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Make Money by Trading Cryptocurrency

With just a few dollars worth of Bitcoin you can start trading cryptocurrencies right now. There are no broker fees, there are no middlemen to deal with, nor really any barriers to entry or red tape. All you need is some percentage of a single Bitcoin. There is no reason not to try it out. If you can accept risking a few dollars, it’s a great way to get into cryptocurrency.

This isn’t to suggest that trading is something that’s easy or effortless. Losing money is an inevitable part of trading and investing, but you can certainly minimize risk and loses with the right strategies. The reality is that if trading were an easy, risk free way to make money, everyone would be a trader. However, if you’re a strategically minded person, patient, and able to research and analyze market trends, you’ll enjoy trading cryptocurrency.

It’s important to learn, but for now, If you’re just interested in trading and investing, having a basic common-sense understanding of business, consumer demand, and economics is enough to give you an edge over other traders (at the moment). Most of the current batch of traders are early cryptocurrency adopters, cryptocurrency “miners,” programmers, and basically people that are more tech savvy than business/market savvy.

They’re focused on small technological innovations that help build hype for a coin in the short term, without giving much thought about how the coin will exist outside of the exchanges and crypto community. This gives you a huge advantage.

There are some exchanges that will let you purchase specific cryptocurrencies for USD, but it’s a better idea to buy Bitcoin first. With some Bitcoin, you can trade into and out of every other cryptocurrency on the market, on every crypto exchange. Remember: you don’t have to buy a whole Bitcoin ($390 as of writing this); you can purchase Bitcoin in fractions known as Satoshis; for example, 500k Satoshis equals 0.005 Bitcoin. The safest, most popular place to purchase Bitcoin is coinbase.com, however you can also go to an exchange that has a USD-BTC pairing to try to trade USD for Bitcoin at a cheaper rate.

The most reliable exchange I’ve found is Bittrex.com. There are other exchanges: some are good, some are bad, some have been shut down already — the Mt. Gox scandal might ring a bell. Some people are discouraged from cryptocurrency altogether when there’s news of an exchange getting shut down or coins being stolen, but I see all of this as a right of passage for any new market that is still in its infancy. I find it very encouraging that most of these shady exchanges have been terminated and their CEOs have been doxxed and sued to hell.

You will usually see smoke before there’s a fire, as long as you pay attention to the news on twitter. Crypto exchanges and businesses are being talked about on twitter. Check in on twitter and crypto forums daily, follow hash tags, see what people are talking about. Information is power, news is power, and rumors are opportunities!

Researching the market is referred to as “fundamental analysis.” By gaining the right information at the right time and understanding how it will interact with the market, it becomes easier to stay predict trends — essentially whether or not a cryptocoin will rise or fall. In addition to fundamental analysis, you also have “technical analysis.” Technical analysis is equally important, but it refers specially to studying charts and finding patters—for example, at a certain price, a coin will fall repeatedly.

Why? Because the people that didn’t cash out during the pump (called “bag holders”) don’t want to sell their coin at the bottom, at a much lower price. It goes without saying that if the price of a coin you’ve bought moves upward quickly, it’s best to cash out, back into Bitcoin. And If it’s a good coin that you want to invest in for the long term, make sure you buy back in after a dump. Sometimes it is better to focus on accumulating good coins rather than making more Bitcoin, because a good coin will always rise again.

That’s how trading is done.