The RIDICULOUSLY Simple Guide to Start Cryptocurrency Trading For Beginners

Before you get started you might be wondering why trade cryptocurrencies in the first place?…

There are four main reasons why you should consider investing in the cryptocurrencies trade right now.

1. As of 2017, the total valuation of all cryptocurrencies has surpassed $100 billion. As new cryptos are launched and the value of existing ones continues to rise, consider the cryptocurrency market cap in the next 5 years.

Given that this market is barely a decade old, it’s one you want to get into immediately.

2. More businesses are adopting cryptocurrencies as an alternative payment method to fiat (normal) currencies. Why? They’re considered secure, attract low transaction fees and transactions are completed within seconds.

Companies are also creating their own cryptocurrencies and offering them via ICO. If you’re able to buy in and the cryptocurrency value increases then you made a smart investment.

 

3. There are hundreds of cryptocurrencies to choose from. Majority of those being launched are experiencing rapid price increases within months of being released to the public.

Besides cryptocurrencies, companies are using blockchain technology to create new tech products. This shows that this technology is likely to continue being adopted over the next couple of years.

4. Finally, cryptocurrencies can be ultra-volatile. For example, on June 24 2017, the value of Etherum crashed from $319 to 10 cents.

The crash was short lived and the value rebounded within a few hours….

Savvy traders made handsome profits on that day…

Speaking of becoming a savvy trader, let’s get to the beginners guide to cryptocurrency trading.

General Risk Warning! your capital may be at risk

 

Getting started as a cryptocurrency trader

Trading cryptocurrencies is more or less like forex trading. So getting started involves taking similar steps.

1. Open a wallet

Regular currencies are stored in a bank. Cryptocurrencies are a bit different due to the fact that they’re software. They’re stored in what is referred to as a “wallet”.

This is an address on the blockchain. Wallets can take many forms that include apps, online wallets, hardware wallets and paper wallets.

The wallet has a public and private key. The public key uniquely identifies you wallet similar to your PayPal email address. The private key on the other hand is similar to a password.

Opening a wallet is only necessary if you intend to trade in actual cryptocurrencies.

IQ Option offers a better and straightforward alternative through the Open Trading Network platform (OTN). This is a decentralized exchange that’s focused on cryptocurrencies.

It allows you to store all your cryptocurrencies in a single wallet as well as carry out transactions across different blockchains.

New IQ Option account holders are getting free OTN tokens for a limited amount of time now.

2. Open a trading account

The first thing you’ll need is to open a trading account. I would recommend opening one with a regulated broker such as IQ Option or an exchange that offers cryptocurrencies trading.

I would also recommend that your preferred broker has a demo account. IQ Option offers one with a $10000 virtual cash deposit. Demo accounts come in handy when beginner traders want to try out different trading strategies before investing their own cash.

There are literally hundreds of cryptocurrencies available today. However, finding a broker that offers at least 5 of the most popular ones is necessary.

General Risk Warning! your capital may be at risk

Why?

It’s similar to currencies. When a cryptocurrency is popular, it’s very likely that traders are investing in it. You’re therefore almost guaranteed predictable price movements which are necessary if you want to be successful as a trader.

Having several cryptocurrencies to choose from on the other hand doesn’t tie you down to a particular asset. If one cryptocurrency’s performance isn’t great, you can trade in another.

3. Loading your account

Depending on your broker or exchange, you can load your trading account in a number of ways. These will include credit card, bank transfer and eWallet.

4. How to start trading cryptocurrencies

Depending on your broker or exchange, you can start trading cryptocurrencies through three different ways.

A. Buying and selling the cryptocurrencies (buy and hold)

This is the most popular and recommended option for beginner and experienced traders. It’s similar to forex trading. You can buy the cryptocurrency and hold position while its value rises.

Once the value rises to a point where you cover the spread/commission and make a profit, then you can sell.

Alternatively, you can sell your cryptocurrency when its price is at its peak. Then, wait until the price drops to a certain point before buying again.

Why is this strategy recommended?

The volatile nature of cryptocurrencies makes it possible to profit from small price movements. Remember the June 24 Etherum crash and rebound in a few hours?

It’s a good long-term investment strategy especially if you have been following the price movements of one or more cryptocurrencies. Many of the popular cryptocurrencies available today have seen an upward trend since they started being publicly traded.

There is no multiplier on making cryptocurrency purchases. This makes it hard to lose more than you’ve actually invested when purchasing the cryptocurrency.

This trading strategy has three drawbacks.

The spreads are usually higher. This makes it hard to hold position for relatively short periods unless the market changes really fast.

The second drawback is that the only way to maximize profits per trade is buying more of the underlying asset. Your broker is unlikely to offer leverage on trades.

Finally, trade entry might require investing a huge amount of capital. The value of certain cryptos like Bitcoin can exceed $5000 per coin.

B. Cryptocurrency CFDs

If you’ve traded CFDs before, cryptocurrency CFDs work in a similar manner. Instead of buying the cryptocurrency, your job is to speculate on its price movements.

Your profit or loss will depend on how well you predict the price of the crypto to move. As the price moves further (either positively or negatively) from the buy price, the higher your profit or loss.

Why trade cryptocurrency CFDs…?

First, you don’t need to open a wallet to store your cryptocurrency tokens. The reason for this is that you won’t need to buy or sell the actual cryptocurrency you’re trading.

Brokers usually place smaller spreads on cryptocurrency CFDs compared to buying and selling actual cryptos. The lower spreads makes it easier to enter and exit profiting trades within a shorter amount of time.

Brokers will also usually offer leverage (multipliers) to traders. This is a kind of loan which allows you to significantly multiply your profits.

Multipliers however come with certain risk. You can potentially lose more than your invested amount on a single trade.

C. Binary options trading with cryptocurrencies

Although many regulated brokers and exchanges are moving away from digital/binary options, it’s still a viable strategy for cryptocurrency beginners. This strategy takes a different approach compared to the aforementioned two.

With the previous two strategies, your profit or loss is calculated as the difference between the price at trade entry and the price at trade exit. With binary options, your profit or loss is fixed.

That is, you are going to earn a fixed amount depending on how well you speculate the price of the underlying instrument to move.

So, if you’re to receive $100 if the price of Etherum rises in the next 60 seconds it’s what you’ll get regardless of whether the price raises $1 or $300. If the price drops, you’ll lose your invested amount.

Why should you consider this cryptocurrency trading strategy?

You don’t need to open a cryptocurrency wallet to get started. Binary options trading doesn’t require that you own the underlying instrument which in this case might be a $5000 worth Bitcoin.

It’s a good option if you don’t want to hold long positions. Some of the trades can be as short as 15 seconds.

Cryptocurrency binary options have several disadvantages.

The first disadvantage is that many regulators are introducing tough rules to regulate binary options trading. Many brokers are exiting this market in favor of CFDs.

This however doesn’t mean that you cannot find a reputable broker offering cryptocurrency binary options…

Another disadvantage is that the profit you stand to earn is fixed. This is regardless of how high the cryptocurrency’s value increases.

Finally, this cryptocurrency trading strategy largely relies on execution speed. Its therefore not a good long term investment option.

5. Withdrawing your earnings

The process, time and fees incurred when withdrawing your cryptocurrency trading earnings largely depends on your broker. However, you should be able to withdraw earnings as cash (for CFD and binary options traders) and as cryptocurrency to your wallet.

Now that you’ve gone through the essential steps in this cryptocurrency trading guide,

which cryptocurrencies are currently on offer at IQ Option…?

Here’s the complete list.

Bitcoin

This is the most popular cryptocurrency. It was launched in 2009 and constitutes approximately 46% of the total cryptocurrency market capitalization. It’s also the most expensive with one Bitcoin going for over $5000.

Bitcoin Cash

It’s one of the newer cryptocurrencies launched in August 2017. Its popularity is largely attributed to the fact that Bitcoin owners at the time of its launch received an equal amount of Bitcoin Cash coins.

 

Dash

Since its launch in 2014, Dash has evolved into one of the most popular cryptocurrencies. Along the way, it saw its name changed twice (Darkcoin and then XCoin). Its popularity stems from its instant transactions, decentralized governance and private transactions which are major improvements over Bitcoin.

Etherum

This is the second most popular cryptocurrency on the market. Two features have helped propel Etherum to the top 5 cryptocurrencies available today.

The first is smart contracts which provide additional security especially when transactions are carried out between untrusted agents. The second is faster transaction speed compared to Bitcoin.

Etherum Classic

Similar to Bitcoin Cash, Etherum Classic was built based on the success of Etherum.

Litecoin

One of the first “Altcoins” to be developed as a Bitcoin alternative, Litecoin offers faster transactions confirmation and almost zero transaction costs.

 

Ripple

Ripple boasts to be safer, cheaper and offers faster transactions compared to Bitcoin and Etherum. With regard to market capitalization, it’s the third largest.

IOTA

This is a lightweight cryptocurrency specifically optimized for the Internet Of Things.

Besides these eight, other cryptocurrencies you can trade at IQ Option are ZCash, Monero, Santiment and OmiseGo.

Conclusion

Cryptocurrencies no doubt are a part of the world financial future. New cryptocurrencies are being launched each year. However, some such as Bitcoin and Etherum remain heavyweights in terms of market capitalization and popularity.

As more companies and businesses continue to adopt these alternative payment methods, their increase in value is inevitable. And that’s where you come in.

As a cryptocurrency trader, you have the opportunity to make huge profits speculating on their price movements. Getting started is simple and involves the same steps as online FX or CFD trading.

Besides the potential profitability of cryptocurrency trading, it’s worth noting that brokers and exchanges are looking into this market as an alternative to binary options. So right now is the best time to begin your cryptocurrency trading career and start right before other traders join in.

General Risk Warning! your capital may be at risk
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