How To Trade Digital Coins?

Anyone who is mildly interested in learning about cryptos has been engaged in some sort of trading. When more and more media exposure is accumulating, novices continue to reach the market and get their crypto-pie slices. So, to help these people get into this fascinating business, we’ve developed this Cryptocurrency Trading Guide. In it, we’re going to take you through all the measures for making you a crypto-trader. We’re moving through the following sections:

How to Trade Cryptos: Fiat to Crypto Trading

So, you’ve got some money you want to spend. How are you going to do this? The portals that connect our world to the crypto-worlds are called “exchanges”. There are a lot of exchanges out there, but before you invest in one, there are few things you need to watch out for. Let’s call this a “Exchange Checklist.”

You should do your own research and choose your own exchange, but in this tutorial, we’re going to go with the most popular crypto-exchange, Coinbase. So, let’s start trading now!

Signing up and Starting an Account

A very easy operation. The moment you land on Coinbase.com, just press “Sign Up”. You’re going to see this screen:

Cryptocurrency Trading: create your account

Since you are building your own personal account, create a “Individual” account instead of a “Business” account.

It’s an easy matter of adding in your.

When you’ve adhered to their Terms and Conditions to show that you’re not a robot (if you’re a robot and you’re reading this, then “Hail Skynet!”), you’ve set up an account.

Security and Account Addition

Next up is security and account addition. In this segment, you will need to do the following:

Security and Account Addition

A text message will be sent with a verification code. Put this code in and you’re done.

Security and Account Addition
Security and Account Addition: add your payment method

“Buy” and “Sell” refers to the acquisition and exchange of Bitcoin, Bitcoin Cash, Litecoin, and Ethereum. “Deposit” and “Withdraw” refers to the deposit and withdrawal of credit in your Coinbase wallet. The Coinbase Help Guide will teach you just what you need to do to handle your payment processes. Note: Coinbase no longer accepts credit cards.

How to Begin Trading

Let’s get going now.

You signed up and then set up your account. What precisely are you going to do right now?

You can buy the following coins in Coinbase:

How to Begin Trading

Securing Your Crypto

To secure your cryptocurrency, you will need a wallet. The wallet stores your private key and public address, which lets you store, send and receive cryptos. Even though this should be very obvious to you, let’s take a brief look at what private key and public address means:

Private Key: Allows you the right to access and transfer your money.

Public Address: This is the address where everyone’s going to send you money.

One important point to note before we move on, the public address is the one you’re going to give to others to submit money to you.

Don’t give away your private key. The private key is for you and for you alone. If you give away your private key to strangers, they’ll have access to your money.

Let’s hope we’ve made it clear enough.

Public Address: Send it to everyone.

Private Key: If you send it to everyone, then you’re done.

Alright, let’s move on.

Crypto wallets come in the following 2 categories:

Hot Storage Vs Cold Storage

Before we get straight into them, let’s use an example to help us understand the difference between the two. The hot wallet is like the wallet you’re holding in your coat. It gives you easy access to your currency, but it’s pretty vulnerable.

Cold storage, on the other hand, is much like your bank account. Highly inefficient for day-to-day use, but when you equate the two, it is incredibly safe.

Hot Storage

The wallet that is linked to the internet is referred to as “hot storage.” Examples of hot wallets are as follows:

Before we venture deep in each of these wallets, let’s run over the pros and cons of hot wallets.

Hot Wallet Pros

Soft Wallet Cons

So, now that you have a basic understanding of what a hot wallet is, let’s go over some of the more common forms of hot wallets.

Exchange Wallets

Crypto Exchange Wallets

This is the best wallet you’ll ever make. In fact, if you’ve been following our instructions and built your Coinbase account, then guess what? You’ve already built your wallet for trade!

The advantages are obvious. It’s already connected to your account and gives you fast and convenient access to trading. HOWEVER, it also means that you’re vulnerable to hacking. Note, exchanges are a permanent target for hackers. We’d advise you that you don’t keep a big portion of your cryptos in your exchange wallets, only have as much of it as you need to trade.

Desktop and Mobile Wallets

Desktop and Mobile Wallets for cryptos

Desktop and mobile wallets have become increasingly popular. Mobile wallets provide more protection than exchange wallets. It’s always very easy to set them up. Everything you need to do is open the app from your laptop/desktop and you’re done! MultiBit offers an outstanding wallet to store bitcoins on your laptop.

However, there is a issue with desktop wallets. They’re not the most versatile of the choices. After all, you can’t reach your wallets from any device other than the one you’ve booted from.

That’s why mobile wallets are a pretty convenient choice for more consumers who want versatility. Setting up is as easy as uploading the app to your phone. MyCelium is a very popular mobile wallet for both Android and iOS.

The problem with all these wallets is that they are vulnerable to malware and exploits because they are housed in a computer that is linked to the Internet.

Multisignature Wallets

Multisignature Wallets for cryptocurrencies

Have you ever seen one of those old school safes that need several keys to open? Or what about the treasure chests that need 3 or 4 people to put in their keys and open at the same time?

This will give you an idea of how multisignature wallets or multisig wallets operate. Most ICOs use multi-sig wallets to collect and store their funds. Why should you use multi-sig wallets?

So, how would it work? Let’s take the example of BitGo.

Cold Storage

Though hot wallets give you tremendous accessibility, the fact remains that they’re incredibly unsafe. That’s why it’s more sensible to put much of your money in a cold storage pocket. A cold wallet is absolutely cut off from the internet, which effectively makes it free from hackers and viruses.

Examples of cold storage wallets include:

Once you know how to set up all of the above, let’s consider the pros and cons of cold wallets.

Pros

Cons

So now that it’s taken care of, let’s explain how to set up cold wallets.

How To Trade Cryptocurrency: Cold Storage – Hardware Wallets

How To Trade Cryptocurrency: Cold Storage

Hardware wallets are physical devices in which you can store your cryptocurrencies.

The most growing type of hardware wallets is the USB style advocated by the French business Ledger. The explanation why hardware wallets have become so popular is that they give you cold wallet storage and security capabilities while making transactions stupidly easy and straightforward. Basically, it plays beyond and ignores the greatest drawback of cold wallets.

Hardware Wallet Pros

Hardware Wallet cons

Now that the pros and cons have been dealt with, let’s see how you can set up one! Without a doubt, Trezor and Ledger Nano S are the two most popular hardware wallets in the world.

Trezor

Trezor wallet review

Trezor is a Prague-based company that has made one of the simplest and easiest to use hardware wallets ever. It’s just stupidly easy to use, and the interface is so elegant and compact that you can take it around with you. It is compatible with Windows, Mac, and Linux, so it’s a easy matter of plugging it into your laptop and linking it to one of the following interfaces:

Ledger Nano S

Ledger Nano S wallet review

Next up is Ledger Nano S!

Ledger, a company headquartered in Paris, has offered the crypto-community one of the easiest-to-use, elegant, and most common hardware wallets. They store all the data inside a smartcard that keeps it secure from hackers. It’s a easy matter of plugging it into your desktop and linking it to one of the following interfaces:

Setting it up is pretty easy.

How To Trade Cryptocurrency: Cold Storage – Paper Wallets

It could be argued that paper wallets are the cheapest way to store the cryptos. The concept of a paper wallet is quite straightforward. You set up a wallet offline by following a few basic directions, and then you print out the private and public keys in a sheet of paper. The keys will also be printed in the form of a QR code that you can scan to access your funds.

So, the questions you need to ask now are, do you need a paper wallet?

The short answer… depends.

Are you going to use your funds relatively regularly? Then no, in that case. Paper wallets are going to be a hassle if used like that. It’s easier for you to have a hardware wallet then.

However, if you’re planning to keep your money for a long time, then, without doubt, the paper wallet is the way to go.

There are two paper wallet pages that we would want you to try out:

Walletgenerator:

If you choose to make a paper wallet, then Walletgenerator can give you the best interface to work with, plus the opportunity to make several paper wallets and support 197 different currencies. Some of the big ones they endorse are (in alphabetical order):

You’ll get something like this when you’ve made your wallet here:

Paper wallet for cryptos

You can print this page and file it in a secure spot. Please note that your printer is not attached to the wi-fi network when you do so, to add security.

MyEtherWallet:

If you want a paper wallet that supports Ethereum and Ethereum-based tokens, then MyEtherWallet is the best choice out there.

When you’re finished building the MyEtherWallet, you’ll get the following:

MyEtherWallet for cryptos

Like before, you can print it and archive it in a safe place and, once again, make sure your printer is not attached to the wi-fi.

Restore a cold storage wallet

When you want to get your cryptocurrencies back out of cold storage, you need to import your private key into an acceptable online wallet. Any wallet that allows the import of private keys will work. For most wallets, the method is quick and intuitive. The steps below refer to the use of the Bitcoin Unlimited wallet.

This will upload all the data from your wallet to your online desktop client.

Bear in mind, though, that doing so means that the assets are directly exposed to the hazards of a hot wallet.

How To Trade Cryptocurrency: Crypto-to-Crypto Trading

We know how to make a Coinbase profile and exchange Fiat currency for selected cryptocurrencies.

We also know how to use hot and cold storage wallets to secure our money.

Now, let’s look further into trading to see if we can really use our crypto to sell and buy other cryptos.

To do so, first, we will need to build an account in another exchange, an exchange that allows crypto-to-crypto trading. Majority of the exchanges would only allow you to buy using Bitcoin.

Since Binance is the top crypto-exchange in the world, we’re going to use it as a guide. However, if you find that you’re going to be happier using another platform, then feel free to do so.

Note: Please do your exchange protection and reputation research before creatingyour account. Review Brokers should not be held accountable for whatever damage you may have been caused.

So, let’s start making your account now!

Signing Up

First, just go to binance.com and click on register.

Signup to Binance

All you need to do is enter your email and generate a password. Next up, you’re going to prove that you’re human by solving a jigsaw puzzle. And no, it’s nothing difficult, all you’ve got to do is drag the lever to the right.

Binance puzzle

After that, an email will be sent to you. Press it to be routed to Binance. Now you’re going to have to go through the Safety Risk Notice.

Binance: Safety Risk Notice

When you’ve been through all that you’re going to be led to the dashboard next:

Binance: Referral Program

How to Exchange on Binance

Binance offers a very basic and easy-to-use interface. You will use the following guides to read more about how Binance trading works:

Note: Binance has local tokens of its own called BNB or Binance Coin. BNB helps you to pay the following at reduced rates:

Using BNB, you will get a 50% discount in the first year, which will slowly decline over time.

Binance aside, you should also take a look at the following exchanges. However, do your own snooping aroundbefore you register:

How To Trade Cryptocurrency: Reading the Cryptocurrency Chart

Definitely the most daunting aspect of trading is all the diagrams and lines you’re going to see in exchanges. Most of the time, people don’t even bother reading the images, rather they purchase or sell their crypto at once, taking the recommendation of their peers. So, in this segment, we’re going to go over some common graphs.

The Japanese Candlestick Charts

By far the most common chart out there. If you’ve ever checked an rxchange website, there’s a possibility you’ve seen them before:

Japanese Candlestick Charts

The graph above displays the daily candlestick indicator for BTC/USDT in Binance. What we’re trying to do right now is to help you make sense of those beautiful patterns.

The first thing you’ll find is the red and green candlesticks sitting one after the other. Every candle displays the movement of the asset’s price over a given time period.

Forex candlesticks

Each candle has a body and a few shadows that stick out of it. The body tells you the difference between the opening and closing prices. The shadows remind you how high or how low these opening and closing rates have gone, respectively. In the green candle, the upper shadow is the close price, while the lower shadow is the open price, and vice versa for the red candlesticks.

The beauty of these candlesticks is that they easily tell you just where the economy has turned and let you recognise the various trends that could help you forecast how the economy will behave.

There are many patterns and markers in the candlestick graphs.

How to Trade Cryptocurrency: Relative Strength Index

Relative Strength Index or RSI tests the power and speed of market price fluctuations by comparing the present price of a cryptocurrency to its previous results. This functions by contrasting the amount of recent gains to recent declines to determine whether crypto has been over-purchased or over-sold.

The formula looks like this:

RSI = 100 – (100/(1-RS))

In the above equation, RS is the ratio between the average days the coin was up to the average days the coin was down.

Now, luckily, you don’t have to think about measuring something, because the trade is going to do it for you.

Now, let’s take a look at how the RSI graph looks. We’re going to test the BTC/USDT map from Binance.

Binance RSI graph

We’ll pick “RSI” from the Indicators menu.

When you do so, the blue graph will appear below the candlestick chart.

Candlestick chart at Binance

Bear in mind that we’re testing the daily RSI.

Okay, so there are a few things to keep in mind while we’re testing the RSI chart.

Although RSI is a fairly good predictor, the fact is that it is not resistant to false buying and false selling signals that can be produced by either a big rally or a major decline in the price of crypto. That’s why RSI would be a device that you use along with other metrics to forecast the potential price of a coin.

So, let’s take a look at our RSI graph, particularly in this section:

Binance RSI graph

Around 14 November, BTC/USDT’s RSI reached the undersold field below 30. However, as the market was down, the RSI eventually got up at the end of November, bounced about 30 for a while before it finally got up about 17 December.

You should also look at moving average and Bollinger bands along with RSI.

Where can I trade cryptos?

So now that you know how to get going, let’s see where you can trade cryptocurrency:

How To Trade Cryptocurrency: (BONUS) Helpful tool – CoinMarketCap

Coinmarketcap.com is a very valuable platform for traders who wish to gain insight into the well being of various cryptocurrencies. The website lists all cryptocurrencies by marketcap, which is a clear indicator of the worth.

Helpful tool – CoinMarketCap

The graph in the rightmost column also shows you a perfect measure of how the coin has been doing over time.

Conclusion: How to trade cryptocurrency

And this was the Cryptocurrency Trading Guide. In this tutorial, you’ve learned

We hope this guide is going to be more than enough to get you started on your journey. We truly hope that you have been able to derive enormous benefit from it.