The Definitive Cryptocurrency Trading Guide For Dummies 2020
We’ll be covering
- Where to trade and why
- Where to chart coins
- Types of trades
- Fundamental technical analysis
- Risk management
- Trading concepts that actually work
- Trading terms that you’ll see spoken about
- A FAQ.
(Don’t worry, I’m not going to try and sell you anything)
All these different terms like swing trading, scalping, arbitrage, shorting, funding, contango, leverage, fiat, cold and hot wallets, heiken ashi candles, ichimoku cloud, super guppy, ICO’s, wedges, triangles, supply zones, volume profile, backwardation, perpeutal swap contracts, futures, spot market… the list goes on and on.
This will be a resource to help crypto trading beginners and intermediates navigate the cryptocurrency trading environment with an end goal to help you either make a dollar or avoid losing as much as possible.
First off, you’re going to need an exchange to trade on.
The following exchanges are the ones that I recommend because I personally, and frequently, only ever use them.
This may change however because the exchanges I trade on now aren’t the same ones I traded on last year, and they weren’t the same ones I traded on 2 or 3 years ago. I’ll update these as they change.
There are a lot of shitty exchanges out there with zero liquidity and bad reputations.
None of these exchanges are perfect but they’re the best that are currently on the market.
Where I trade (in order of frequency)
Bybit has proven itself to be a big player in the crypto market. Offering the following derivatives markets:
The benefits of using Bybit:
- 24/7 multiligual live support! Almost the only exchange that does this
- Has some of the best liquidity
- No KYC — Only an email address is required to create an account
- The best trading engine
- Shows PNL in USD and BTC
- Withdrawal 3 times a day
Why do I trade on bybit?
After years of putting up with bitmex’s overload(which has gotten better recently) I made the switch to bybit because it actually works when you need it to. It’s the main derivatives exchange I use to trade bitcoin with leverage for shorter term positions.
Bitmex, the leading derivatives exchange by volume is also another easy choice if you’re looking to trade bitcoin on leverage.
- The most liquidity, easily trade $10,000,000 positions.
- Futures contracts which is good for hedging positions
- No KYC — Only an email address is required to create an account and no limits on withdrawals
- Has never had funds stolen from a hack
Why do I trade on bitmex?
I use bitmex to trade mostly longer term swing positions. I’m very familiar with the layout after using it for almost 3 years now. It’s never been hacked so I feel good about leaving bitcoin on there. It’s also a market leader in bitcoin price and has the most volume and liquidity.
FTX is a good upcoming exchange offering the most innovative products to trade. Their claim to fame was their CEO getting two leaderboard positions on the bitmex leaderboard.
They offer many different altcoin perpetual contracts to trade like LINK-PERP, ALGO-PERP, MATIC-PERP plus some other contracts like SHIT-PERP which is an index of 10 low cap altcoins. No one else is doing this. They also obviously offer BTCUSD swap contracts. Keep in mind these perpetual contracts are ALTCOIN/USD and not ALT/BTC.
- Instant withdrawals
- Free withdrawals
- 101x leverage on almost all products
- Perpetual swap contracts with lots of altcoins
Why do I trade on FTX?
It offers leverage on altcoins. I don’t have to have much of my capital tied up to have a normal size position on an altcoin. They also offer products that you can’t trade anywhere else like the MOVE contracts, which let you speculate on how volatile bitcoin will be. This is so underrated in the market right now. The altcoin pairs that they offer are however against USD. For example, the TRX-PERP is essentially TRX/USD and not TRX/BTC. Big difference!
Binance, one of the most well known exchanges in crypto which has the most liquidity for altcoins. If you’re going to be buying and trading an altcoin it’s likely going to be on binance. Binance offers leverage for altcoins up to 5x, but also non leveraged markets.
You’ll find your typical altcoin investor here.
- Best liquidity for altcoins
- No KYC — Only an email address is required to create an account
- The most altcoin markets
Why do I trade on Binance?
It has the biggest market of altcoins and the most liquidity. I’ll be trading there if I want to buy an altcoin at spot price. Basically every altcoin worth trading or holding onto will be there. However it’s likely that the altcoins with the biggest return (gems) will be on a small exchange that i’m not recommending here for obvious reasons. They also offer leverage on the altcoins/bitcoin pairs up to 5x which is more than enough. While FTX does do this and more, their leverage is against ALT/USD pairs and not ALT/BTC pairs like binance does.
Secondly, now that you’ve found an exchange you’d like to trade on you’re going to need to see the data for that coins price action history on a chart. You don’t want to be blindly buying or selling a coin.
You’ve likely seen charts like this getting around.
Which platform do they use?
Tradingview is the gold standard in charting software, it offers all the charts from the major crypto exchanges like binance, bitmex, bybit and ftx for free.
The free version will likely be enough for you but there’s a paid plan as well for other features like bigger lists, volume profile, more charts per tab, custom time candles like the 3day candle or even a 12min candle, number of saved layouts etc. costs about $15 a month, but if you buy then immediately cancel they’ll automatically make it cheaper for you 😉
Go to tradingview.com and click on ‘Chart’.
Next to find a coins chart in tradingview, type in the coins name or ticker (the ticker is the abbreviated name like eth, trx, btc, eos etc. for your crypto) that you’d like to see in the ‘add symbol’ search bar.
For example we want to see the Ethereum chart;
You can either type in “ethereum” in the add symbol box in the picture above that i’ve pointed to, or, you can type in the coins ticker “eth”.
As you can see, a list of Ethereum charts will drop down.
When you click on the Ethereum chart you’d like to see, it will automatically add into your list as you can see on mine at the bottom.
For this example i’ve used the ETHUSD Bitfinex chart.
From there you’ll click on it and the chart will come up! Done!
Note that in the top left of the chart you can also see the coin that’s laid on the chart and the exchange it’s being traded on.