Entering the cryptocurrency world – the experiences (and tips) from a new trader – Volume 1

I like to think I am a tech savvy guy and compared to most people around me I am. So, entering into the world of cryptocurrency wasn’t a scary idea. I endeavored to learn as much as possible and use this knowledge to make some money on the exchanges. After a few weeks of trading I have quickly experienced both nice gains and terrible falls. I have dabbled a little in various crypto and in doing so I have learned a lot about trading, finance and myself. I would like to use this opportunity to pass some of my experiences, wins and mistakes onto others so they hopefully can learn and do better.

For you to be reading this, it would probably mean you are already in a similar position to me. Steemit isn’t exactly well known outside the crypto community (I hope to help change this). One thing that is clear when entering this new online community is that there are LOTS of opinionated people all with varying ideas and mindsets on how to make cryptocurrency trading work. Now I shall add to this community by giving you a play by play of my experience and what worked / didn’t work for me.

1) Setting everything up right and securely from the start

Exchanges:

After a fair bit of time researching I finally made a move into the market. As I live in Australia, I first had to find an exchange where I could buy Bitcoin (BTC) with Australian Dollars (AUD). For any Australians thinking of doing so, there are two options.

BTCMarkets and Independent Reserve

I went with Independent Reserve after researching the costs involved with both exchanges.

Mistake #1: I since realised BTCMarkets has a larger volume, it generally has better conversion (Buy / Sell) prices and more movement. (It is decentralised, so different exchanges have different buy and sell amounts).
Mistake #2: I was eager to jump in and did not even look at the value of BTC/AUD. (Wait for a dip before moving in – there is no need to be in a rush)
Mistake #3: I bought at market instead of placing a bid. Watch the movement in value and try to buy at the cheapest possible price point. (It may not seem like much, but every little bit makes a difference in the long run. Buying at market will buy at the lowest asking price at any given time)

I also bought Bitcoin and did not really know whether the likes of Etherium, Litecoin or some other available crypto were worth exchanging for my cash. From my experience, I would still recommend BTC as the entry coin, however I know the other currencies have their benefits (such as Etherium for certain initial coin offerings and Litecoin for fast processing).

Tip #1: Make sure you are at the correct URL for the exchange
Tip #2: Set up two-part authentication (I use Google Authenticator).
Tip #3: There are multiple passwords, API and address codes you will need to keep securely (Set up a process of how you will do this). You have a lot to lose if you don’t get this organized.
Tip #4: Only ever use your login yourself and only log in directly at the URL of the exchange (anything else will be a phishing scam)

Researching the different exchanges to trade on was the next step. I found that the following were probably the best to cover most (if not all) of the cryptocurrencies you may want to invest in.

Bittrex, Poloniex and Bitfinex.

I decided to only use Bittrex at first and it seems to be the safest and most accessible of the large exchanges. I later created accounts with Bitfinex and Poloniex, but I hear of people having issues with Poloniex (usually errors and delays). At the moment, I mostly use Bittrex and only use the other exchanges if they have a listing I want to invest in that isn’t listed on Bittrex.

Tip #5: Stick to more reputable exchanges to avoid having your money stolen
Tip #6: If you plan to both invest long-term and trade short-term, consider using Bittrex for long term investments and Poloniex for your day trading. This will remove temptations and make it easier to calculate your return on investments.

Mistake #4: Don’t think you have to use multiple exchanges. Keep in mind transferring funds between exchanges incurs an expense. Don’t just transfer into another exchange without considering the costs and potential benefits of doing so.

Moving crypto between exchanges

In my case, I had to transfer my BTC from Independent Reserve to Bittrex. This was actually harder than I thought (mostly due to being worried about sending BTC incorrectly). Once you figure it out, its actually straight forward. To move crypto from one exchange to another, you first need to get an address from the exchange that will receive the crypto. You do this by logging into the exchange and finding the deposit section (+) and it will tell you an address (You may need to verify your account to a certain level before you can do this). Copy this address for using on the other exchange. At the other exchange site (the one you are transferring from) you will have to go to the withdrawal (-) section and it will ask you to enter in the address of the destination. Copy the address into this and choose how much you want to transfer and then process the request. Simple.. as.. that.. Though it may take a while to process, so be patient. You are now (almost) ready to start trading.

Trading

Trading can be done in two different ways. Via the exchange directly (e.g. on the Bittrex website) or through a third-party software (e.g. Coinigy (Web App)). Coinigy has a 30-day trial and is by far the easiest platform to learn how to trade on. I personally used it for the trial and decided not to take up a subscription (at the moment at least) as I found at times it was frustrating to use as the charts would occasionally freeze (this is probably more an issue on my end). The advantage of Coinigy, is it allows you to monitor and buy/sell across a number of exchanges all from the one interface. It also has excellent built in tools for analysing charts and setting up alerts.

To set up Coinigy with your exchange accounts requires setting up API addresses on the exchanges and entering these into your Coinigy account. All of this is usually found in the “Account” section of each website.

Tip #7: Get your permissions right when you set up your API. e.g. If it is just a wallet for transferring funds into, then make sure Coinigy can’t withdraw from it. Each exchange has its own way of setting permissions.
When this is set up correct, Coinigy will show the balances you have in your exchange. At this point you are ready to start trading.

In the next volume, I will discuss my first buying and selling experiences as well as my first steps into analysing charts. Eventually in future volumes I will cover everything including:

Finding where to get reliable information
How to try and cut through the hype and bulls#!t that can be found EVERYWHERE
Self-control and stopping FOMO from ruining your gains
Setting goals and COMMITTING to it – Having a clear strategy
What can be learned from trading groups (mostly found on Telegram – Also WTF is Telegram)
What is the go with Whales, Pump and Dumps, ICOs and other things I hear about
Simple strategies to incorporate to minimise risks
Diversifying and portfolio creation

The above topics are basically my journey (in order) to where I am now. A lot of mistakes and a lot of learning along the way, but I am not worse off for it (yet). I learned a lot about trading and my own personal traits and shortcomings and I would recommend trying out cryptocurrency trading (obviously only with what you are willing to lose). If you really commit the time to figuring it out it can be an illuminating experience.

About myself

I am a youngish fitness professional (personal trainer), math/science teacher and tax and business advisory accountant, entrepreneur and most recently a cryptocurrency trader. An enthusiast techy and PC super race gamer, a life long learner with many and various interests. I feel I have a lot of knowledge and experiences to share and finally a platform I want to share it on. Expect posts like this and many on my other activities / interests.

All feedback and advice is welcome.