So, you missed the opportunity to invest into Apple stocks in 1980? Or perhaps you missed the infamous Dotcoom boom at 1998-2000s? Or even buying Bitcoin early at 2014 for just nickles? But you are not willing to miss this once in a lifetime opportunity on joining aboard the technology of future.
It is estimated that by 2020 66% of banks will use blockchain tech and by 2021 the blockchain technology market size will be $2.3 billion and grow by 61.5% CAGR.
That’s right, the fundamental technology behind all cryptocurrencies, the blockchain, is getting more and more widespread by the day and at the year of 2018 we are still the early adopters. You want to get a piece of the action but just can’t figure out how to get started? Worry not. Step by step guide on how to trade bitcoins to make money for dummies like myself. I am fairly confident that if even I managed to get started (and actually make 400% return in a month) then anybody could!
Step 1. How to buy Bitcoins
…Or any other cryptocurrencies. The absolute first step is turning our paper money into the money of future and for that we need to sign up to an exchange service that sells cryptocurrencies. I’ve researched all the different options and have come up with the following as the best, most reliable, safe and easiest to use exchanges. But be warned that all of these are currently under very heavy load from the influx of new users and the sites might be a bit slow every now an then.
The best exchanges to buy bitcoin from
- Coinbase (International)
- Kraken (International)
- Bitstamp (International)
- Gemini (USA)
- Coindelta (India)
You don’t need an account at all of these, just choose one. I personally use Coinbase as I find it very easy to use. It’s really as simple as signing up, passing their verification and typing in my credit card details and instantly receive Bitcoin. Please be wary that different exchanges have different verification processes, different sign-up requirements and different transaction times. But all of these above are completely safe and reliable, used by hundreds of thousands people all over the world.
How the process works
- Sign up on an exchange listed above
- Pass their verification process
- Choose your preferred method of depositing (caution: bank wire might take up to 7 days while debit and credit cards tend to process instantly)
- Choose the coin you want to buy for the amount of money you wish to invest
- Wait for the transfer to register and appear on the exchange
And that’s it for now. Let’s proceed to the next step.
Step 2. Joining cryptocurrency trading sites
That’s right after you’ve just gone through the whole hassle of acquiring precious digital currency we now need to join another exchange or a cryptocurrency trading platform. There are a lot of exchanges available but currently, the biggest operators have temporarily closed down their registrations due to a massive influx of new traders, so I very strongly recommend the KuCoin platform as it’s proven to be fast, safe and reliable. If the registerations on that site some how get closed down as well then I recommend BigONE Exchange but that means going through the hassle of verification process again. But luckily they verify very fast. On top of that they have a very good variety of alternative cryptocurrencies (altcoins). Better hurry up before they close their sign-ups as well.
Why you need to join another exchange?
Because the exchanges above, such as Coinbase, are intended to buy digital currencies, not actually trade them.
Step 3. Moving your coins from one exchange to another
Now, no matter what operator you used to buy some bitcoins, you have been provided with an automatically generated address. An address like that has also been generated by your new exchange, KuCoin. Now we need to locate our KuCoin’s address where to send our bitcoins to.
Where to find your Bitcoin deposit address?
I am not going to use screenshots as all exchanges vary but in KuCoin it’s under ‘Assets’ in the top menu. There you can locate Bitcoin and click on ‘deposit’.
The address should look something like this: 1HGLjsbogQ7HrmGk4Vgz2ScyudfQyN4E8h
Send from Coinbase to your exchange but keep in mind this transaction can take a while. Especially if you’re using Bitcoin but to keep this tutorial simple we’ll use Bitcoin as the example. For future cases, it would make much more sense to transfer Ethereum or Litecoin instead because of faster transaction times and lower fees. Always double check your address that you’re sending to is correct.
You can track your transaction real-time in the public blockchain at https://blockexplorer.com/
How long the transaction will take?
For Bitcoin it can take hours. For Litecoin less than 30 minutes and Ethereum usually around 15 minutes.
Step 4. Enter the market. You can use your Bitcoins to buy new cryptocurrencies (but don’t do it, yet!)
Now that the Bitcoin transfer has arrived we are ready to use your trading exchange to buy some coins! You will very likely be very overwhelmed the first moment you see the screen which looks like this:
Now take a deep breath and calm down. This will take a little time to digest but the UI is still relatively simple to digest. You can use the BTC you have to buy any of the currencies listed on the exchange. Different exchanges have different listings of different alternative currencies. Play around the user interface a little and then start researching your crypto.
Step 5. Start doing research on your future investments
At the moment of writing this there are 1384 different cryptocurrencies to potentially invest in so how do you find out what’s good? Well, for starters you can read the rest of my blog but I will link you to some websites that do a good job promoting different cryptocurrencies.
Recommended resources for finding about new potential cryptocurrencies to invest in
Recommended tools to simplify your life and track your investments
Bonus step: Cryptocurrency trading strategy basics
So now that we have the tools to work with, let’s establish some elementary basics that stop you from going instantly broke.
FOMO – Fear Our Missing Out, Don’t invest with your emotions
So, let’s say you read about some really kickass coin on Reddit that everybody seems to be hyping about and you want to get aboard on it right away. You can feel the adrenaline rush and can already imagine the coin reaching the heights of Bitcoin, from 2$ into 17,000$ coin, whoa! But stop! Calm down. This is known as the biggest rookie mistake of all time: fear of missing out. Let me simplify it by the following: by the time you read about it on Reddit and it has hundreds of supporters then that’s a clear signal it’s already too late.
Cryptocurrency trading tips: Buy low, sell high
Don’t buy at all time high
It’s extremely tempting to buy a coin that has made +500% increase in the last week alone but please approach this realistically. Is it likely to grow even another +500%? No, not really. You don’t want to buy at at the peak price.
Don’t sell at loss
Let’s say you’ve made your research and bought into a coin… and it just starts losing in value almost instantly, what do?! Calm down. Cryptocurrencies are extremely volatile and unstable. This is common. If you did your research properly and have belief in the coin then DO NOT PANIC SELL. If you sell at a loss, then how do you expect to make any profit. Trust me, we’ve all fallen for that trap. Just hold…
Diversify your portfolio
A classical investment advice is to diversify your portfolio. Going ‘all-in’ on one coin resembles a lot going to the casino and betting everything on ‘red’. You don’t want to do that. Try to spread your initial investment between 3~6 coins that you have a good feeling about.
Breath, live, embrace the art of reading charts
As a trader, your absolute best buddy is going to be https://coinmarketcap.com and charts. Patern recognition, peak trends, market cap, trading volume are all topics you should Google and read more about.
If it looks too good, then it probably is
There are a lot of coins based on marketing gimmicks and vaporware. Some of them are even at top 100. But beware, do your research, make calm and calculated decisions. Don’t chase +22,000% gains (Like Ripple did in a year) but instead try focusing on just staying on the profit side
Keep a track of your investments and exchange fees
This one is self-explainatory. Keep a track of your finances!
Thank you for reading and please feel free to share this to your friends who might be interested in getting started on trading cryptocurrencies as well! Please leave some feedback (via Twitter or my email email@example.com) in what topics I should go in a little deeper or more detail. Currently, I tried to keep it as simple as possible. And with this guide I think a person will have strong fundamentals to get started. Good luck on your journey!