A Beginner’s Guide to Trading Cryptocurrency

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Here is a beginner’s guide to trading Cryptocurrency and holding (Hodl) you were looking for. Bitcoin has shown a lot of volatility lately, and while volatility is what it’s known for, I’m not going to flood you with crypto jargon head-on. 

This comprehensive beginner’s guide carries all you need to know if you’re starting in crypto, and we’ll also tell you what “Buy the Dip” means so you don’t sound like a noob. 

Today’s cryptocurrency market is quite different from what it was a few years ago. Many massive developments have entirely transformed how we look at crypto and how it can be utilized for real-world goods starting with NFTs and NFT stuff in the metaverse!

Here’s everything you need to know about entering the crypto world. In addition to level-one information on cryptocurrency trading and holding, you will find valuable tips and a short glossary of some of the most commonly used crypto terms. 

How to Buy Some Bitcoins (And Other Cryptocurrencies)?

The first thing you might want to know in this beginner’s guide to trading Cryptocurrency is how to purchase this darn Bitcoin or USDT thing, or any other crypto for that matter. The primary platform to buy or sell crypto is a cryptocurrency exchange. There are several options you can go for. Prepare to pay transaction costs when buying crypto from these exchanges. However, there is a trick to reducing them drastically. We will mention it later in this section.

Choosing an Exchange

Most people start with Coinbase or Binance, two of the most popular crypto trading platforms. These exchanges offer a truly convenient and easy way to purchase Bitcoin and Ethereum, USD(T), SOL, or any other crypto you want to buy as long as it’s listed on their platform.

The general rule is that the more convenient the cryptocurrency buying process becomes, the higher the associated fees tend to be. This trend is particularly noticeable with widely used cryptocurrencies such as Bitcoin and Ethereum.

The Common Coins

The most common coins are Bitcoins ($BTC), Ethereum ($ETH), and Solana($SOL). These are easier to get with a Credit card and other fiat currency payment methods. Previously, you could only buy other smaller cryptos with BTC and not with fiat payment options. Exchanges have now made it easier to buy a lot of other smaller cryptocurrencies, or altcoins, with fiat directly.    

Before you buy, I recommend you compare different crypto exchanges and what they offer. For instance, if you’re comparing Binance Vs. Crypto.com or Bitmex vs Bybit, you have to evaluate how they meet your specific needs for a range of factors. Starting your crypto journey on the right foot will go a long way. 

With the advent of stablecoins, it has become much easier to keep your holdings in crypto without having to worry about changes in value. I recommend you transfer your crypto assets to crypto wallets to hold them. 

Wallets? Other Exchanges? What the heck are you talkin’ bout?  Let’s move on!

How to Store Your Coins in a Wallet?

Coins/tokens can be stored in a wallet. They should not be kept on exchanges. Exchanges get hacked way too often, maybe you heard about the Mt.Gox drama in the past. We don’t want that. You always have a public key for receiving coins and a private key that you need to send coins. 

This PRIVATE KEY is for YOUR EYES ONLY. Never share it with anyone – there is no exception to this rule. 

Back to the wallets, there are several concepts for storing your coins.

There are two kinds of wallets:

  • Software wallets, AKA Hot wallets
  • Hardware wallets, AKA Cold storage

You can find the best Crypto wallet in this article.

Hot Wallets

A hot wallet is accessible via the internet, and good examples are a web wallet, an app, or an exchange wallet. If you create for example a Bitcoin wallet on a website, you will get a public key, this key is like an address to which you can send your Bitcoins. This can be shown in public. 

But you should know that these keys can be scanned from the outside. This can reveal the amount of stored coins in that particular wallet to everyone who knows this key.

Here is how hot wallets work. You purchased 2 ETH on Coinbase, and they are now credited to your wallet. Then you want to increase security, so you create a wallet at MyEtherWallet. You don’t need an email address for that and it is confusing that there isn’t an account created like on other websites. There are several ways to protect your account, we pick the Keystore file here.

So the process would be:

  1. Open MyEtherWallet (make sure to be on the actual website), and choose a password.
  2. Download the Keystore / JSON File to your computer.
  3. Now every time you want to log in, you fill in the chosen password from Step 1 and upload the particular file.
  4. For an extra level of security, you delete this file from your computer and just keep it on a USB drive or a vault.

Despite the name “MyEtherWallet” (MEW), you can store all ERC20 tokens there. In other words, every other cryptocurrency on the Ethereum blockchain can be stored on MEW. 

Many coins/tokens have their own web/app/desktop wallets. Check it out for each of them you are going to buy.

A desktop wallet is a program downloaded on your computer. You run it on your machine and store your tokens there. A really good one is Exodus, which can hold many different coins/tokens in one place. Be aware of the possibility of hacked or crashed machines. That said, there’s a wide range of crypto wallets you can choose from to keep your crypto assets safe.

Cold Storages

Cold storage or cold wallets are way more secure than their software counterparts. They’re not connected to the internet and therefore the risk of getting your coins stolen by cybercriminals is much lower. There are several approaches to storing your cryptocurrency offline.

The options:

  • Hardware Wallets
    Hardware Wallets are like advanced USB sticks with a display and several additional security measures. The most popular ones are by LEDGER, which is made in France. The cheapest option is a Ledger Nano S plus for around $79, you can read more about this hardware wallet on their website. Here is a video on how to use a Ledger hardware wallet.
NanoX
  • Paper Wallets
    Paper Wallets are simply pieces containing your public and secret keys. The value of your wallet is stored on the blockchain, connected to your keys. The public key is used to be able to receive transactions, the secret key is needed to open your wallet and send transactions. With a printed piece of paper, you can be sure your coins aren’t lost by a computer crash, a hacker attack, or similar problems.
Paper Wallet
  • USB sticks with the required web wallet files: If you generate a web wallet like with MEW, you can store your JSON file and your passphrase on a USB stick and store it there instead of on a computer that is accessible to the internet and, therefore hackable or could crash.
  • Physical Bitcoins: With a physical Bitcoin, the manufacturer installs a public address and a hidden private key with the coin. It is more of a bearer item. The private key is hidden, so the coin cannot be spent as long as this is granted.

How to Buy Altcoins – What is an Altcoin?

A beginner’s guide to trading Cryptocurrency: Altcoins are all cryptos/tokens other than Bitcoin. Many altcoins have promising projects behind them that support the use of these coins within their respective projects.

One example of such an altcoin is the Internet of People (IoP coin), here you can read an interview with the Internet of People to get an idea. So, now you found a great project you want to invest in – how do you buy them? 

The websites of those projects don’t offer direct purchases of their coins. This is where you need exchanges. Let’s order some altcoins step by step!

Let’s assume you did your research and read this article about holding some coins for some time and want to buy some now. If the altcoin you want to buy is available on a crypto exchange, then buying is as easy as buying BTC. However, if your targeted token is not on exchanges like Binance or Coinbase, you must follow a different route. 

Step 1: Buy BTC 

First, if you need some BTC, UDST or Ether, you can purchase them with your credit card at Binance.

Alternatively, You Can Buy the Altcoin Directly

Once credited, sign up with another exchange that offers the coins you want. In our example, we are purchasing $STEEM, $NEO, or $SYS. If you just want to exchange very fast, you purchase your $Steem at Changelly (here, you could skip step 1; they accept credit cards as well). For $NEO you would sign up at Binance as $NEO pays $GAS for holding (which is another coin, you could simply hold or trade – FREE MONEY).

Many exchanges don’t pay this $GAS out to the users that hold $NEO on the exchange, this is why we choose Binance here as they do it. For $SYS we go with Bittrex, which is the major exchange and market leader. See our Bittrex Guide here for a walkthrough. 

Other big exchanges are Binance, Bitfinex (stay away!), and Kraken (based in Europe). I also have chosen $NEO for this example to make you aware that there is something special at $NEO, as unlike other coins it is not divisible. You can only transfer in whole numbers (plus the transaction fee). If you purchase $NEO also top up with the fees of the exchange you are using. 

If you want to hold 10 $NEO in your wallet, you have to buy 10 NEO plus the withdrawal fees to be able to withdraw 10 NEO; otherwise, your wallet would receive only 9 NEO and the decimals stay in the exchange (and are tradable). Here is some more info about Neon and its wallet:

Step 2: Transfer BTC to Altcoin Exchange

If you still have your $BTC or $ETH in Coinbase or the primary exchange you used to buy the crypto, you want to deposit it to the other exchange that trades your chosen altcoin. You choose what to deposit, let’s say $ETH. 

You will see a cryptic wallet address, which you copy – very precisely, don’t copy whitespaces or anything else just the numbers and letters. Then on Coinbase, you hit the send button and paste this previously copied address. Hit send!

Once the transaction has started, you will get a TXID, a transaction ID, to observe what your transactions do in the blockchain. Please know these transfers are not instant; they need to be confirmed by miners. Binance for example, asks for a minimum of 2 confirmations until your sent amount is available in the exchange. 

Simply copy this TXID and paste it at Etherscan if you want to follow the process. Know that BNB or Ethereum transactions are much faster than Bitcoin transactions. Please be patient and don’t panic. If the wallet address is correct, it will appear sooner or later. 

Please note: These transactions are not reversible – once done, you can’t stop them, and there is nothing like opening a PayPal dispute. You are fully responsible for your transactions.

Step 3: Select Crypto Pair

You will see the sent amount appear in your account. If you send ETH, like in our example, you want to trade on the Ethereum markets. Usually, there are three kinds of markets available: coins against BTC, Coins against ETH, and Coins against USDT. If you want to purchase those $NEO now, you should choose NEO/ETH. 

Step 4: Make the Purchase

When you’re ready to make the trade, order your altcoin.

Step 5: Store Altcoins in the Wallet 

Once you purchase altcoins and intend to hold them, you can use your crypto wallet. We suggest this for larger amounts. However, if you want to sell them quickly once they generate revenue for you, you would like to leave them on the exchange (again, if this is not a risky high amount – as exchanges can get hacked, or – as Coinbase often does – are not accessible due to huge price amounts.

That’s it 🙂

Cryptocurrency Beginner’s Guide: Day Trading or Investing?

A beginner’s guide to trading cryptocurrency: There are two ways you can handle your coins: you can trade them day-to-day or hold them as an investment. The trading volume is an important decision you want to make at the beginning of your venture. Let’s see what the difference is:

How Does Crypto Day Trading Work?

This means you buy different cryptocurrencies and try to sell them at a higher price in a short timeframe. This needs much training and knowledge in technical and fundamental analysis. 

You will need a trading plan. Many coin owners are day trading without even knowing it. It is a bad idea to use Facebook groups, for example, to read about this or that coin, sell at a loss to buy into another coin, and so on. Your funds will be bleeding in the long run.

Crypto signals providers offer much better information and technical analysis. You might want to look into our selected Telegram crypto signal groups, which offer good signals tested by us. 

If you want to get your feet wet and learn to trade in the crypto markets, joining one of our recommended crypto signals groups is a great way to start learning and making healthy profits at the same time! 

Also, an interesting for a trading plan is to learn more about buy and sell walls and financial markets to get some general ideas about trading altcoins. Be aware not to panic once BTC pumps and your altcoins drop.

Investing in the Next Gen Coin

Investing in the next-gen coin is all about research, trusting your instincts, and not panicking! The first step is to research projects and the cryptocurrency they issue. 

If you find something promising, let’s take AVAX as an example, you investigate them more. You research the team, check their website and LinkedIn, and see what kind of reviews and history they have. 

You need to see what they are trying to build, if this is needed in the future and will solve problems, and, last but not least, what their crypto will be used for. Then you purchase it and forget it for some years. 

Don’t check the price all the time, as it goes up and down all the time. Chances are high that you will get stressed once it tanks for some time and sells at a loss. Cryptos are highly volatile, so this will happen. 

You need to trust your instinct and look at the long run. We have our eyes on the long-term, not the ups and downs. 

Cryptocurrency Beginner's Guide

A beginner’s guide to trading Cryptocurrency: What is a Satoshi?

Bitcoin is the largest cryptocurrency and was invented by a mysterious person or a group of persons appearing as Satoshi Nakamoto. A Satoshi, commonly called “sats,” is the smallest unit of a Bitcoin, so it is one hundred millionth of a Bitcoin.

What Does “Sats” Mean?

1 Satoshi = 0.00000001 BTC

100 Satoshis = 0.00000100 BTC

1,000 Satoshis = 0.00001000 BTC

10,000 Satoshis = 0.00010000 BTC

If you want to trade, you should get familiar with it, as you will mostly trade against Bitcoin, and therefore, everything is calculated in Sats. Be sure to stay ahead and always think in dollars so you don’t lose the feeling for the amounts you invest.

Crypto Slang

This glossary is one of the most important parts of our beginner’s guide to trading cryptocurrency. This equips you with the vocabulary and basic understanding of crypto markets.

The more you dig into the rabbit holes, the more strange terms that seem to make no sense will appear. Here is a list, along with a simple explanation. 

Crypto Jargon You Need to Know

  • ALTCOIN: A term to refer to all the smaller cryptocurrencies. Every crypto besides Bitcoin is an altcoin.
  • BAGHOLDER: Someone who bought crypto thought it would soar soon but dropped instead. As you should never sell at a loss, you hold the coin in your bag of coins now until you can sell it with a profit.
  • BEARISH: Bear Market trend when prices go down.
  • BULLISH: Bull Market trend when prices go up.
  • BUY THE DIP: refers to purchasing a digital asset when its price experiences a temporary drop, with the expectation that it will eventually recover and rise, presenting an opportunity for potential gains.
  • DIGITAL CURRENCIES: electronic forms of money that exist only in the digital space, allowing for instantaneous and online transactions.
  • DUMP: When an individual sells a cryptocurrency, they are dumping it. Also, a cryptocurrency dumping in general means a massive selloff so its price drops significantly.
  • DYOR: Short form for “Do Your Research.”
  • FA: Fundamental Analysis
  • FOMO: Fear Of Missing Out. This often happens when the price of a coin increases very much, and you buy in because you fear missing large profits.
  • FUD: Fear Uncertainty & Doubt – someone spreads bad news, so a coin gets dumped.
  • HODL: Acronym for Hold On for Dear Life and means not to sell a certain coin. It first came up in a Bitcointalk thread.
  • MOON: This term means the price of a cryptocurrency is predicted to shoot up very high—one of the most overused words in Crypto.
  • PUMP: A strong upward movement.
  • Shitcoin: A cryptocurrency with no use or that doesn’t have a bright future.
  • TA: Technical Analysis
  • REKT: To get burned with a considerable loss.
  • SWING TRADING: it involves leveraging the typically high volatility of digital assets to capture gains from price fluctuations over a period of days to weeks.
  • TRADING BOT: An automated trading system that uses a machine learning program to automatically create and submit buy and sell orders to a market or exchange.
  • WHALE/S: Market movers that buy-in for unbelievably high sums and therefore manipulate the prices.

Check out another post by us about the use of crypto slang and what is going on in groups and forums. Just to be aware 🙂

10 Advantages of Cryptocurrencies in General

A beginner’s guide to trading cryptocurrency: How much do you know about how today’s market conditions affect ranking good investments? If you want to scrape various cryptocurrencies on exchanges like Poloniex, Bittrex, Bitfinex, Kraken, and others, it’s essential to have the know-how to get the best results. Various strategies can be used for day traders and short-term holders but can apply to any cryptocurrency trading. There are various helpful investment practices/strategies you can use. If you use the right trading strategies you can experience growing up to 2x higher on daily investments.

It’s important to remember that nothing in life is 100%. Like other markets, cryptocurrency markets can be VERY volatile and change quickly. The key is to make safe investments that will help to provide the best results. If you make the best investments, there’s a good chance you can get high returns. However, there will always be some risk so it’s critical to minimize your risk.

Why should you invest in cryptocurrencies, to begin with? They can provide several benefits, including the following ones:

1. Privacy

When you make cryptocurrency transactions, there’s no need to share your identity/location. There’s also no info you have to share with the bank and government about the deal. As a result, it can be said that the investment is 100% decentralized.

2. No limits

In the case of using cryptocurrencies for transactions, there are no boundaries. For example, the sender and receiver can be in different parts of the world, but you can still transfer funds without issues. In addition, transactions between countries are very easy in the case of crypto since no central bank controls the market.

3. No chargebacks

After making the payment, you can’t charge back. This greatly lowers the chance of fraud, which is critical. After the transfer is complete, it can’t be reversed. Unlike credit cards, you can’t file a chargeback. There are drawbacks, but there can also be advantages as well.

4. Lower costs

It’s costly to transfer funds by suing other banks/forums, and it is very pricey since they can charge big fees for each transaction. There’s also the fact that companies that process credit cards charge high fees.

However, the situation is different with cryptocurrency. That’s because the costs are very low or there are no costs at all. In the case of credit/debit cards, the seller pays the fees. However, in the case of crypto-currencies, the buyer pays a small fee.

5. No third party involved

You’re in charge of your money in the case of cryptocurrencies. You can keep it in your digital wallet and use it as you want. There’s no third party involved so you don’t have to trust organizations like banks.

6. Personal information is safe

In the case of crypto-currencies, people can’t steal personal info from merchants. This results in sensitive data being private. If you create a proxy ID you can be assured that nobody knows anything about you. This is a plus.

7. High Security

All the transactions are super secure since they use cryptography created by the NSA. It’s almost impossible for anyone other than the e-wallet owner to make payments using your wallet. The exception is if they’re hacked. The good news is there are several methods to protect yourself from them. It’s important to learn the different methods so you can use them.

8. Stay anonymous

Some coins can help you remain anonymous. However, it’s often believed that all of them can, but it’s not true. In the case of Bitcoin, it’s “pseudonymous” since people will never know your identity on the blockchain precisely. However, I can get some info from it. This is something to keep in mind.

9. Fast/easy payments

It’s quite easy to make payments via cryptocurrency. You can do it in a couple of seconds. It’s quite fast since you don’t need to input several details or even enter details for debit cards or credit cards. All you need is the digital wallet address of the person/company you want to send a payment.

The amount is credited to the receiver in a couple of seconds/minutes based on the type of digital currency you’re investing in. The process is quite easy, and it’s one of the main benefits of this type of investment. It’s a plus over other types of investments that are more complex. That’s why this is one of the best options if you’re looking for new investments.

10. Easy access

Cryptocurrencies are already available to the general public. Nearly anyone can use it. It’s a operation decentralized, and investors worldwide have access to them. Several projects are using cryptocurrency to raise funds. Nearly everyone who can make fund transfers using the Internet can join such projects.

This is a critical issue because it’s quite easy to get involved in crypto-currencies. This differs from other types of investments that are very difficult to start based on factors like how much capital you have to invest, the experience you have investing, etc.

The beginner’s guide to trading Cryptocurrency: 5 Rules to Follow Once You Get in Touch with Crypto

1. Invest Based on Risk Tolerance

Take time to figure out your risk tolerance and assess how much risk you’re willing to take. In some situations, crypto traders are willing to take big risks; in others, it’s not the strategy they want to use. It’s about how much of a gamble you’re willing to take. Remember that you can’t make big earnings quickly unless you are willing to take significant risks. So it’s an important issue to consider.

2. Keep Your Crypto Assets Safe

This is another step to consider to get the best results. There are several online resources where you can find helpful information about how to do that. The key is to do your research so you’ll know which steps to take. If you take the best steps, you can be assured your coins will be safe, which can help give you peace of mind. As always, it’s critical to protect your investments.

3. Buy Crypto Now

If you purchased Bitcoin a decade ago, you certainly made a good investment. However, if you didn’t do that, you should still consider doing it now. That’s because you can still make some big earnings in crypto. However, the key is to get started as soon as possible. This will help get you on track in terms of your crypto revenue. However, if you put it off, then it could mean you’ll miss out. This is no financial advice, and we are no financial advisors.

 4. Invest in what You Can Lose

It’s important not to invest more than you can realistically afford to lose. This situation is like many other types of investments. It’s critical not to make huge investments when you can’t afford to experience big losses. On the other hand, if you can afford major losses, it might be worth increasing your trading volume and taking the risk of making investments that include big amounts of coins. This requires some number crunching to determine what you can afford to invest/lose.

5. Do Your Own Research

This is important to ensure you’ll get the latest information you can trust. Meanwhile, if you get the info from third-party sources, there’s a greater chance the info isn’t true. That’s a situation you’ll want to avoid. You can do that by doing extra research. DYOR!

Final Words

The key is to know about the current market conditions and invest in using common sense. The goal of this beginner’s guide to trading Cryptocurrency is to help you get started, but remember that this is a learning process, and if you’re a newbie, you’ll quickly get used to everything. This is especially true when your portfolio shrinks, and you must determine which tweaks you should consider.

Many investors make trading decisions based on price movements. This can cost you a lot of money, so it’s a situation you’ll want to avoid. However, if you read order books and do your homework about crypto trading strategies, you can start making better investments. This can help to improve your portfolio.

The good news is there’s a lot of information online and advice you can access that will help you make decisions when investing in cryptocurrencies. That’s the ultimate goal, but you have to be very careful. Always keep in mind: Crypto = Wild West! The particular advice/recommendations aren’t as important as getting the desired results.

We hope we have given you everything you need to know in our beginner’s guide to trading cryptocurrency. Of course, there is so much more to learn, but this should give you a first impression of the much-needed basics. Please feel free to ask your questions in the comments field below. We will try to answer you quickly.

Enjoy Trading. Enjoy Crypto, Live Life!

Disclaimer

This article is for educational purposes only. We are no financial advisors. The information provided from SmartOptions is for informational purposes only. It should not be considered legal or financial advice. You should consult with a financial advisor or other professional to find out what may be best for your individual needs and risk tolerance.

Please do your own research and never let anyone trade your account for you. We do not support or advertise Fund Management in any kind of manner. We solely review signal providers, their work/analysis/provided education. Please read this disclaimer and leave the website if you disagree with it.

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Ahad Waseem
Ahad Waseem
A linguistic engineer who writes to solve problems. Ahad is a cybersecurity, blockchain, and business writer who often takes on art, politics, and economics too. He’s written for various crypto publications and trades cryptocurrency too. When he’s not writing, he’s probably on horseback, caring for his houseplants, or training Bonsai trees.