~ LUCK'Y CRYPTO GUIDE FOR BEGINNERS ~ PART SIX ~ WHAT IS CRYPTO TRADING? ~

terminallyill (54) in cryptocurrency • 7 years ago (edited)

LUCKY'S CRYPTO GUIDE FOR BEGINNERS

PART SIX

WHAT IS CRYPTO TRADING?

Welcome to the sixth installment of Lucky's Crypto Guide For Beginners, where my aim is to take the average person with no prior knowledge in cryptocurrency and mold them into a crypto trading machine through the application of well built and easy to understand tutorials. So far this series has been a success, in my eyes anyway, thanks to each and every one of you who has taken the time to read my material. Today, I am going to scratch the briefly surface on the subject in which these tutorials have been constructed around, crypto trading. Today, you will learn what exactly crypto trading is and how it works. Though I'm not going to go very deep into the subject in this article, be advised there will be a compilation of future lessons dedicated to just this one subject. Properly equipping yourself may take some time and effort on your end, but these "baby steps" will provide you with the understanding and tools you will need in order to successfully trade within one of the biggest equity building phenomena of our lives, the cryptocurrency trading market.

WHAT EXACTLY IS CRYPTOCURRENCY TRADING?

Cryptocurrency trading is by far one of the most financially profitable, exciting, risk involved opportunities standing right in front of your face. It is the act of taking your traditional FIAT currency (money like the euro or US dollar) and using it to buy cryptocurrencies such as Bitcoin or Ethereum. It is also the act of buying and selling individual cryptocurrencies (digital currencies) in one of the many marketplaces (exchanges) across the world. Crypto trading derives from the same basic structure and principles that the FOREX market (FIAT currency market) and the stock market (NASDAQ for example) flourish from. The prime difference between a crypto trading market and a stock market or forex market is the essentially the product traded. Crypto markets buy and sell cryptocurrencies whereas forex markets buy and sell traditional currency and stock markets buy and sell company stakes/shares.

The beautiful thing about trading in the crypto world is that it is open to the entirety of the modern world through the use of the world wide web. This means anybody, anywhere, with a way to pay for cryptocurrency can access the internet and join an exchange (crypto marketplace), making them now able to buy and sell crypto. This opens the world of investing to people who normally never have the opportunity or that could not afford typical buy ins (investment costs) for traditional markets. I have personally seen people go into a crypto exchange with $100 and leave with $5,000. On that same note, I have watched some go in with $5,000 and leave with $100. Your success or failure really rides on your research, knowledge, patience and most of all, the tools that you utilize and bring to the table when trading.

Before I go much further, I am going to share an idea with you that most people do not know or recognize. There is a clear difference between crypto trading and crypto investing. Crypto trading is geared more towards acting on the impulses of the here and now, making the market a volatile, yet profitable ground for someone to come in and immediately begin seeing substantial profits or losses. Crypto investing is geared more towards the the idea of future gains, making coin holders that are invested in the company buckle up and settle in for a long term relationship. Understanding the difference between these two terms is often the key in deciding which approach fits your budget, personality and skill set. The more you know, the more you grow!

HOW DOES CRYPTO TRADING WORK?

Though crypto trading appears to be a daunting experience, once you gain insight and understanding, it is rather easy to get involved in. It is broken down into two different phases to help in clarity and differentiation. Learning the difference between these two is imperative to your progress in the crypto world

PHASE ONE - USING FIAT CURRENCY TO BUY BASE CRYPTOCURRENCY

This is the first phase of the process and is the only phase you need to complete IF you are content with solely purchasing a base cryptocurrency to trade with. Being traditional currency is not able to be traded freely on 95% of the crypto markets available today, most traders have to rely on trading in their FIAT funds for crypto funds. This process is essential for anyone looking to either invest in or trade crypto. To break this down even more I am going to define a base cryptocurrency and explain the process briefly.

A base cryptocurrency is a main currency used in crypto exchanges (and the crypto world) to acquire various other forms of cryptocurrency. Base cryptocurrencies or "coins" typically are Bitcoin, Ethereum and Litecoin and alternative currencies typically are coins such as IOTA, BCPT, XMR (and many more). Certain exchanges use their own token as a means of creating their own "micro-economy", making alternative currencies such as the BNB Token and the KuCoin also a form of base cryptocurrencies I have branded as "sub-base coins". Typically a base coin has it's own market in an exchange, meaning it will have hundreds of other coins available to be purchased WITH the use of this base coin. In example, an individual can buy 100 IOTA with the Bitcoin in their account (or any base coin), however they cannot buy this IOTA with traditional currency or with another alternative currency.

Basically, an individual would register an account with an exchange (crypto marketplace) and then proceed to take their traditional money (such as the US dollar) to purchase a quantity of a base coin (such as Bitcoin). The base crypto which was just purchased with your USD is now ready to be used to your liking. With this Bitcoin, you can either "hold" it, waiting for gains, or "trade" it for one of thousands of other existing cryptocurrencies in hopes of faster, larger profits. Proceed to Phase Two if you are interested in playing ball on a significantly larger playing field.

PHASE TWO - TRADING BASE CRYPTO FOR ALTERNATIVE CRYPTO

This is the phase where things get really exciting and interesting. At this point, you would take the base coins you traded your FIAT money for and would then use them to acquire thousands of different cryptocurrencies on the market. Just about every single coin available is basing it's volume (growth) off of the model of the infamous Bitcoin, meaning just about every coin on the market can be purchased by spending Bitcoin to buy it. For example, crypto such as NEBL is an alternative cryptocurrency that is about to go through a growth spurt that you have your eyes on. Well of course you'd like to buy it, how else would you make a profit off it? Certainly not just by watching it grow! You have to actually own some NEBL to be able to cash in on any profits from it growing. So let's go ahead and buy some NEBL with your Bitcoin. I'll explain how below."

So, to go ahead and buy that NEBL with some Bitcoin, you will need to go ahead and locate the Bitcoin marketplace of the exchange you are using. The Bitcoin market will show numerous cryptocurrencies that are valued and priced according to the price and volume of Bitcoin. All of them will have a BTC price, making them able to be bought with BTC or sold for BTC. Once you have located NEBL, you would click on it to enter the statistics screen for NEBL, which shows pricing, charts and more. Once you are here, go ahead and BUY some NEBL. Click on the BUY button, enter the amount of NEBL you would like to purchase with BTC, and VOILA - you just made your first cryptocurrency trade. Not so hard huh?

At this point you have just completed your first actual trade and crossed the threshold into a new and exciting world. The reason we buy and sell these alternative cryptocurrencies is always going to be the same, for the money. So how does one actually make money trading? I'll sum it up right now without going too deep. You make money by buying low and selling high. You buy an alternative coin at a lower price than what you sell it for, meaning you are making profit in the sale. Being you are hypothetically trading your alt coins for bitcoin, you also have the possibility of doubling down on your profits with the price of Bitcoin going up as well. At the end of your run, once you have had enough trading, IF you ever decide to pull back and gather your money you would sell your Bitcoin for FIAT money at another marketplace and send to your bank. That's pretty much it in a sense of the basics to give you a general understanding of what crypto trading is.

WHERE DO I TRADE CRYPTOCURRENCY?

Cryptocurrency is traded in a wide variety of places across the globe, mainly on the world wide web through online marketplaces called "exchanges". These exchanges typically offer hundreds of currencies available for purchase and sale, making it possible for a trader to widely diversify their profile and also be open to more profitable options. After all, trading is a numbers game and statistics show with a high selection comes the higher probability of finding a money maker. A great majority of these exchanges also utilize modern technology by offering their services as an android or apple based application, making trading an option for those who are on the go. Examples of some of the crypto community's finest exchanges include Binance, Bittrex, CoinBase, Cryptopia, Poloniex and more.

Though the dominant platform for buying and selling is typically an exchange, there are other outlets available for individuals to trade their crypto. Several online forums offer private sale and trading of cryptocurrency and now even some applications have emerged that allow users to sell person to person, eliminating the need for an exchange. With so many options available, it is certainly understandable how his can be a confusing thing to grasp. To set yourself in the right direction, I advise to register with a few (or all) of the exchanges listed above and prepare yourself for my future articles that give a very in depth look at crypto trading.

So there we have it, a practical way to break down the term "crypto trading" to where it is understandable in several aspects. If I happened to leave something out, or not rightly explain it well enough, please mention something to me in the comments portion and I will be sure to not only reply to you, but edit this post accordingly. I hope that this gave a little insight into one of the most important pieces of knowledge to retain in the crypto world. As always, remember that knowledge is power and the more you know the more you grow. Thank you all for reading and for supporting my beginner's guide!

Don't forget to enter my contest where many lucky Steemians have an opportunity to gain exposure and win a membership to Steem Basic Income. Read more about it below or check out my articles to find it. Please spread the word and do your part to help grow this community to astounding levels!

Visit the official contest post by clicking HERE! Day Two is officially on the clock so enter now!

Do you want to get paid in crypto just to be healthy? Read all about it by clicking HERE!

Please follow me @terminallyill to see thought provoking pieces on crypto, art, music and more!

Please read and resteem the articles below from Lucky's Crypto Guide For Beginners!
PART ONE - WHAT IS BLOCKCHAIN TECHNOLOGY?
PART TWO - WHAT DOES DECENTRALIZED MEAN?
PART THREE - WHAT IS A PEER TO PEER (P2P) NETWORK?
PART FOUR - WHAT IS BITCOIN?
PART FIVE - WHAT IS CRYPTOCURRENCY?

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7 years ago by terminallyill (54)

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kuroiwa (35) · 7 years ago

I hardly ever completely understand posts on cryptocurrency but you've done me a real service.....thanks

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terminallyill (54) · 7 years ago

@kuroiwa thank you! Be sure to check the articles in this guide prior to this one. You will find a wealth of information in them. The next post in this series should be releasing today, so stay posted my friend. Once again, thank you for reading this article and for commenting!

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thetravelbug (27) · 7 years ago

Enjoyed reading the post above , really explains everything in detail,the post is very interesting and effective.Thank you and good luck for the upcoming post

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terminallyill (54) · 7 years ago

Thank you for your feedback @thetravelbug :) Please check out my other articles, you may find something in there that can help you grow. Thank you for reading my article and for showing your support! Have a blessed night!

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markkennard (43) · 7 years ago

I’ve sent you a message on discord now too

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terminallyill (54) · 7 years ago

@markkennard I apologize brother, I've been travelling across country all day. I'm just now getting on Steemit and taking care of some things. I'll send you a message, please respond when you have a chance.

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markkennard (43) · 7 years ago (edited)

Crikey no need to apologise I’ve had the busiest week of my life lately so haven’t even had time to think

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terminallyill (54) · 7 years ago

Please dont forget about the project ideas i ran past you, id like to assemble a team. Dont tell a bunch of people yet, I dont want someone stealing the ideas. Ive had alot of people biting off of my work and stuff lately so it makes me a little leary.

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markkennard (43) · 7 years ago

Haven’t forgotten and haven’t told a soul about it. We definitely need to get some more people in on this with skills that we both may not have

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terminallyill (54) · 7 years ago

I definitely see a need for a programmer or two. Graphic Design Artist for website as well. Thank you for keeping it among us brother. When I get home from my travels I will Surely message you on Discord so we can talk more about this.

Quick question, would you or somebody you know be willing to do a write up about the contest?

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markkennard (43) · 7 years ago

I don’t mind. Do you mean the contest you are currently running or one that we are going to do in future. I’m not too bad at graphic designing so could give that a go and see what you think. Someone needs to lead this endeavour and I think it should be you as it was your idea to start with and you are very good at writing and coming up with ideas so let me know what you need apart from ideas as I’m already thinking about that but let me know if you have any new ideas as I may be able to build on that. I gotta go to work now and have to take my wife out of town to dunedin Hospital later but I’ll check back in with you later. Cheers

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terminallyill (54) · 7 years ago

Yes, about the current one. Im trying to keep word out that there are still 4 days left to enter so people can utilize the opportunities presented here. If you could, that would be awesome. I will definitel return the favor. I will be doing a piece for @davemccoy in the next day, so if youd like me to write based on something of yours, I'd be more than happy.

I definitely have a ton of ideas. Some i think will change the crypto world forever and some that will build Steemit. I will definitely need to talk with you on Discord. Im up for assuming the leadership position, no worries there at all. Definitely could use your graphic art abilities as well. We have some huge things in the works brother!

Touch base with me when you can. Have a blessed day my friend!

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terminallyill (54) · 7 years ago

Yea he's been bombing all of my posts. With all due respect, you kinda just did the same thing though :)

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newbieresteemday (42) · 7 years ago

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terminallyill (54) · 7 years ago

Thank you guys very much @newbieresteemday!

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miraeff (42) · 7 years ago

Thank you for taking time to drill steemians on this topic. I saw this post as a very useful one

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terminallyill (54) · 7 years ago

@miraeff you are absolutely welcome. If you haven't checked out any of the articles prior to this one, I encourage you to. Very good and informative material at the click of a mouse :)

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terminallyill (54) · 7 years ago

Very awesome, thank you @jorlauski!

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smylie2005 (49) · 7 years ago

Great post! Your way of explaining is wonderful for a gal like me! Ive wanted to jump in but have only made it as far as purchasing some bitcoin through coinbase. Im gonna follow you and read some more of your post, hopefully I can gain some extra knowledge on the subject and get further than watching bitcoin go up and down! Upvoted! Thanks :)

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terminallyill (54) · 7 years ago

@smylie2005 thank you for reading this :) If you haven't, definitely check out some of my prior articles in this series. They are designed to teach someone with little to no experience, so you may find a great deal of information in them that is easy to take in. Hope to hear more from you as I take this guide on it's journey through the platform. If you ever have any questions you can always feel free to email me at the address in the post. You can also subscribe to the email list and alert list. Thanks again!

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smylie2005 (49) · 7 years ago

Will do! Thanks a lot! :)

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terminallyill (54) · 7 years ago

MY absolute pleasure @smylie2005!

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markkennard (43) · 7 years ago

Another great post @terminallyill and thanks for taking it slow

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terminallyill (54) · 7 years ago

Thank you @markkennard!

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eprolific (65) · 7 years ago

This is incise cryptotrading training. Can digest it at once have to bookmarked it go through again and again.
Resteemed

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terminallyill (54) · 7 years ago

@eprolific thank you my friend! Please stay in contact for more great articles!

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Upped and resteemed after i found this post over at the discord channel
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terminallyill (54) · 7 years ago

Thank you @bifilarcoil!

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bifilarcoil (58) · 7 years ago

you're welcome

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terminallyill (54) · 7 years ago

Joined up @ensteemit :)

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plushzilla (55) · 7 years ago

I missed some of the earlier posts, but I am wondering if you have some advice on the best wallet to use for different types of crypto-trading that you want to do. I am only dipping my toes in the water at the moment but managing the coins is something that I still find hard to do, especially when you get into trading more seriously.

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terminallyill (54) · 7 years ago

@plushzilla I am actually doing an article on wallets in a couple of days. It will break down quite a bit on the subject. Feel fee to email me at the address in this post however and I'll answer any questions you may have, one on one. Thank you for reading!

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bashadow (65) · 7 years ago

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I and I am sure others find this type of post useful as we are all or at least a lot of us pretty new to the crypto world. thank you for trying to help us understand.

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terminallyill (54) · 7 years ago

Thank you for this and continuing to bless the community with your compassion!

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This post has been resteemed as part of The Steemit Newbie Resteem Initiative.Keep up the good work.

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terminallyill (54) · 7 years ago

Thank you so much!

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