and more advanced platform than many of the others in the industry today. We’ve seen a trend over the past few years for an “upgraded” style of trading platform, compared to the basic (and often ugly and hard to use) exchanges of the past.
As well as been known for its robust technological infrastructure, another beneficial factor for crypto traders is PrimeXBT’s room for growth. While the platform is simplistic in design by default, it is highly customizable and features some of the industry’s most advanced trading features — making it fit for even the most experienced traders.
For instance, margin trading with up to 100x leverage on all crypto-assets, access to the world’s leading traditional financial instruments in stocks, commodities, and forex, hundreds of TA indicators, a variety of advanced order types, and multi-screen support for pro traders — all of which is not commonly possible on the majority of other crypto trading platforms.
Best Place to Trade Cryptocurrency for Experts:
Coinbase Pro
Coinbase Pro is our pick for the best crypto trading platform for experts. While Coinbase is a cryptocurrency brokerage, Coinbase Pro is a cryptocurrency exchange where users can buy and sell cryptocurrencies from each other.
Coinbase Pro is considered to be tougher for beginners to learn, but suits those who have had a few years of experience and really understand the complexities of how to successfully trade.
Coinbase Pro has many features like Cold-Storage, Business Accounts and Integrated Wallets. However, beginners be aware that Coinbase Pro’s customer support is known for being quite slow.
Best Place to Trade Cryptocurrency for Algorithmic (Bot) Traders:
Binance
We’ve chosen Binance as the best platform for algorithmic trading (ie. using automated bots) because of its wide range of assets, easy to use API, and solid trading volumes.
Many algorithmic traders use Binance because of the factors mentioned above, and while there are other platforms that crypto algo trading is possible such as Bitfinex and Kraken, they all have drawbacks, where Binance has clearly worked to create a reliable infrastructure for algo traders.
Not only does Binance provide a REST API, but also websockets, which are easy to subscribe to, with the documentation being clear and easy to follow.
Coinmarketcap — The Home of Crypto Data and Listings:
Coinmarketcap is a true mainstay of the cryptocurrency industry, having launched in May 2013, and quickly becoming the go-to place to find the price and volume data for all major cryptocurrencies.
Since its early beginnings, Coinmarketcap now lists over 2,000 different cryptocurrencies, showing data on the top crypto-assets and now being the central hub for monitoring the cryptocurrency industry.
Hardware Wallets — The Best Way to Keep Your Crypto Safe:
Hardware wallets from companies like Trezor and Ledger have gone from being an intriguing accessory, to an essential method for many crypto traders to secure their coins and tokens.
Hardware wallets take the cryptographic keys of different Bitcoin wallets and cryptocurrency wallets, and store them with military-grade encryption on a device that must be physically accessed in order to regain that data.
Covesting Fund Management Module — Profit From the Trades of Experienced Crypto Traders:
The Covesting Module is an innovation that comes out of a collaboration by PrimeXBT and Covesting to allow beginners that don’t have much trading experience to invest into a fund which is managed by an experienced trader with a proven track record.
When an experienced trader can show that they consistently are getting high ROI’s on their trades, many other traders typically join their fund and are able to receive profits on their investments without needing to have a deep knowledge of crypto trading to begin with. It is likewise profitable for the pro trader who increases their earnings with each trader that joins their fund.
Tradingview — High-Quality Cryptocurrency Charting:
Tradingview is a charting platform used for crypto-assets, as well as traditional assets like stocks. Tradingview has been around for a long time, and has built a reputation for having the best charting software available.
This can be useful when doing research on cryptocurrencies, and exploring different options for strategies. With many of the trading platforms we’ve mentioned above, however, they have excellent charting systems as well, and when performing actual trades or monitoring existing trade, using the in-built charting software from the trading platform should suffice.
Block Explorers — For Background Research on Large Crypto Movements:
Block explorers are platforms which are used to gather the details of specific cryptocurrency wallets. For basic trading, block explorers don’t provide much use, apart from checking your own wallet when making and receiving transactions.
But block explorers can be very useful for monitoring large transactions which are made from wallet to wallet, or wallet to an exchange. Historically, large numbers of large transactions have been a tell-tale sign of a change in a major trend that is impending and can be useful when building a strategy.
Shorting after Pumps:
“Pumps” are a term in cryptocurrency markets that describe the price of an asset increasing rapidly over a short period of time and then falling again. This creates a spike in the price of the assets, and can be one of the most profitable price actions when looking at short term strategies.
When the price of a crypto-asset changes rapidly away from the average price path, a concept called “mean reversion” states that it is highly likely that it will return to that mean in many cases.
By waiting for a pump to reach its peak and then shorting that asset, a higher likelihood for a profitable ROI is achievable, and although it is not always the case that a spike in price will be followed by a sharp drop, it is often the case.
Accumulation:
Accumulation is a long term strategy where the goal to simply to accumulate as much of an asset as possible over time. This means that if the price drops, instead of panicking and selling everything, accumulators will buy more, seeing this as just an opportunity.
Because of the long term nature of this strategy, the goal is to build up a large amount over time, and then wait for a bull run to sell for a considerable profit compared to the purchase prices over time.
Leveraging:
Leveraging is a powerful strategy where a size of a trade can be amplified to a multiple of itself, without actually needing that amount of investment.
For example, if you leveraged $1,000 of BTC by 1:10, your trade would represent a trade of $10,000 of BTC. If the price goes up by 10%, it’s like making 10% of a $10,000 trade, instead of $1,000, without needing to spend more than $1,000.
However, leveraging can be very risky as well, and it’s important to learn about risk management prior to diving in to leveraging cryptocurrencies.
Diversification:
Diversification is a strategy that aligns with the idea of not putting all of your eggs in one basket. Diversification is researching many crypto-assets to build a portfolio (or group) of them which complement each other.
By selecting the right group, and optimising the amount of each asset that you hold, the goal is for you to reduce your likelihood of an overall loss across all assets in any situation.
In this cryptocurrency trading guide we’ve tried to explain that while it is important to make the right choices in strategy and where to trade cryptocurrencies, in 2019 there is more opportunity than ever for beginning traders.
In the past, the market was set up in a way that often made it difficult for new traders to learn without weeks of constant research and much trial by error.
Now, there is more information available than ever, and the cryptocurrency trading platforms that are being created today are being built around making it as easy and accessible for beginners as possible.
Published at Mon, 02 Sep 2019 16:19:21 +0000
Bitcoin Pic Of The Moment
Attribution MUST include Link to: Cryptocurrency360.com/
Copy Link to Credit: Cryprocurrency360.com
By Crypto360 on 2018-04-03 20:02:21
