10 Step Guide for Day Trading Bitcoin, Ethereum and Litecoin

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Aside from writing really cool short stories: I spend the other portion of my free time trading and studying cryptocurrencies. For many months, I fought with myself on how to invest in bitcoin and alt-coins. Trading strategies on gdax entry in cryptocurrency was purchasing a small amount of bitcoin on Coinbase, and trying to sell trading strategies on gdax and buy low on the company's GDAX trading system, which didn't go too well.

GDAX has some good features, but I found it too clunky for daytrading. I was intrigued by Poloniex, and started an account with my Coinbase bitcoin. It was an exciting time for investing. But instead of giving up on cryptocurrency, I decided to diversify. Trading strategies on gdax decided to buy a few recognizable cryptos and hold them. But the ones that were gaining in trading strategies on gdax by Sept were obscure alts. It was like playing whack-a-mole trying to figure out which one would pump next.

I made two good buys with FLO and NAV, but then all the alts started trading strategies on gdax drop by trading strategies on gdax fall, and my account just kept getting smaller. But on the flip side, my investment wouldn't gain in value either. I was in a slump. But I still was not anywhere close to the amount that I felt my investment should be given the time invested.

One reason trading strategies on gdax I would lose money was because of the dips I would let emotion get a hold of me and sell during dips. There is an old adage: When you sell in the red, you are buying out of emotion and fear. When you sell in the green, it is best to accomplish this by setting automatic sell orders. Daytrading a smaller portion of my portfolio also means that I am holding the best coins, which often go through spurts of intense gains.

If you trading strategies on gdax not holding these coins when they initially go off, forget it. I realized that I could save up on the best coins when they dipped or dumped by purchasing a small amount here and there and keeping them in my Poloniex piggy bank! The key switch in my mindset is this: It's really that simple.

I create a list of 30 coins I want to own and set goals of how many I want of each. Most are based on the top 20 on Coinmarketcap. The good coins always bounce back. They bounce back during dips. They bounce back during dumps. They bounce back when BTC rallies for months. And they even bounce back when a major hack occurs, such as ETH. The only time they don't bounce back is if it is NOT a good coin i. The DAO, although a great idea, was dead on arrival.

I may not reach all of them, but its a good start: My investments in these other coins are small and if they get delisted or go down in value there is not much of a loss.

But when they pump, my stops will sell them and I will make a tidy profit. Let the pros short and borrow to form long positions. As a beginner, I succeeded here and there, but the really bad shorts killed my portfolio in the end. My best lend so far was a 2. It was a bit of a surprise, and opened my eyes to the possibilities that I could actually make more lending, especially since I was holding the same coins that Poloniex lends.

And don't get me started on the wonders of a lending bot! I now have much more time to do other things in life, like write! Thanks for reading about my ventures in cryptocurrency. Although I am not an investment counselor and this article is just an autobiographical account, after the FUD lately due trading strategies on gdax DDOS and the uncertainty of ALT coin prices in general this last week, I thought I would put my own story out on investing. Please take a look at my fiction as well!

Comments are appreciated and I will write more about my thoughts on cryptos if you are interested! All images used with their respective creative commons licensing. My 5 New trading strategies steem Created with Sketch. Things didn't begin changing for me until my trading changed with these 5 new strategies. And when they bounce back, they rally higher. This has really been a wise investment! Authors get paid when people like you upvote their post.

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The day I first heard about Bitcoin on Reddit, a friend had also called me to tell me about it. Being 22 years old in New York City is a financial struggle. I sold it all and ditched my plans for a mining rig. My financial situation needed to be stabilized before I could invest in assets based on my philosophical beliefs. Bitcoin stayed in the news over the years. The price went up and down, silk road happened, the legality of it was called into question, exchanges were hacked, and people gained and lost millions of dollars.

Ethereum hit the scene with the promise of using the blockchain for more than just currencies. You could build decentralized apps on top of Ethereum and even new currencies. I wondered if I could take advantage of those swings by buying when the price was low, selling when it was high, and buying back in when the price dipped again.

In the same period I shut down my company, Bitfountain , after running it for 5 years. Bootstrapping my own company gave me an unprecedented amount of freedom. I lived in 4 countries, traveled to many more, and only worked a few hours per day.

However, since the company had run its course, I needed a new source of income. I applied for only one job as a software engineer. It was the kind of job people love - high salary, all the Silicon Valley benefits, friendly team, well funded company, challenging engineering problems. After three rounds of interview they decided not to move forward with me.

I did want it. But I also feared losing my freedom. Gone would be the days where I could spontaneously book a flight to India with no return date. Going through the interview process made the possibility of losing my freedom real. I went into panic mode searching for a way I could make money on my own. At this point I still owned Ethereum and the price was still swinging back and forth. I signed up for two exchanges: I needed Poloniex as well because there were many cryptocurrencies being traded there Altcoins - cryptocurrerncies that are not BTC.

Those are the first two exchanges that I used. Now I use others since each exchange has pros and cons. A live crypto exchange is intimidating at first glance. There are charts and numbers changing at the speed of sight.

I felt overwhelmed but sat through the confusion to try and make sense of what I was looking at. Soon I could see where to place orders to buy and sell, and the charts started to make sense too. As the month went on I spent hours trading.

I made enough to pay my rent, so the possibility of making a living from this was validated. I wanted to formalize my trading knowledge so I could do more than buy low and sell high. There had to be a real strategy to this stuff. I read as many books as I could on trading stocks and foreign exchange markets. I made a lot of mistakes. But eventually I found my rhythm and strategies. For myself, and most crypto traders, the goal is to increase the amount of Bitcoin we own.

For example, right now the price of 1 ETH Ethereum is 0. Another thing I need to make clear is the type of trading I do - day trading. All of my profits are converted back into BTC at the end of each trading day. Again, even though I buy and sell several Altcoins, at the end of the day my net worth is in Bitcoin. There are three reasons for this:. I earn more USD when the price of Bitcoin goes up against the dollar.

Why was it important to clear this up? Several things were on my mind the first time I had to do this. What if I sell my BTC now and the price shoots up tomorrow? Yes, but your bills will be paid.

Sell now so you can pay your rent. You can always hold out for more, but at the same time you are risking a loss. After a few months I got better at trading. I was earning more Bitcoin than I needed to cover my monthly expenses. At the end of the month I sold only what I needed, and kept the rest of my net worth in Bitcoin. Around this time in my trading career it was getting to the point where I could have bought a Tesla or put a down payment on a house by selling my Bitcoin.

Do you sell your Bitcoin to realize your profit in USD? I can live a nice middle class lifestyle in Los Angeles. Or I can drive a flashy car while I rent a crappy apartment in Los Angeles. It all comes down to your values. In fact, if i see a chart like this I almost always ignore it:.

The wild bull runs are hard to find, hard to time properly, and easy to go in the opposite direction where you lose a lot. Those gains are only exciting if you understand how far they can get you. Of course the numbers above assume you trade days per year. Not many people are willing to forego vacation and weekends to work as a full time crypto trader, even with numbers like that.

Not only that but I also let my emotions control my trades. For example, I once purchased Stratis after the price dropped massively. My assumption was that on such a sharp decrease in price, it had to rebound eventually. The price kept diving. I was constantly tuned into that chart waiting for an opportunity to sell back to Bitcoin. Now I have my strategy that I stick to without letting my emotions interfere.

I have a set of coins that I like trading so I only look at those charts. I have patterns and indicators that I look for on those charts so I can quickly flip through them. Within minutes I can set my orders, set alerts on my desired entry and exit prices, and walk away from the computer. As the market cap of crypto increases, be sure that the IRS is going to find out how to get their slice.

And they will look into the past. I am not a tax advisor. This is a simple overview of what I keep in mind as I trade. My accountant handles my taxes, and I advise you to get an accountant to do the same. Keep in mind that this is US-centric. You need to double check if this is the case in your country. The taxable event is when you sell your cryptocurrency for fiat. How much tax you pay depends on how long you were holding the cryptocurrency. Buy crypto with fiat - no tax. Sell crypto for fiat - pay ordinary income tax.

Buy crypto with crypto - unclear, but does not seem to be a taxable event. This is where things get foggy. Consult your advisor, but as far as I know this is a like-kind exchange which is not taxable but must be reported to the IRS. The exchange you use will output all of these transactions so you can hand them to your accountant. The IRS has clarified that a crypto to crypto exchange is not a like-kind exchange.

The profit made from each transaction is taxed. If you are holding a currency for more than a year it is classified as long term capital gains. This is another reason why I like keeping my net worth in Bitcoin. At least not right now. Passive income is great. After you make an initial investment, you mostly sit back and watch the money roll in.

Most cryptocurrencies are mined. You invest in a very strong computer and the electricity to run it, and you are rewarded with crypto for contributing to the network as a node that confirms blockchain transactions.

This is an alternative to mining that does not require vast amounts of electricity. The idea is that you stake the cryptocurrency that you own over a wifi connection. That crypto that you stake is used to validate transactions on the blockchain, and you are rewarded more cryptocurrency for putting the currency you own in the pool.