Bitcoin and Cryptocurrency trading: Complete Guide To Trading Altcoins
Introduction to CryptoCurrency
Today, we will come to know about how we can invest in cryptocurrency and make the tremendous amount of money over a course of a couple of months to a few years. We may have heard about Bitcoin or Litecoin while mentioning of Cryptocurrency and the reason why people are investing insanely in Bitcoins and selling them later on for insane returns. Here we can see the value of one Bitcoin is equal to $ 2866.84, Litecoin ($ 44.65), Ripple equals to $0.183 though its value is small it makes a great difference if one has a thousand Ripples. When we look at the graph of Bitcoin people are making a lot of money in the 7 days duration. From this article, you can learn the complete crypto currencies concepts even if you are new to this subject. In this article, you will get to know how to deals with these currencies, how to buy/sell them or how we can setup an exchange and earn the real money. These articles are just like crypto currency course for dummies. this article will treat the learns as a novice and helps them understand all the concepts they need to know about crypto currencies.
What are CryptoCurrencies
Let’s Go, we’re going to learn more about crypto currencies. If you are new to the world of crypto currencies or terms like Bitcoin or Litecoin etc, it will be a bit confusing initially. This article helps understand the concept bit by bit. From the investment point of view, there is no need to know about how the cryptocurrencies work just like the stock market when we invest in company shares. To have a look at the crypto currency market just enter the website: coinmarketcap.com where we can keep a track of all the currencies. We can see all the different kinds of currencies which are called Alt Coins. It will be a bit confusing when we look at all these types of currencies. Just keep in mind that all these are all online digital currencies that can be traded online. First on the list will be BITCOIN, which is the main digital currency and traded the most in the market of all the other currencies. There is no need to remember all the currencies, just see the name and how much they are worthy of in USD. We can change it’s from USD to the local currencies of different countries. Investing in Digital Currency is very simple and easy. We can learn about various currencies in this course including the main one being Bitcoin. Here we need to focus more on the Bitcoin and no need to worry about other currencies.
Introduction to Bitcoins and AltCoins
Bitcoin is the main currency of all the other alternate digital currencies and most traded currency with other coins. With the Google search, a Bitcoin is defined as “ currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank”. It is more safe and secure way to transfer online without any intervention of a bank. To invest in the digital currency one need not be an expert on the subject, anybody can start the investment like any other kind of investments. When we check with the historical data of Bitcoins,
An investor who may have purchased bitcoins in April 2013, at $100 per Bitcoin purchased 10 Bitcoins, today its value will be worth $10000+ in 2017 August. From the chart, we can see the market for Bitcoins was booming and more countries are accepting the Bitcoins. However, most of the people 90% of the population does not have an idea of what the digital currency (Bitcoin) is. As the time goes on it will not take much to reach to the mainstream people knowing about this concept.
Investing in Bitcoins
What is short term investing?
Two different types of trading that most commonly done in the market exchanges are
(a)short term investment and (b)long term investment
Short term investment is most commonly known type of invest means that means investing (buying something) on a low and after watching the market closely and predicting what is going to happen next or when it will reach the high. The problem with the short term investment is that the investor has to spend a lot of time on the market to take appropriate actions. Also if he is emotional and sees a low which he never expected might sell at the loss. Also to earn a lot of profits in short time investor needs to have a huge amount of money and at times he needs to be prepared to lose that money also. In this situations as opposed to short term investment if an investor has the little amount of money to invest then it is recommended to go for the long term investment. Almost all the Alt currencies follow the similar trends which go up and down as in a case of the DASH a popular currency chart depicted below.
Before going for the short term investment it is recommended that the investor need to do a thorough research of the currencies like who is using them and who is investing in what currencies etc.
What is long term investing?
We saw that short term investment though rewards more require huge investment, more efforts, risky. In a case of long term investment it has a completely different approach, ie anybody can get started in long term investment with its guaranteed returns. Even if the market crashes completely investor needs nothing to worry as he is not bothered to sell the currency. From the chart of RIPPLE below, we can see
That the value goes up and down when its value is low to buy the currency and hold on until the currency value goes up. We see that when currency purchased in Feb and sold after it rose in June the investor could make insane money. We may continuously invest repeatedly on all the lows that may happen in the market, hang on until there is high which gives huge returns. The good thing in long term investment is that the investor can start off slow and it is recommended that every month invest some at the lows of the market. An investor may choose to withdraw some amount while there is any high in the market. Keep holding on to the market is important in the long term investment and sell when it is most rewarding. This type of investment is very safe which involves low-risk level.
The safest way to invest in Online Alt Coins
Here we are going to discuss more long term investment and know about a strategy known as Buying and Holding. Understanding this from coinmarketcap.com where we can see graphs of various currencies are almost the same.
In buying and holding strategy by continuously at regular intervals when the market is low and hold on. Invest in different currencies whenever they are at lows and invest more when there is further low in a particular currency. The good thing about this strategy is that we buy something for cheaper and wait until it goes up and sells it. If any of the currency dies for eg; Monero there is nothing to worry as we have spread our investment across the market. This is safest where we invest in different currencies and if anything bad happens the risk is less we lose all our investment. This strategy is called buying and holding or Buying the Market. When considering this investment keep in mind to make a low investment like 100 bucks a month may be a less or more a month. Over a period of time say a year or couple there will be a good amount of money can be withdrawn. When compared to the short term investment here it is almost guaranteed that we make profits with fewer risk factors. A lot of people do not know about this kind of strategy called Buying the market so we can take advantage of this to earn profits over the time and this is also considered the best strategy to buy cryptocurrencies online.
Buying and Selling
A brief overview of how to buy and sell bit coins
Here we will discuss how we are going to buy or sell bitcoins and have an overview of Coinbase. Coinbase website is basically like a digital wallet where we can buy coins as well as sell them here. We can also transfer bitcoins on to www.Poloniex.com and exchange to all the different currencies available there. We can also transfer the Bitcoin back to the Coinbase where we can sell/buy the bitcoin. It looks complicated how the whole process works but when we do it practically it’s very easy to do.
How to create a Poloniex Account
Poloniex.com is the most popular exchanges available online, though there are other platforms it is the safest and recommendable platforms for exchanges. Creating the account on the website is simply by registering and validating email then start trading. Under Exchange menu, we can find different currencies with their values, graph of the each currency, buy or sell currencies, buy in future options in very simplest ways. We can see all the buy orders and sell orders by other traders along with the notice board with all the notices by Poloniex site. Under the Margin Trading we can trade or buy from other people or we may borrow from them. Under the lending option, we can make use of our bit coins to lend them to others and make money out of them. Under the Balances tab, we can find other option called Transfer balances where we can see all at one like Exchange, Margin, Lending etc. Under Deposits and Withdrawals, it shows the available coins and how much they are worthy of. History under Balances we can see Deposit History, Withdrawal History. Under Orders, we’ll find Open orders.
Going to settings we can an option called TWO-FACTOR AUTHENTICATION where we can actually secure our account which is recommended. It makes use of a Password along with the Code generated on the App that the trader installs on his phone. Even if somebody has the password they still need to have the code to manipulate the account. API KEYS option under settings is for giving access to our account for different transactions. We have the TRADING TIER STATUS setting and LOGIN HISTORY setting where we can see all the IP address where we logged into the account along with CHANGE PASSWORD option for this account.
How to buy Bitcoins off Coinbase
There are many ways we can buy/sell Bitcoins online but it is recommended to do it from a trusted website. One of the trusted websites where we can buy/sell Bitcoins is at www.coinbase.com. Here we need to register by providing our details along with personal identity and verify the account for secured transactions. The Coinbase interface will look like:
Where we call to see the values, prices graphs on the dashboard. Under Buy/Sell option you can buy or sell Bitcoin, Ethereum or Litecoin. We can set the maximum limit of an amount for certain period for buying the currencies so that we cannot buy more than that.
From the above picture, we can see that the maximum limit is set 200 Canadian Dollars (We may increase/ decrease the limit). Also, we can see that when we hit Buy Max for purchasing, it makes use of all the amount for purchasing the Bitcoin, ie 200 CAD worth Bitcoin equals to 0.05727148 BTC. Going to the Dashboard we can see how much worth of Canadian Dollars is 1 Bitcoin along with other information.
After hitting Buy Max, click on Buy Bitcoin Instantly – CA$200 then confirm buying. We can check this by verifying the Bitcoin wallet under Accounts. The next thing we need to do is to transfer to Poloniex account. We can do this by going to Deposits and Withdrawals option on Poloniex account then carefully select the BTC (Bitcoin) and select the option Deposit. That results with a deposit address for sending the currency. We can see the notice warning us not to send other currency to this address. All this looks like the below picture.
Copy the code (deposit address) then go to Coinbase account, under Send/Request option Click Send option where we can paste the deposit address in Recipient field. By double checking, all the things are proper hit Send Funds button.
This lands us to the two step verification process where we actually enter the code sent as SMS to our mobile. Enter the code in the field provided then, hit Confirm. It takes some time to show up the value transferred amount under BALANCES ->Deposits and Withdrawals.
How to trade Bitcoins on Poloniex
After confirming the availability of Bitcoins under BALANCES ->Deposits and Withdrawals, we can make use of it to trade other Alt Coins available in the market place. To do this we should go to Exchange menu and select the Alt Coin that we want to buy with the Bitcoin. Bitcoin is a kind of online currency to trade the Altcoins. To buy a Golem (GNT) click on it in the market place and enter how much GTN you want to buy then hit Buy. Here, to buy 1 GNT we need 0.00010734 BTC as shown in the picture below.
Similarly, we can buy all the other Alt Coins making use of Bitcoin amount we have. It is recommended to invest in different Altcoins regularly to be on safe side. Also, we can sell the GNT to convert the amount into the Bitcoin using the interface similar to buying GNT which is very simple and fast.
How to sell your Bitcoins for US Dollars.
Select the currency that you want to transfer into money then sell it for bitcoins. Transfer this amount to the coinbase.com where you can exchange it for the dollars. For some countries, there will be the different interface for exchanging bitcoins for real money. This will be same as buying process where you need to copy the withdrawal address and enter it into the coinbase to transfer the value into real money that will be deposited bank account associated with the Coinbase (different for other countries). It is recommended to avoid Paypal as there are some glitches in the process exchanging.
An Investment Plan For You to Follow
For a new investor investing into the Bitcoins, it is recommended to start off with the basics. Even though there is no lot of money to invest, we can invest a little amount of money as the digital currency has the potential to reach high as the time passes. A little amount like 100 bucks a month into coins will be beneficial as it is the most powerful investment option. Invest in bit coins when they are cheap and exchange when it goes up or can be traded with the potential Alt Coins that are cheaper at that moment. As the time passes, the values of these Alt coins will definitely go to increase at some point where they can be profitable. This is a good strategy for the long term investment that guarantees some kind of profit.
How to Earn Bitcoins Passively With Margin Lending
We’ll now learn how to earn using the Bitcoin or Alt coins using the Lending section of Poloniex.com website by setting ups a lending account and give people loans, make money. Under the Lending section of Poloniex interface, we can see things like different coins available under My Balances which are transferred to lending account as shown below:
Along with this, we can see Loan Offers where other people are offering loans, Loan Demands where people require loans, My Open Loan Offers which are our loan offers and My Active Loans which are currently active and accepted by other people with the rate we offered and getting us some fee. Mostly the loan offers are for 2 days, as the loan duration completes we earn income in the form of fee. There is no need to worry about whether the fee will be paid or not as Poloniex is a good platform which automates everything perfectly. Sometimes the loans will be active for little durations like 2 hours as people pay them off. Later we can again start the process of setting up of the loan for that currency which is tedious and time-consuming. We can also automate the process of loan account using a tool that we will discuss later.
Introductory to the Poloniex Lending Bot
We know how to setup loan account using the Margin Lending option in Poloniex however, setting this up each time manually means we need to spend a lot of time. To overcome this we can make use of a program called Poloniex Lending Bot which is free of cost though it takes 10 % of what we earn from the loan. Once the loan duration is completed or the person paid off before the actual duration the bot will automatically setup a loan. This means the maximum amount of currency will be in the form of a loan making more money out of this process. The amount it charges (10%) is negligible as we can earn more using this tool than doing it manually. For this tool, we need to enter the website: www.poloniexlendingbot.com and register to create an API key to use in the actual Poloniex account. Documentation will help more for setting up all this with a video walkthrough. There is no need to worry about the bot stealing anything from Poloniex account as the API Key access is limited to the Lending section of Poloniex account. This is an easy way to make part time money using this bot.