2019 Investor Guide on How to Make Your First Trades with Cryptocurrency Investments

Congratulations on getting hold of your first volume of Bitcoin. So one of the first objectives you may want to set about for yourself is to swap this for another kind of token should you want to. Either this, or you can make a gamble in buying and selling short for quick profits if you're feeling lucky, or are more experienced.

While you may be thinking that this is only a game for the highly experienced, the reality is that you don't really have to be. There are those that are all too willing to learn lessons and get better over time, or just get acquainted with the very basics on getting started.

Getting To Know Your Exchange Of Choice – From Its Reputation To Registering For An Exchange Account

The world of cryptocurrency trading has surged upward to become an investment phenomenon, becoming one of the most popular forms of investment that we have seen. And while there's a lot of investors willing to just buy and hold, there are plenty of those who are keen to trade digital assets on a daily basis in order to flip and make money on short trading.

Now while we are familiar with this strategy right now, it was far harder to understand this in the past, and it was largely due to the fact that the trustworthiness and reliability of trading platforms were not as well understood. So while that was the climate for platforms in the past, there is a wide range of exchanges with a strong reputation across the world.

For the rank amateur, it is easy to get concerned about where to begin in order to find the right kind of trading platform for you. But realistically speaking,  all that separates you from the right exchange is a Google search or forum-based word of mouth.

Crypto Exchanges – The First Steps

The first step needed in order to begin trading is an account and a verified one at that. As time has gone on, the verification process has steadily allowed for a greater level of security, while preventing unnecessary friction from intruding on an otherwise fast onboarding.

So what does the beginner need to know about this? Well, they need to know that platforms require that a user verify their identity in order to withdraw fiat, as well as increasing the caps for withdrawing, purchasing or depositing crypto/fiat.

Newcomers to the world of digital asset trading should make sure to do the research on the types of verification processes required for getting involved on a particular exchange, while also making sure that it boasts a strong enough reputation.

Best place to start looking? consumer reviews! And while you will get the occasional false review, it is the best place to start looking, and members of the crypto investing world tend to be quite honest about their own experiences.

Once a user has been verified to a certain extent with their crypto exchange of choice (some have a far more extensive validation process than others), you can then get yourself to work investing! Now for otherwise familiar traders, they're often inclined to keep some kind of noncustodial wallet as an ‘off-chain' wallet where they can store specific digital assets with the sole purpose of long-term savings or investment.

In contrast, there's an advantage to storing digital assets on an exchange for the short term, especially for those traders looking to flip assets for short positions and trades. Now while this is an advantage for capitalizing on high or low-value points for selling and buying respectively, there's a certain degree of sovereignty associated with holding your own assets in your own wallet with its own private keys.

The World Of Digital Asset-Based Markets, Wallets, And Orders

So with the trader being fully signed up and subsequently validated by their chosen exchange, now they'll need to get some funds in order to make a start. For those that are already owners of some kind of well known cryptocurrency, this is simplified somewhat. Popular cryptos include Bitcoin Cash, Ethereum or Bitcoin as some.

If you can any of these, then you can simply deposit it into the wallet section of your chosen exchange. There are some exchanges that will give you the power to sell your coins using a chosen fiat. This makes for a very good opportunity to get further acclimated with the exchange's dashboard in order to let you become more efficient at navigating it for future use.

Once you become more familiar with the exchange and use it for more intensive short or long position trading should find out how to activate the two factor authentication system to make sure that there's a higher level of security attached to your account. The added upside to this is that it will allow you to review the extensive line of options available while using the exchange.

For those uninitiated to the machinations of a crypto exchange, they usually consist of several sections such as ‘markets' for the various cryptos, ‘Wallets' for your digital assets, ‘Settings' and ‘Profile,' the latter of which is where you can sort out the earlier mentioned process of validating your account.

Specifically to this section, the ‘Markets' section will bring budding traders to the exchange, where users can see all the cryptocurrencies and fiat pairings that are available for trade, including the various high and low positions open for trade.

Alongside the Markets segment, the Wallets section displays the account users various attached wallets that are available on the exchange. From here, users can deposit, withdraw, store and even send and receive cryptos from different wallets in order to buy and sell them on this exchange.

It is in this section that users will be able to view any outstanding deposits or withdrawals that are outstanding on their account, allowing them to be fully monitored by the user. Ordinarily, exchanges require a confirmation period in order to validate any transactions in order to allow for them to be tradeable by the user.

Along with the previously mentioned segments, the ‘profile' and ‘settings' segments are where users can customise their account with more or less authentication systems such as two-stage authentication, user information, email or further contact information.

It's within this segment that traders can organize pieces of information like passwords, API keys, IP Whitelising, User Interface, along with many other areas. One of the other important factors is that this settings window will show you whether or not the account is validated or not, or to what level it is validated and what that level entails (Kraken is an example of this multi-stage validation).

While there are plenty of order positions to take advantage of while trading on an exchange, there are many times when order will get partially or fully filled. The former occasionally happens when a user bids on a cryptocurrency at a set price, but there aren't enough coins available at the price set in the buy position, meaning that the order would only be partially filled.

It is on this particular occasion that you can purchase at a single time. it's in this particular time that an exchange my be able to fill a quarter or only a percentage of your opened order. In this situation, when more coins are made available over time at a similar price, the exchange will then decide to fulfill your order.

It's within the ‘orders' section of the exchange that you can get a full directory of the transactions and trading history that you've been involved in.

While it can appear to be daunting to place an order on a crypto exchange, whether to buy or sell an asset, the reality is that it's pretty straightforward to do. For example, if you wanted to sell ETH for an equivilant amount of US Dollars, there's a limit or default order type, or a conditional order position.

A limit order refers to a buy or sell position where a conditional order has to be met in order for it to be completed. Now while this is an option, beginners would be better suited to choose a traditional limit setting for their order when making a start on crypto trading.

For the ‘quantity' section, you would enter the amount of cryptocurrency you want to buy or sell. From there, comes the choosing of what kind of value you want to place on the digital asset you intend to buy or sell, and a limit order consists of a number of choices.

Along with the ‘Quantity' and ‘Bid' segments, there is an ‘ask' price that represents the lowest demonstrated price that the digital asset is being sold at, allowing users to use this as the starting point for where they want to sell their asset.  One of the other options open to traders is the ‘last' price, which, as the name suggests, is the price of the last position you opened. Now while this is one of the methods traders can use, users can alter the price to whatever they want, but usually, newcomers to exchanges will simply choose one of these previously mentioned options.

With the completion of this type of order, quantity of it, and price that you intend to buy or sell at, the exchange will show the overall cost of the trade, including the fees involved with the opening of this position. Once the trader decides to open this position, the exchange charges the fee in order to execute the swap and display the position.

Once it has been confirmed that it all looks good, the trader can also set up a ‘time in force' feature, in which the position is set to ‘good until cancelled' by default, or it can be adapted over time to accommodate a specific frame of time.

The markets page will also show users the range of options that are available for specific orders, including features like trading history, specific orders. This page will also show a depth chart for visualizing the traders activity, including an active log of orders completed. This also includes a customizable trading chart showing the performance of each cryptocurrency's performance over time.

So what does this provide? It provides a bit more extensive oversight into the climate and sentiment of the cryptocurrency market, and whether or not it's trading sideways, it's behaving in a bearish or bull-like sentiment as well.

The Metrics – From Charts, Tools, And Indices

Each of these exchanges provides an extensive range of charts and metrics. These depend on the kind of cryptocurrency exchanges that are used by the trader. But these can help the trader get a better understanding of short term or long term market trends for specific cryptocurrencies that are available.

Once a trader has become more better acquainted to these available metrics, this makes it easier to learn how certain digital assets behave over time, making for more profitable trades over time. As a user becomes more comfortable with more challenging charts, they may want to get a better understanding of more technical indicating tools that an exchange may provide.

Examples of these can include Relative Strength Index (RSI), which is responsible for the measurement of both the speed and strength of a market price and its underlying volatilty. This metric can also give traders some more information about whether certain markets are facing a climate of being oversold or overbought.

One of the other metrics which would be useful for traders is the stochastic indicator. This system analyses the markets current state of momentum, while also allowing for the collection of data on a digital asset, from its support levels and resistance to market fluctuations.

One of the other metrics that would be invaluable to a budding trader is the Moving Average Convergence & Divergence tool. This involves the analysis of two moving averages, allowing for it to track a crypto assets momentum over time as well. These three indices will also look similarly situated on a chart.

Any trader will find themselves in a far stronger position as a trader if they are able to learn all about these specific indicators, and it is invaluable to learn all about these moving averages and what kinds of attributes they demonstrate about crypto assets. Charts such as Exponential Moving Averages and Simple Moving Averages can be exceptionally vital metrics in order to get a better understanding of long and short term trends for crypto trading.

Trading moving averages can be affixed to all kinds of data points by developing a trendline of averages. From here, traders can keep an eye on cryptos and modify their trading activity depending on the 50 to 100 or even 200 day averages of specific cryptocurrencies.

These kinds of moving average lines and momentum oscillators come in a wide range of shapes and sizes, with tools such as Bollinger Bands, ATR Bands, including the likes of trailing stops and Fibonacci ratios being some of those chosen analytical tools used in order to better trade on a crypto exchanges.

Even With This Wealth Of Knowledge, You Don't Need a Great Comprehension Of Technical Tools To Understand the Basics Of Trading Cryptocurrencies.

As a complete beginner to the world of cryptocurrencies, learning how to do things like depositing or withdrawing crypto funds, including opening up your very first, if basic trade position, there is a very simple level of information needed in order to make a strong start.

The choice is really up to the trader as to whether they want to open up a noncustodial wallet for long term storage of whichever asset they'd like a longer stake in. The benefit of this is that you can have more control over assets thanks to having possession of your own private keys. And should you ever want to sell assets, all you would need to do is deposit funds into the exchange, which a trader can do at any time.

When it comes to trading cryptocurrencies, it can be a pretty straightforward to make a good start. and after a few times buying and selling digital assets, a beginner can become an experienced one in no time. And, if you are experienced enough, you can use fluctuations in the market in order to make a significant enough profit off long or short-term fluctuations in the market.

For any beginner, coming to grips with using digital assets and moving on to a cryptocurrency exchange and making a number of trades can be the best kind of education a new trader can undergo.

So, here's a quick breakdown of the required items needed in order to register, get validated and get started in the world of trading cryptocurrencies.

  • A valid email, and username & strong password
  • Proof-of-identity; license, state ID, residential address information.
  • Funds; such as a cryptocurrency or fiat deposit.
  • Two-factor authentication (2FA); some exchanges require the use of 2FA platforms.
  • A noncustodial wallet; in addition to an exchange account, it’s good to have a wallet on the side that can store digital assets for long periods of time.
  • Research; The more the better.

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