Exchange and Trading Fundamentals
Comprehensive tutorials and guides to help you navigate investing in cryptocurrency without relying on third parties or paying excessive fees.
Expand Menu Items For Step-By-Step Basics
- Setting up Exchange accounts
- Transferring fiat to exchange
- Converting fiat to crypto
- Moving crypto from one exchange to another
- Moving crypto from exchange to wallet
- Using the ledger nano
- Converting crypto back to Fiat and withdraw to bank
- How to execute a trade (types of orders)
There are countless exchanges that allow you to convert your fiat (government legal tender) into Cryptocurrency. Each exchange has their respective pros and cons, so make sure you research which will be the best for you. In America, the top three exchanges are Coinbase (and Coinbase-Pro), Gemini, and Abra. Stephen Prefers Gemini for the security aspects as well as the ability to trade instantly. Below are links which will aid you in setting up your Gemini Exchange Account.
As we know, every exchange has their own process of how to transfer fiat into their exchange. The basis of the process remains the same, but the buttonology may differ between exchange to exchange. In keeping with the previous example, the below link will show you how to link your bank account and move funds to your Gemini account.
Now that you have fiat deposited into your account, you can now use that money to buy some Crypto. There are many different types of buy orders you can choose from, and we will cover them all in a later section; however, this will focus on a market buy order converting your fiat to Bitcoin (BTC)
If you’re a hodler, you can either leave your BTC on the exchange (not recommended) or move it to an offline wallet. We’ll discuss the differences between both hot and cold wallets as well as soft and hard wallets in a later section.
For those of you who would like to trade in Alt coins, you’ll need to setup more exchange accounts that offer trading pairs with your favorite coins. Then move your coins to those exchanges to trade in them. To find out which exchanges offer your favorite coin’s trading pair, you can either look it up on CoinMarketCap.com, or glance at our abbreviated Cheat sheet.
The below link will demonstrate how to move your crypto from Gemini to Binance.
If you’re done trading for the time being, or just want to protect your assets better, you can transfer your crypto off the exchange and in to a wallet. Again, we will discuss the differences between hot, cold, soft, and hard wallets a bit later. This demonstration will be setting up a MyEtherWallet cold wallet, and moving your ERC20 compatible tokens from Binance or Gemini to the cold wallet.
the Ledger Nano is a type of hard wallet that safely secures your private keys on an encrypted thumbdrive.
(video coming soon)
So you’re done with these trades and ready to pull out your profits to take a nice vacation! this video will walk you through the steps of converting your crypto back to fiat and sending it to your bank account.
executing trades and different types of orders.
The below video is specifically tailored to our trading signals, but should provide a valuable resource into order types and execution.
Computerized trading using proprietary algorithms. There are two types of algorithmic trading. Execution trading is when an order (often larger orders) is executed via an algorithmic trade. The program is designed for the best price possible. The second type of algorithmic trading is not executing a set order but looking for small trading opportunities in the market.
An accounting method used when an investor has made multiple purchases at different prices of the same cryptocurrency. The method averages the purchase prices to calculate an investor’s cost basis in the coins being liquidated. The difference between the average cost basis and the selling prices determines the investor’s tax liability.
Altcoin is short for Alternative Coin. Any cryptocurrency coin besides Bitcoin is considered an alternative coin.
Arbitrage is when an investor uses a price difference between two exchanges to his or her advantage. Example: If Bitcoin is trading at 5,500 on Binance and 5,800 on Bittrex then an investor could transfer their Bitcoin holdings from Binance to Bittrex and then sell for a higher dollar amount.
ATH is an abbreviation for All Time High. This is referring to the highest price point a cryptocurrency has reached.
An investor who acts on the belief that a cryptocurrency or the market is falling or will fall.
A market in which prices of a certain group of cryptocurrencies are falling or are expected to fall.
An indication by an investor, a trader, or a dealer of a willingness to buy a cryptocurrency.
An investor who acts on the belief that a cryptocurrency or the market is rising or will rise.
A market in which the prices of a certain group of securities are rising or will rise.
BUY STOP ORDER-
An order to buy a cryptocurrency that is entered at a price above the current offering price and that is triggered when the market touches or goes through the buy stop price.
A blockchain is a digital record of transactions. The name comes from its structure, in which individual records, called blocks, are linked together in single list, called a chain. Blockchains are used for recording transactions made with cryptocurrencies.
A Bollinger Band® is a technical analysis tool defined by a set of lines plotted two standard deviations (positively and negatively) away from a simple moving average (SMA) of the security’s price, but can be adjusted to user preferences. Bollinger Bands® were developed and copyrighted by famous technical trader John Bollinger.
The profit realized when a capital asset is sold for a higher price than the purchase price.
The loss incurred when a capital asset is sold for a price lower than the purchase price.
Chicago Board Options Exchange. The self-regulatory organization with jurisdiction over all writing and trading of standardized options and related contracts listed on that exchange. Also, the first national securities exchange for the trading of listed options.
A cryptocurrency analyst who uses charts and graphs of the past price movements of a security to predict future movements.
The price paid for an asset, including any commissions or fees, used to calculate capital gains r losses when the asset is sold.
Putting your cryptocurrency into cold storage means you moved your investment off an exchange and into a software wallet, a hard wallet, or USB drive. out.
Websites where you can buy and sell crypto-currencies. Some popular exchanges in North America are:
“A formal authorization or proposition; a decree” In the crypto space government issued currencies are called Fiat
Fear, Uncertainty, and Doubt. Non-material fact spread by people or organizations to cause harm to a company or individual.
A trade in a margin account that will profit as the price increases.
A trade in a margin account that will profit as the price decreases.
A device that can securely store crypto-currency. Hardware wallets are often regarded as the most secure way to hold crypto-currency.
Initial Coin Offering. Essentially the ICO is the cryptocurrency version of the Initial Public Offering.
LEDGER NANO S
This is the most popular hardware wallet on the market.
LIMIT ORDER / BUY / SELL
A limit order is an order to buy or sell a stock at a specific price or better. A buy limit order can only be executed at the limit price or lower, and a sell limit order can only be executed at the limit price or higher. A limit order is not guaranteed to execute.
Moving Average Convergence Divergence. A trend indicator that shows the relationship between two moving averages of prices.
the value of a company that is traded on the stock market, calculated by multiplying the total number of shares by the present share price
MARKET ORDER / BUY / SELL
A market order is a request by an investor – usually made through a broker or brokerage service – to buy or sell a security at the best available price in the current market. It is widely considered the fastest and most reliable way to enter or exit a trade and provides the most likely method of getting in or out of a trade quickly.
In finance, margin is collateral that the holder of a financial instrument has to deposit with a counterparty to cover some or all of the credit risk the holder poses for the counterparty. Essentially its trading on credit.
a process by which new coins are introduced into the existing circulating supply, as well as a process used to secure the network the coin operates on.
A computer dedicated to the process of validating a certain blockchain.
PUMP AND DUMP
The recurring cycle of an altcoin getting a ton of attention, leading to a fast price increase, and then of course followed by a huge crash.
A cryptocurrency that was designed and pegged at the price of a major government issued currency. The main example of the is USDT.
Technical analysis is analysis methodology for forecasting the direction of prices through the study of past market data, primarily price and volume.
Alternation (guideline of) – If wave two is a sharp correction, wave four will usually be a sideways correction, and vice versa.
Apex – Intersection of the two boundary lines of a contracting triangle.
Corrective Wave – A three-wave pattern, or combination of three wave patterns, that moves in the opposite direction of the trend of one
Diagonal Triangle (Ending) – A wedge-shaped pattern containing overlap that occurs only in fifth or C waves. Subdivides 3-3-3-3-3.
Diagonal Triangle (Leading) – A wedge-shaped pattern containing overlap that occurs only in first or A waves. Subdivides 5-3-5-3-5.
Double Three – Combination of two simple sideways corrective patterns, labeled W and Y, separated by a corrective wave labeled X.
Double Zigzag – Combination of two zigzags, labeled W and Y, separated by a corrective wave labeled X.
Equality (guideline of) – In a five-wave sequence, when wave three is the longest, waves five and one tend to be equal in price length.
Expanded Flat – Flat correction in which wave B enters new price territory relative to the preceding impulse wave.
Failure – See Truncated Fifth.
Flat – Sideways correction labeled A-B-C. Subdivides 3-3-5.
Impulse Wave – A five-wave pattern that subdivides 5-3-5-3-5 and contains no overlap.
Impulsive Wave – A five-wave pattern that makes progress, i.e., any impulse or diagonal triangle.
Irregular Flat – See Expanded Flat.
One-two, one-two – The initial development in a five-wave pattern, just prior to acceleration at the center of wave three.
Overlap – The entrance by wave four into the price territory of wave one. Not permitted in impulse waves.
Previous Fourth Wave – The fourth wave within the preceding impulse wave of the same degree. Corrective patterns typically terminate
in this area.
Sharp Correction – Any corrective pattern that does not contain a price extreme meeting or exceeding that of the ending level of the
prior impulse wave; alternates with sideways correction.
Sideways Correction – Any corrective pattern that contains a price extreme meeting or exceeding that of the prior impulse wave;
alternates with sharp correction.
Third of a Third – Powerful middle section within an impulse wave.
Thrust – Impulsive wave following completion of a triangle.
Triangle (contracting, barrier) – Corrective pattern, subdividing 3-3-3-3-3 and labeled A-B-C-D-E. Occurs as a fourth, B, X (in sharp
correction only) or Y wave. Trendlines converge as pattern progresses.
Triangle (expanding) – Same as other triangles, but trendlines diverge as pattern progresses.
Triple Three – Combination of three simple sideways corrective patterns labeled W, Y and Z, each separated by a corrective wave
Triple Zigzag – Combination of three zigzags, labeled W, Y and Z, each separated by a corrective wave labeled X.
Truncated Fifth – The fifth wave in an impulsive pattern that fails to exceed the price extreme of the third wave.
Zigzag – Sharp correction, labeled A-B-C. Subdivides 5-3-5.