Cryptocurrency trading tips and tricks
Each exchange offers different commission rates and fee structures. As a day trader making a high volume of trades, just a marginal difference in rates can seriously cut into profits. There are three main fees to compare:. Do the maths, read reviews and trial the exchange and software first. Coinbase is widely regarded as one of the most trusted exchanges, but trading cryptocurrency on Bittrex is also a sensible choice. IO, Coinmama, Kraken and Bitstamp are other popular options.
Before you choose a broker and trial different platforms, there are a few straightforward things to get your head around first. Understanding and accepting these three things will give you the best chance of succeeding when you step into the trading arena. Below is an example of a straightforward cryptocurrency strategy. This straightforward strategy simply requires vigilance. A correction is simply when candles or price bars overlap.
You should see lots of overlap. This tells you there is a substantial chance the price is going to continue into the trend. You should then sell when the first candle moved below the contracting range of the previous several candles, and you could place a stop at the most recent minor swing high.
Even with the right broker, software, capital and strategy, there are a number of general tips that can help increase your profit margin and minimise losses.
Below are some useful cryptocurrency tips to bear in mind. Short-term cryptocurrencies are extremely sensitive to relevant news. When news such as government regulations or the hacking of a cryptocurrency exchange comes through, prices tend to plummet. Analyse historical price charts to identify telling patterns.
History has a habit of repeating itself, so if you can hone in on a pattern you may be able to predict future price movements, giving you the edge you need to turn an intraday profit. For more details on identifying and using patterns, see here.
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. The more accurate your predictions, the greater your chances for profit. If you anticipate a particular price shift, trading on margin will enable you to borrow money to increase your potential profit if your prediction materialises. Exchanges have different margin requirements and offer varying rates, so doing your homework first is advisable.
Bitfinex and Huobi are two of the more popular margin platforms. The digital market is relatively new, so countries and governments are scrambling to bring in cryptocurrency taxes and rules to regulate these new currencies. Many governments are unsure of what to class cryptocurrencies as, currency or property. S in 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 On top of the possibility of complicated reporting procedures, new regulations can also impact your tax obligations. Each countries cryptocurrency tax requirements are different, and many will change as they adapt to the evolving market.
There are two benefits to this. Firstly, it will save you serious time. Trade execution speeds should also be enhanced as no manual inputting will be needed. Do your homework, check the Bitcoin Forums, but even then, they can rip you, rob you and leave you high and dry.
A recent development is so called 'Cloud Mining'. Recently, cloud mining has become almost impossible to return a profit ROI or Return on investment as the altcoin market which led to the rise in cloudmining has virtually imploded.
The price crash and sheer number of these altcoins has diluted this market to the point that it is now unprofitable. Other Mining pitfalls include Equipment that you buy, but never arrives - Preorder at your peril. If you're after a quick profit though, mining isn't for you. You can still achieve a steady return from mining, but it may cost you more than you can get back. Do it for the fun factor, like a great many people, who just want to be involved.
A lot of mining scam sites are just 'clones' of legitimate operators, and these sites produce strikingly similar websites, but don't have any equipment to back it - up.
Ask the site for proof of genuine mining if you aren't sure. There are a few well established exchanges. Depending which Country or Jurisdiction you are in will dictate which of these exchanges are available to you, in order to convert FIAT Currency dollars pounds etc directly into Bitcoin or Litecoin, and back again.
The same constraints are currently not applicable to the Cryptocurrencies themselves. They can be freely traded on a great many exchanges. The biggest danger to your funds in any exchange is probably internal fraud.
The now infamous Mt. Gox is almost certainly an example of internal fraud. The lesson that we learned from Mt. Don't use an Exchange as a Wallet. When choosing your exchange, read up about it, search it on Google etc. You will be surprised how chatty this community is when it comes to spotting security flaws that may threaten their irreplaceable Bitcoin. Currently, Coinbase, Bitstamp, Xapo and a couple of others are enough for most users.
You can also search for sellers, and Bitcoin 'ATM's' in your vicinity. Pump groups are set up to benefit the one or more people who organise these unashamed and unethical scams. If you aren't 'The Man' or in 'The Clique' - you will be mercilessly fleeced by this pondlife.
They kill off cryptocurrencies with their actions - they are literally killing the goose that lays the golden egg, they are the single biggest threat to cryprocurrencies, and are too dumb, and personally selfish to realise it. If you organise or participate in pumping a coin, then could you please refrain from ever having children.
The person who sets up the ponzi will always get rich - you probably won't. In a Ponzi Scheme - the early investors are paid out by investments from later investors. Every scheme therefore has it's limits and normally will reach a point where new investors dry up and you may be the one to lose out - Take your chances if you like risk.
Will you be the one holding the bag? Most current Ponzi's just fake the logs, and steal your Btc outright. If you don't have up to date antivirus software on your PC, don't enter the Bitcoin World. There are a few exploits that are well documented. A new one is Fake Flash Player exploits. Use CCleaner before you close it down. Do all these and you are reasonably safe from malicious software. Most informed IT people will do all this daily.
For the best level of safety - use Linux, and we also recommend you use a VPN. Your Bitcoin Wallet is like the wallet in your pocket - except in the case of an online wallet such as Blockchain.
Despite what you may read in the Press, no wallet has ever been stolen or hacked from any Blockchain. The security at this organisation sets the standard for online security.
If you use a local wallet like BitcoinQT, or Multibit your wallet is stored locally on your own computer, usually called wallet.
You can copy, move, encrypt and store that wallet offline, Create a paper wallet or on a USB stick etc, and one new startup will even turn it into an audio CD for you.
A sensible approach is to use two wallets at least - one online like Blockchain. Download either wallet at Bitcoin. Best to spread it about a bit until we can all be sure that one wallet or another is totally safe. Hackers are pretty clever and determined, and keyloggers, screenloggers etc are rife. You can stay safe from keyloggers with a password manager like LastPass Mobile wallets are also available for download from Play store Unfortunately, recently there have been reports of Trojans and other exploits contained in Android and smartphone Apps, including malicious code in 'Price Tickers' - so always 'Google' the App before you install it, and check the forums for recommended and suspect apps.
Better still, If you don't need the app, just don't install it. Remember - A weak or duplicated Password is worse than useless!
For now - the best single thing you can do to secure your Bitcoin is to concentrate on: NEVER use the same password on more than one site. You may end up giving a scammer access to all your stuff. So now they have your Bitcoin, and passwords to all your online wallets, exchanges and more!
Always - Check the sites SSL certificate and https before you enter details. Visit this site regularly to check for newly reported scams. Advertise with Anonymous Ads. What is all this stuff So now, you have some Bitcoin You're getting all excited, and it's now a good time to pause and read the rest of this tips section.
Scams, Cons, Ponzi's Badsites, and how to spot them. Mining Bitcoin or Scrypt Coins Mining cryptocurrency doesn't involve a pickaxe, but it does involve expensive equipment, with custom chips, especially designed for solving the complex maths problems required to 'solve' the block of data. The price crash and sheer number of these altcoins has diluted this market to the point that it is now unprofitable Other Mining pitfalls include Equipment that you buy, but never arrives - Preorder at your peril.
Exchanges and Exchangers There are a few well established exchanges. Pump Groups - are Dumb, Selfish and Greedy Scams Pump groups are set up to benefit the one or more people who organise these unashamed and unethical scams. Ponzi's Pyramids and their spin-offs The person who sets up the ponzi will always get rich - you probably won't.
Is there an email address? Send a question - if you get a response - look at the address it is returned from. Ask the site owner to prove their legitimacy - if they won't or can't then it is unwise to send them your Bitcoin. Legitimate Sites, Traders, Exchanges and Schemes have nothing to hide and will be quite happy to prove their legitimacy.
The Golden Rule is always - If you are in any doubt - don't send your Bitcoin. You wouldn't give a total stranger a pile of money if they approached you in the street - would you? So don't do it with your Bitcoin on the Internet either! There are many other Scammers and crooks dreaming up new ways to take your coins, and we intend to make it as hard as possible for them to continue.
We won't be able to stop them all, or even find them all, but in the meantime you can help by not giving your Bitcoin to any site that makes you feel nervous at all. In any case, if a site makes you nervous, email us report badbitcoin. We don't charge for any of our services, so don't be afraid to ask. For the best level of safety - use Linux, and we also recommend you use a VPN Your Bitcoin Wallet is like the wallet in your pocket - except in the case of an online wallet such as Blockchain.
Also, if available on a site you are registered on, use 2FA authentication such as google authenticator. A good alternative to Google Authenticator is Winauth. The simplest solution for password safety - completely FREE and simpler than what you do now, is Lastpass which is free for desktop, but not for the app, or PasswordBox These integrate with your surfing, and add a 2nd level of protection.