Beginners Crypto Guide to Continuation Chart Patterns 

Beginners Guide to Continuation Chart Patterns for Crypto Trading

A major part of technical analysis is determining whether to buy in or sell out of a formidable crypto trading play. Kenny Rogers always use to say, “know when to hold em, know when to fold em, know when to walk away, and know when to run”.

Note: If you’re under 25, you probably have no clue what the hell I’m talking about, so just disregard my 80’s reference or go ask your dad.

Moving on…

These crucial chart patterns help traders forecast future price movements.  It doesn’t matter which coin you’re trading, these bad boys show up all over the charts.

Continuation chart patterns DO NOT predict the future (wouldn’t that be nice).  They help with locating the “probability of movement” within a particular trend. However, I promise these powerful buy and sell signals can help you make much better investment decisions. Scouts honor!

Go ahead and study the chart patterns I outlined for you below. If all else fails, we’ll go searching for a Dolorean and cheat our way to crypto riches. Deal?

dream of every crypto investor

Continuation Chart Patterns – Which Way Does it Go?

As stated above, continuation chart patterns will tell you whether price movement is going to continue moving up or down within a prevailing trend.

For example, if price movement of a downtrend shows signs of a continuation pattern and of that trend, what do you do? If you guessed, “buy in” then you really need to study this guide. The correct answer is…wait until a reversal pattern emerges or move onto another coin to trade.

So let’s start things out with 6  of the more popular continuation chart patterns. Study each as there will be a test at the end of this guide. Just kidding, no one likes tests. Ready? Let’s go!

Rectangle Continuation Patterns

bullish rectangleThis continuation pattern depicts sideways price movement between 2 horizontal trend lines (support and resistance) along a strong uptrend, which generally results in an overall uptrend continuation.

In order to be defined as a true bullish rectangle, price movement should touch each trend line at least two times on both support and resistance. Upon doing so, the price action should break the top trend line of resistance. Investors want to purchase the cryptocurrency when the price action closes (candlestick close) above the upper trendline.

Summary

  • Confirmation to buy – when price closes above the upper trendline.
  • Pattern confirmation – two touches on both support and resistance.
  • Percentage of time pattern reaches target – 80%.

bearish-rectangleThis continuation pattern depicts sideways price movement between 2 horizontal trend lines (support and resistance) along a strong downtrend, which generally results in an overall downtrend continuation.

In order to be defined as a true bearish rectangle, price movement should touch each trend line at least two times on both support and resistance. Upon doing so, the price action should break the bottom trend line of resistance. Investors may want to short the cryptocurrency (refer to margin trading) or sell the coin at this position for a loss.

Summary

  • Confirmation to sell – when price closes below the upper trendline.
  • Pattern confirmation – two touches on both support and resistance.
  • Percentage of time pattern reaches target – 50%.

Triangle Continuation Patterns

ascending triangleThis bullish continuation pattern is depicted by a right triangle which is created by two trend lines. The bottom trend line is drawn horizontally upward, where support prevents the price action from breaking through.

The top trend line is represented by a horizontal level which prevents the price from breaking through this resistance. Once this resistance line is broken, upward price momentum is expected to continue.

This pattern showcases that the demand for the crypto coin is increasing over time.

Summary

  • Confirmation to buy – when price closes above the upper trendline.
  • Pattern confirmation – two touches on both support and upward horizontal resistance line.
  • Percentage of time pattern reaches target – 75%.

The bullish continuation pattern is depicted by a right triangle which is created by two trend lines. The bottom trend line is drawn at a horizontal level where support prevents price action from breaking through.

The top trend line is represented by a downward horizontal line which prevents the price from breaking through this resistance. Once this resistance line is broken, downward price momentum is expected to continue. It is recommended to sell here.

This pattern showcases that the demand for the crypto coin is weakening over time.

Summary

  • Confirmation to sell – when price closes below the lower trendline.
  • Pattern confirmation – two touches on both horizontal support and downward resistance line.
  • Percentage of time pattern reaches target – 54%.

Flag Continuation Patterns

bull-flag-cryptoThis continuation pattern resembles a flag at the top of a pole. The bullish flag is a short-term continuation pattern which tells you that a temporary market consolidation is occurring before a continuation of an uptrend.

Within the pattern, the flagpole is represented by the sudden vertical spike in price as the flag portion is represented by a temporary downward consolidation against the uptrend.

Typical bullish flags are angled downward from the predominate trend, however on occasion it can be angled upwards. The continuation pattern is complete once price action breaks above the upper resistance trendline.

A typical price target is measured by adding the length of the flagpole to the price associated with the bottom of the flag.

Summary

  • Confirmation to buy – when price closes above the upper trendline.
  • Pattern confirmation – at least two touch points on both downward support and downward resistance line.
  • Percentage of time pattern reaches target – 64%.

This continuation pattern resembles an upside down flag. The bearish flag is a short-term continuation pattern which tells you that a temporary upward market consolidation is occurring before a continuation of a downtrend.

Again, the flagpole is represented by a sudden vertical dip in price as the flag portion is represented by a temporary upward consolidation against the downtrend.

Standard bearish flags are angled upward or sideways from the dominant downward trend, however on occasion it can be angled downward. The continuation pattern is complete once price action breaks below the lower trendline of support.

A typical price target is measured by subtracting the length of the flagpole to the price associated with the top of the flag.

Summary

  • Confirmation to sell – when price closes above the upper trendline.
  • Pattern confirmation – at least two touch points on both downward support and downward resistance line.
  • Percentage of time pattern reaches target – 64%.

Good Job Kid! 

You did it kiddo! You studied your ass off right? You ready for the big leagues now? Don’t get to far ahead of yourself…..there’s more. 

This is where the rubber meets the road. Now you need to apply these patterns to real charts before you can actually claim your fame. Head on over to our Tradingview charts and get started on a few while it’s still fresh in your mind.

Once you’re comfortable with recognizing these patterns, throw a few dollars down on your favorite exchange (whatever you can manage – start slow). See if you can win a few rounds within your own crypto trading challenge. 

Remember young grasshoppa, practice doesn’t necessitate real world experience, but it sure as hell helps! 

For more kick ass trading guides along with solid fundamental analysis, check out our crypto trading page section here. Good luck!

The Beginner Friendly Guide to  Technical Analysis With Cryptocurrency

The Ultimate Beginner Friendly Guide to Crypto Technical Analysis

No matter what anyone has told you, producing a steady income with trading takes time, experience, dedication, and a lot of emotional grit. However unlike traditional markets, you can make money much faster with trading cryptocurrency due to its volatile marketplace and low barrier of entry.

There are 2 parts to becoming an successful crypto trader and that is mastering technical analysis as well as your own emotions. I would even go so far to say that the emotional aspect of trading is a bit more difficult. We’ll divulge into that aspect of trading in another guide.

Let’s talk technical analysis and some of the most basic cryptocurrency trading indicators you’ll need to master, in order to get a foothold on what you’re doing.

What is Technical Analysis?

Technical analysis (AKA – TA) displays a cryptocurrency‘s price and trading volumes over time using a nice and easy to read graphic representation of candlesticks.

The only other option you have to make sense of all these variable numbers  would be for you to calculate volume and price on a linear scale over time multiplied by pie over distance, but for most people that is completely impossible. Believe me, that crap will make your brain clench up faster than solving a trigonometry problem on 8 cans of red bull. Let’s just say, unless you’re a math genius, just stick to the charts, ok?

 

There are two types of research methods that you want to be familiar with before starting to make actual trades; technical analysis and fundamental analysis.

Fundamental analysis is focused on aspects of the development team behind each cryptocurrency. It also includes the latest news, and rumors surrounding your potential coin. Believe me, all these can play a major part on the value of any cryptocurrency.

PRO TIP: You can learn more about the fundamentals of trading here. 
Check out our live chart, and click on any cryptocurrency you’re interested in. We give you an all-in-one location for you to research coins and complete your fundamental analysis.
We cover cryptocurrency whitepapers, official coin websites, social media accounts, blockchain info, and  more. Believe me, we cover everything you need to know, in order to make a well informed buying decision.

Before we go into details of technical analysis, remember that price movements within a chart are not random. They often follow a trend, both long or short term, depending on the timeframe you are looking at.

technical analysis trends cryptoTrends within the trading community are not some new pair of stone washed jeans you decided to purchase for $100 because Justin Biebers wearing them. These trends refer to the mass psychology of a group in order to capture gains through the analysis of an asset’s momentum in a particular direction. The “group of people” (or herd) were analyzing, always follow certain patterns and react to certain price action. These can be predictable to those who know what to look for. This my friend, is what technical analysis is all about.

In order to be a one of the great crypto traders of your time, you’re going to need to recognize these trends like chart and candlestick patterns, as well as certain indicators (RSI, MACD, Stochastics). We cover more about candlesticks patterns  here. Click the link, as it opens in a new tab, and check it out once you’re done here.

Let’s get started…

Support and Resistance Levels (Bases and Ceilings)

One of the more simple indicators to identify in your early stages of your trading career are support and resistance lines. Trading patterns are always comprised of these lines.

Support (you can think of them as a base) is where you have more than two candlesticks that touch a particular price level on the way down a trend. These tend to bounce off support and move upwards from towards resistance to form another cycle.  The more candlesticks that touch your support, the stronger it is. Let’s take a look at a strong support.

strong-support-lines-trading-technical-analysis

Now if a support is the bottom of a cycle (or base), then what do you think resistance is? That’s right….you guessed it! A resistance line would be where your candlesticks continue to touch at a price level moving up and then eventually dips to touch the support again. Let’s take a look at a strong resistance line.

strong-resistance-lines-trading-technical-analysis

As stated above, you need at least 2 touches of a candlestick, within a cycle, in order to claim any sort of support or resistance. I typically look for at least 3, in order to be more confident about a certain level.

Ok, now you have mastered support and resistance lines (well, with a little practice you’ll get there), so let’s move onto trend lines.

Trend Lines – Riding The Highs and Lows

The major difference between support and resistance lines and trend lines are that trend lines “typically” tend to be drawn in a diagonal direction. Support and resistance are drawn with straight horizontal lines. That’s not always the case, but it’s more often than not. 

When it comes to trading, a picture is definitely worth 1000 words. In order to better conceptualize trend lines, let’s have a closer look at both a rising and falling trend.

up trend line down trend trading technical analysis

Much like the support and resistance lines, you want to make sure you have “at least” 2 or more touches off a candlestick in order to consider it a trend. The more the merrier.

Trend lines can also move sideways, which we typically label as a “consolidations”. You also have short, intermediate, and long term trend lines depending on the timeframe of the chart you’re looking at.

Now that we’ve covered the basics of trend lines, let’s step your game up a little and start getting a little more “technical” with moving averages.

Moving Averages – What Are They and Why You Should Care?

Moving averages are generally used to simplify trend recognition. These moving averages are based on the average price of a coin over a designated period of time.

You can calculate moving averages to show the average of any group of days, but most traders calculate these averages over a period of 10, 20, 50, 100, and 200 days. The one I personally use the most is the 50 day Simple Moving Average (SMA) which is used to identify trend direction.

There are also two types of moving averages you can use, exponential or simple moving averages, depending on how broad or narrow you want your insight to be. I recommend using both. Let me explain…

There are certain strategies for each, however to be more specific, exponential moving average give higher weighting to recent prices, whereas simple moving averages assign equal weighting to all values.

To put it in layman’s terms, SMA will give you a broader overview of where a trend is at and EMA is better used to make quick judgment calls on more recent price action and trend reversals.

I like to use a 50 day moving average in all my charts. These allow me to quickly tell whether a trend is moving up or down. It also tells me if the current trend is in a bullish or bearish state within the current timeframe I am viewing.

Anything below the 50 day moving average tells you that the trend is currently in a short or long term bearish trend. If the candlesticks are above the 50 day moving average, you’re in a bullish trend.  Knowing which trend you’re in (both long and short term) will allow you to better formulate a strategy moving forward.

bullish and bearish area 50 day moving average technical analysis

The Simple EMA Strategy

Exponential moving averages (EMA) will help you decide if a trend is about to reverse on a more short-term scale. Many traders use different EMAs, however the one that I found to be the most useful are the 13 and 34 day moving averages.

Here is the basic strategy behind EMA …

  1. Set one EMA to 13 and choose a color (red for this example)
  2. Set another EMA to 34 and choose a color (blue for this example)
  3. When the 13 EMA crosses above the 34 EMA (red over blue) you should look into buying at that cross, as the trend is entering a bullish state (moving up).
  4. When the 34 EMA crosses above the 13 EMA (blue above red) you should be selling as the trend is entering a bearish state (moving down).

exponential moving averages of 13 and 34 technical analysis trading

As you can see, as soon as any of the lines cross, a substantial shift within a trend can be seen. This combined with a few other indicators will help you formulate a game winning trade.

Next, let’s talk about a very important indicator that all traders use… volume.

Trading Volume – The Tasty Filling Between 2 Price Levels

Trading volume plays a crucial role in identifying whether a trend is weak or strong. Strong trends with high trading volume, will always be accompanied by many long candlesticks. The same goes for weak trends. These will be accompanied by many short candlesticks.

Let’s break this down and structure it appropriately…

– If you have several long candlesticks within the volume indicator this indicates a strong trend. If most of these are green, that would indicate a strong bullish trend. Vice versa for red candlesticks indicating a strong bearish trend.

– Many short candlesticks within the volume indicator show a weak trend. If most of these are red, it would represent a weak bearish trend. On the other hand, if most of are green, this would indicate a weak bullish trend.

volume-indicator-trading-technical-analysis

Pretty simple right? Exactly! This ain’t brain surgery folks. Volume indicators are pretty simple to understand.

Technical & Fundamental Analysis Unite
The Two Eternal Research Strategies

 

Don’t be lured into the always present debate between fundamental and technical analysis. Many novice traders tend to choose sides between these two research powerhouses. They believe one is ultimately better than the other.

This my friend, could not be any further from the truth. You should be asking yourself….why choose one method over the other, when you can choose both right?

Using technical analysis (TA) as well as fundamental analysis (fundamentals) will equip you with the prophetic knowledge you need to culminate a precise trading strategy that you can actually feel good about.

Technical Analysis will give you a practical way to measure past price movements and their corresponding trading volume. This is vital knowledge you’ll need when considering a trade.

Fundamental Analysis will empower you with significant insight regarding the current cryptocurrency conditions. Everything from current news, rumors, and development plans will play a crucial role in your decision with fundamental analysis.

Combine these two powerful research techniques into one highly effective and targeted trading strategy.

You want to utilize fundamental analysis to dictate which coin is worth investing in, while tightening up your strategy when you’re ready to trade, by finding a good entry point with technical analysis.

Start Your Trading Journey Off On the Right Foot

technical-analysis-trading-chart-cryptoIn order to get started, we’re obviously going to need to use a trading chart to plot out some beautiful technical analysis right? You can start by utilizing our free chart here, however there will come a time when you need more than what this free solution has to offer (like alerts, more indicators, etc).

This is why I highly recommend TradingView for all your trading and chart plotting needs. TradingView offers a lot more than just charts. They include a massive selection of experienced traders that you can both follow and learn from. You can view expert TA trades on a number of coins and learn from real life application. 

It is the quintessential social media platform for all traders, both novice and experts alike. They also have a very comprehensive technical analysis reference guide that you can study if you ever want to expand your trading know-how. Reading up on trading ideas of various indicators, chart patterns, candlestick patterns, and then seeing them in action really helps.

I highly recommend starting with the Pro plan to start. If you need more indicators and alerts on down the line, go for the Pro+. 

Let’s wrap this up…

This guide has presented you with the basic concepts behind technical analysis for trading with any particular cryptocurrency. I highly recommend you practice using the indicators I discussed above and move on to more advanced charting patterns, which we’ll cover in another future guide.

Now get out there and start charting!

Go on….you can do it! Don’t just let your dreams be dreams! 😉

How to Trade Cryptocurrency Candlestick Patterns Like a Pro

How to Trade Cryptocurrency Candlestick Patterns Like a Pro

Since the dawn of cryptocurrency, we’ve seen a major increase in its value. It’s value and utility over paper currency is much better suited to our entire way of life within this new digital era. It’s very possible that it takes over the future of currency, but that’s a bit over speculative for now. One things for sure though, with so many benefits to offer, many are tempted to trade these digital nuggets of gold.

Even if the concept of cryptocurrency seems foreign, trading is fairly simple when you get a handle on it. However, in order for it to be useful, you need to understand the ins and outs of the market and the rules that the market follows in order to get a grasp on certain trading fundamentals.

Much like institutional stock trading, it’s important to understand the fundamental signals to start and what they mean.  Understanding these  signals can be the difference between winning or losing your ass on a trade.  One of the most important “signals” ‘you can begin to study along your cryptocurrency trading career is the candlestick.

What Are Candlestick Patterns?

Candlestick patterns have been in use for decades and have become very popular in terms of plotting the price action of a security or stock. Typically, a candlestick chart has a series of bars, called candles, which have different colors and heights. The colors and sizes depend on the price action of the security being studied at that point in time. It usually contains both opening and closing prices.

The bars of the candle depends on the unit of time, be it a minute, day or even a week, depending on the time frame of the chart you’re looking at. This, however, does not affect the candle’s colors. If a hollow bar is visible, it means that the closing price is higher than the opening price of the currency.

A red candlestick is used when the opening price is higher than the closing price, thus showing a downward pull, whereas a green color is used to show that the price rose from the starting period to the end.

Even though the candlestick chart can let a person determine what the rate of the cryptocurrency is headed towards, technical analysis is also needed so that a better decision on movement can be made.

Popular Candlestick Trading Patterns

Let us look at some patterns that can be often found in a candlestick chart. There are two categories: continuations and reversals. Most candlestick patterns fall into these categories. A continuation pattern can predict the extension of the price action currently prevailing, reversal patterns predict the change in the price direction.

Take a look over the 9 following bullish candlestick patterns which you’ll want to focus on for a strong reversal signal:

Hammer

Being the bullish reversal pattern, the hammer can be seen as a signal that the cryptocurrency has almost reached the bottom in a downtrend. This means that the bears have been exhausted.

hammer trading pattern cryptocurrency

Hanging Man

The hanging man is the exact opposite of the hammer. Here, the signal is that the cryptocurrency is nearing the top in an uptrend. If you see a hanging man when the prices are going up, do not buy since the prices will most likely be going down very soon so it’s best to take your profits now.

hammer-and-hanging-man-candlestick-patterns

Three Soldiers

When you spot a pattern with three soldiers, you can immediately recognize that a period of downtrend has just been active or is in the price consolidation.

3-white-soldiers-candlestick-pattern-cryptocurrency

Bullish Engulfing Pattern

It is a reversal pattern with two candles, and it usually appears in a downtrend.

bullish bearish engulfing pattern candlestick

Morning Star

During a gloomy downtrend, the morning star can be considered as a sign of hope for investors. Obviously, this is a bullish sign.

morning star candlestick pattern cryptocurrency

Piercing Line

The piercing line can be seen in a downtrend.

piercing line candlestick pattern cryptocurrency

Shooting Star

This signal is an excellent indicator of the fact that the prices are about to as the bulls are now exhausted. This is a good reversal pattern candlestick indicator.

shooting star candlestick pattern cryptocurreny

Inverted Hammer

This is one bullish reversal pattern and indicates the support level. The signal shows that bulls are attempting to raise the prices upward, this is also why you will see long shadows (also referred to as wicks). They aren’t strong enough to push the prices up at the moment, however when you see this signal, you need to stop selling your currency because there is a very high chance of an upcoming rally.

invered-hammer-candlestick-pattern-cryptocurreny

Doji

When you see a doji, you need to be cautious since the pattern means that the market is not very sure about future movement and is waiting for an external sign. Usually, this means that it shows reversal signs. The signals are not as strong as can be seen in the signals discussed above, however if you see this signal, you better stop buying and selling since the uneasy market can mean you might end up losing your investment.

doji-candlestick-pattern-cryptocurreny

Recommendations

When you decide to trade cryptocurrencies, it is better to use a variety of technical analysis and candlestick patterns so that you have a clear idea of what plan of attack to take for future movement. Both upward and downward movements are a lot more prominent when evaluating over a long period of time, for example hours or days, however this depends on if your day or swing trading.

When you take candlesticks pattern into consideration, try to wait until the next candlestick forms and then analyze the previous one. Since the candlesticks are patterns based on speculation, any news can turn the whole pattern upside down. This is why you should try to trade on days when there aren’t any huge events so that the candlestick pattern is properly represented within the market and won’t change drastically.

I highly recommend checking out our charts here and practice predicting certain candlestick patterns as they form. While you’re at it, print this candlestick cheat sheet until you get a good grasp on candlestick patterns. Hell, I even use it from time to time myself and I’ve been trading for several years now.

Now get to work and start practicing your trades!!

The Ultimate 2018 Cryptocurrency Beginners Trading Guide for Bitcoin & Altcoin Investing

beginner-cryptocurrency-trading-guide

Within this extensive beginner cryptocurrency trading guide I’m going to introduce you to the basics of cryptocurrency trading as well as how to trade altcoins like Litecoin, Ethereum, Ripple and all those other crazy shitcoins you see littered throughout CoinMarketCap.

I’ll also highlight some of the things I learned through hands-on experience as a lot of this stuff will sink in a lot easier once you do it a few times, so don’t get ahead of yourself and take action on each step accordingly before you move on to the next one.

If you’re just starting out, I highly recommend you bookmark this guide and start from Step 1. If you consider yourself a moderate to experienced trader, by all means, use the table of contents below to zip down to exactly what you need to know!

Ready? Good! Let’s get started…

Table of Contents

  1. Step 1 – Open A Cryptocurrency Exchange Account
    – An Option for Quicker Deposits
    – Your Funds Are Deposited
  2. Step 2 – Trading your Bitcoin On A Cryptocurrency Exchange
  3. Step 3 – Getting Familiar With The Trading Exchange Interface
    – Trading Platform Order Types
  4. Step 4 – Exploring More Altcoins via CoinMarketCap
  5. Step 5 – Transfers, Deposits & Withdrawals
    Deposits and Withdrawals
  6. Step 6 – Mitigating Your Risk & Securing Your Profits
    Securing Your Profits via Digital Wallet
  7. Proven Cryptocurrency Trading Techniques
    – Trading Tools For Technical Analysis
  8. Common Crypto Trading Mistakes & How to Avoid Them
    – Keep Your Cool

    – Let Opportunity Come To You
    – Only Invest What You Can Afford To Lose 

Step 1 – Open A Cryptocurrency Exchange Account

  1. Start preparing by scanning your ID in the form of a driver’s license or passport ID and have that bad boy on your computer to use in our next step. Make sure you scan the front as well as the back your card.
  2. Start out by joining a “cryptocurrency to fiat exchange” that allows you to purchase crypto with your bank account or debit card. These exchanges include…

    Coinbase

    LocalBitcoin

    CoinMama (lower fees)

    Gemini

    Don’t just join one, join them all while you’re at it. You’ll find that one exchange will be slower to transfer your fiat currency over then another at certain times of the year, so it’s always good to have backups on your back up.

  3. Set an account with a cryptocurrency “trading” exchange. The ones mentioned above are great for turning your fiat currency over into cryptocurrency however there are much better trading exchanges that will allow you to trade your crypto for other altcoins and vice versa. The exchanges mentioned below also have much better charts and trading features you’ll end up using for every trade.

    Much like the “fiat to cryptocurrency exchanges” mentioned above you’ll need to submit a driver’s license, passport, or some sort of photo ID. You might as well kill two birds with one stone here and apply to all these exchanges, at once.

PRO TIP:  there’s no need to buy a whole number of a crypto coin as you can own small fractions of any cryptocurrency so don’t really worry about completely fulfilling an entire Bitcoin for example. There are millions of investors and traders who only own fractional amounts of many coins.

An Option for Quicker Deposits

If you’re impatient like me and don’t feel like waiting several days for your deposit to complete, check out  LocalBitcoins  This place accepts everything from cash, credit card, and even Walmart card payments

Everything on this site is sold through third-party sellers so be careful and make sure you purchase through a reputable seller who actually has reviews under their local bitcoin user ID (think eBay for crypto)

With this option you’re not paying ridiculously high fees as well, but you will have to get up off your ass and make the transaction yourself either through bank account transfer or cash in hand.

4. Set up a direct deposit or wire transfer from your bank account for the quickest possible deposit into any one of these exchanges. Depending on the time of day, alignment of the stars, season of the year, etc… it can take anywhere from 1 to 7 days for the funds to reach your account.

To be quite honest, it really depends on how busy your current exchange is at any given moment. Coinbase tends to be the busiest and most widely used so if you’re in a hurry, you may not want to use this one.

Your Funds Are Deposited

Now that your deposit has hit your account, and you have that beautiful cryptocurrency on-hand (because I know it’s burning a hole in your digital pocket) let’s move on to the next step, trading on crypto exchanges.
PRO TIP: – when you sign up to Coinbase or any other “US-based” exchange, your transactions will be reported to the IRS. Do yourself a favor and make sure your tracking all transactions. A great service that does this for you, without you having to do it manually (which is an extreme headache) is CoinTracking. I highly recommend this service to everyone who intends on trading more than a few coins per year.

Step 2 – Trading your Bitcoin On A Cryptocurrency Exchange

trading-your-bitcoin-on-an-exchange guideThis is where the rubber meets the road. If you want to invest or trade in a cryptocurrency other than Bitcoin, Litecoin, Ethereum, or Bitcoin Cash then you’re going to need to get real cozy and familiar with a real cryptocurrency exchange trading platform.

These exchanges can be a bit intimidating to the weary newcomer, however believe me when I say, once you learn one, you’ll know how to use all of them.

I’ll go over the intricacies of how to use each trading platform from the order book to trading charts, however let’s stay on course and get you signed up to a few of these beginner friendly exchanges.

  1. Sign up to Binance – this is where all the beginner to more intermediate crypto traders go. This is a great place to start your crypto trading journey.
  2. Sign up to HitBTC – this is another beginner friendly exchange that caters to the trading noob. They have some pretty cool trading features as well when you get into the intricacies of trading (order book) but I’ll cover this in another article.
  3. Sign up to Bittrex – this exchange is more of an intermediate to advanced level exchange, however is definitely worth signing up to while you’re in the process of applying for these exchanges.

Also worth mentioning is GDAX, however you essentially get access to that exchange when you get accepted to Coinbase. It’s the official trading platform for Coinbase users. I don’t currently use that platform but realize that there are a lot of other beginners that do, so it’s worth checking out.

PRO TIP:  learn what “dollar cost averaging” is before you start trading. This basically means that if you deposited $1000 total to spend on trading, you want to split that up into segments of 4 ($250).

Let’s say you begin trading Litecoin at a low and invest $250. You notice 24 hours later that the coin drops by 10%. This is where you’ll want to place another $250 into the trade as it will average its self out to a lower buy-in price.

You can also spread out that $1000 by purchasing $250 increments in four separate coins at all-time lows. I’ll cover more details of these type of strategies within another guide.

PRO TIP: – Stay tuned to our Youtube channel where I’ll cover more details behind trading and technical analysis on different platforms as well as several different beginner trading strategies.

Step 3 – Getting Familiar With The Trading Exchange Interface

Watch this video to get acquainted with the Binance trading interface

Be sure to check out our Technical Analysis, Candlesticks, and Chart Patterns section of our site where I cover all the standard details of crypto trading.

Trading Platform Order Types

There are 3 different order types when buying or selling at any of the crypto exchanges. You should be comfortable with each one of them in order to be a successful trader.

Note that all orders, both buy and sell, have fees attached to them however they are relatively small.

market-order-on-exchange

Market Orders – these type of orders allow us to get into a trade right away at current market price. Orders are immediately filled on a order books best available price. The advantage of this type of order is that it’s always completed immediately, however on the other hand it’s not always the best price.

 

buy-limit-order-for-binance-exchange

Limit orders – this allows us to set a specific price and have the market fill that price at whatever time interval it may be filled at (could be 5 mins or an hour+). You may notice that the order book is always full of sell orders that are a little higher than the current market coin value as well as buy orders that are lower than current market coin value. Once you place a limit order you’ll be able to view where your order is within the order book, usually indicated by an arrow pointing to your exact order.

The advantage of limit orders is that we get our order filled at the exact price we want, which is usually at discount. The disadvantage is that our transaction will not be filled immediately or may not be filled at all if the market never reaches our price.

stop-limit-order-for-binance

Stop Orders – (AKA – “stop losses”) these are mostly used when selling coins and allow you to set conditions as to specify a certain price when it becomes less than or equal to the current market price. So to put that in layman’s terms, look at it like an automated parachute. When the market price drops to your designated price, the parachute activates and gets you get kicked out of the trade, which allows you to take as minimal of damage as possible.

The advantage of setting a stop order is that it allows us to step away from the computer and not watch the price, while allowing us to have some protection in case the order drops by a certain set amount.

The disadvantage to having a stop order is that there are cases where a price will drop significantly for a very small period of time before it rallies (increases) to meet your original goal order price. This is a way for market-makers to eliminate stop losses before they start ramping up for a bullish run.

PRO TIP:  Trading cryptocurrency or really any sort of stock is all about minimizing losses and maximizing gain. No one and I mean no one is going to win them all. You just have to make sure that your losses are small while keeping most of your gains relatively large.

Candlesticks and Trading Patterns – you want to get yourself familiar with these indicators as they are the basic foundation of trading cryptocurrency. We cover a wide variety of these patterns on our candlestick and trading patterns section. I highly advise that you check these out now and study them while you’re waiting for your exchange approvals to facilitate.

Step 4 – Exploring More Altcoins via CoinMarketCap

If you’ve been in the crypto world for more than a week, then I’m sure you’ve heard of the website CoinMarketCap.com. This bad boy should be your ever-loving sidekick when it comes to checking on the latest trends, prices, exchange marketplaces, and news for anything crypto coin related. 

The only real issue that I’ve had with a CoinMarketCap is that it’s not updated in real time and can showcase older prices. However if you want to view real time cryptocurrency price updates, I highly recommend you check out our live crypto chart page for up to the second price updates. Moving forward…

living-under-a-rock-coinmarketcapSo let’s just pretend I’ve been living under a rock and heard about a new coin called Litecoin. First thing I would do is go to CoinMarketCap and search for Litecoin. 

Once I find it, I would click on the coin link and look under the tab labeled markets to view what exchanges sell the coin. See that there are quite a few to choose from. 

You can also view a that particular crypto coins website, latest news, forum gossip, market value over time (charts), and so much more. There’s a ton of information to dissect on CoinMarketCap however I’ll save that for another article.

Overall, this should be one of the very first places you explore before trading a new altcoin as it gives you a nice overview on the coin before you dive right into the details before trading!

Step 5 – Transfers, Deposits & Withdrawals
cryptocurrency-exchange-transfers-and-deposits

Let’s talk about cryptocurrency coin transfers. These transfers seem to be common place for cryptocurrency trading even more than any other trading commodity in the world (forex, stocks, options, etc), so let’s make sure you do it right and do it well!

One thing that you really need to wrap your head around pertaining to the transfer of bitcoin or any other cryptocurrency for that matter is that the fees for transferring these coins can vary greatly.

At the time of writing this article, bitcoin is currently taking longer to transfer than most coins as well as suffering from a high transfer fee. For this reason alone, most experienced traders are purchasing coins like Litecoin, Bitcoin Cash, and Ethereum in order to transfer from one exchange to another with minimal wait time and fees charged. Go check out bitinfocharts to see what the current coin transfer rates and fees are before setting up an exchange transfer.

Once the transfer is complete, you can easily purchase the exact cryptocurrency that you intend to trade with your pair (typically BTC, ETH, or USDT).

Deposits and Withdrawals

crypto-coin-deposits-and-withdrawels
click to enlarge

These both work in the same manner and are fairly easy to complete. Once you complete this process once, you’ll mostly be able to do it again without any sort of instruction. In this example, we’ll be depositing BTC into Binance from Coinbase. You want to start out by retrieving your deposit address (the exchange you will be sending coins to). From here you want to click on the deposit button and copy your deposit address.

coinbase-send-and-receive-funds-transfer-withdrawel

Take that deposit address and place it into the Coinbase Send/Request tab under Recipient. Once you click the “Send Funds” button, the Bitcoin is on its way. Now that wasn’t that hard was it?

Important Note – If you want to check on the status of your transfer, keep your deposit address handy and then place it into the search bar at blockchain.info

 

PRO TIP : Always, and I mean always enable the two factor authorization for all the exchanges you currently use. Most exchanges use the authenticator app or Authy app which both reside on your smartphone. This will ensure that no unwanted guests will access your account without also having access to your smartphone. This is a little added security that you want to have when you have thousands of dollars on the line.

Step 6 – Mitigating Your Risk & Securing Your Profits

secure-your-hard-wallet-cryptocurrencyCongratulations young grasshoppa! You’re one step closer to becoming the next crypto millionaire, however there is one aspect to crypto that you want to master at an early stage in your trading career…..SECURING YOUR PROFITS! Weekly news regarding hacks and crypto scams are prevalent within this industry. Cryptocurrency is currently in the Wild West stages and everyone’s out to get a little piece of your golden nugget.

Most of the hacks reported by the majority of new sites are through spoof sites which are essentially websites that look like a real crypto exchange. Next, they request you to login to your exchange account and once you login with your credentials, the game is over. Utilizing 2 factor authentication is a surefire way to combat this, so again make sure you have that feature turned on before you start trading.

You can also utilize sites like HaveIBeenPawned and enter your information so that this site can scan for security breaches to see if your username, password, or other information has been leaked in the past. Sign up to the notification system so they can let you know of future breaches as well.

Securing Your Profits via Digital Wallet

Now that you have enough cryptocurrency to take over the world, you need a safe and secure place to store it. Below are four options to choose from.

crypto-exchanges-wallets-softCrypto Exchanges – this is the easiest option you can use, however the most risky as well. It allows for fast liquidation of assets and you don’t have to wait for your crypto to transfer over to your exchange of preference. You can easily exchange your cryptocurrency and diversify your portfolio with all the available coins within the exchange.

The biggest disadvantage though is that you don’t actually have control over your wallet and if the exchange is hacked (many of the newer and less established exchanges are) and they declare bankruptcy you’ll most likely not be able to retrieve your funds. Mt Gox is a great example of this and is always being referred to when it comes to these types of scenarios.

exodus-soft-wallet-crypto-storage

Soft wallets – this solution includes storing your crypto on a software program like Exodus, in which all of your crypto millions will be stored on your desktop or laptop computer. You also want to make sure that you keep your private key in case something happens to your computer, such as a virus or hardware malfunction. This should enable you to retrieve your funds if this were to ever occur. You also want to make sure that this private key is secured in a safe place. Like most other systems that use private keys, you’re still the susceptible to having them stolen if you’re not careful where you place it. 

my-ether-walletOnline Wallets – this offers users a way to keep their crypto online, in a secured environment without the worry of being hacked or shutdown. Services like My Ether Wallet offer an option to access your wallet from anywhere in the world, while maintaining full control of your funds because you have access to your own private key. The main advantage of this type of service is the portability of your funds. The disadvantage is that your private key will still be susceptible to being stolen if you keep it on your computer or somewhere that is easily found in your home. It’s a very small chance, but still a chance.

hard-wallet-ledger-nano-cryptoHardware Wallets – the induction of wallets like Ledger Nano S can take care of your private keys for you so that you’re off the hook with regard to keeping that key in a safe place. This ultimately means that hackers will never be able to steal your private key (key loggers, file scanners, etc). If that wasn’t good enough, you’ll also have a backup of your secret key, which you can access if you ever lose your Ledger Nano. The only disadvantage, if you want to call it that, is that you’ll have to pay a transfer fee for when you transfer your coins from the wallet to an exchange, however I wouldn’t really categorize that as a disadvantage as it simply comes with the territory regardless of what wallet you decide to use

Proven Cryptocurrency Trading Techniques

In order to get you moving in the right direction I want to cover a few proven ways to make money trading cryptocurrencies. Many of these techniques have been carried over from traditional stock market trading, however, unlike traditional stocks you won’t find the volatile swings we see every day with cryptocurrencies, which means more opportunities for us.

A Little Technical Analysis Goes A Long Way

First and foremost, you’re going to want a get a good grasp on technical analysis and trading patterns. Please check out the technical analysis section of our site where I cover all the fundamental chart patterns, candlesticks, as well as indicators that you’ll need to study in order to achieve a high chance of success with trading. I also go over more detailed technical analysis over on our YouTube channel along with several different trading strategies.

If you’re more of the investor type, in which you plan on investing in numerous altcoins for the long haul, it’s still good to have an overall understanding of technical analysis.

So what exactly is technical analysis?

Technical analysis is the study of past price patterns in order to receive a high probability of a potential outcome. This tends to equip us with a unique ability to identify future opportunities of profit. You see, the cryptocurrency market, along with other markets, have a herd like mentality. The tendency for inexperienced traders is to buy when the price is high (rallying) and sell when the price is very low. We can take clear advantage of this with proper technical analysis.

It’s much easier to nail down fundamental analysis due to the fact that in today’s world everyone is able to read and stay up-to-date on the latest cryptocurrency news due to all the information we have at our fingertips. In order to become a truly successful trader, we need to be utilizing fundamental and technical analysis at all times.

Note: technical analysis is not an all-in-one strategy. It is only one of the tools we use to help execute our overall strategy.

Also be careful to not dump 100% of your funds into one single coin. Spread your funds out over several different coins or use dollar cost averaging, which I covered above.

Trading Tools For Technical Analysis

day-trading-cryptocurrency-coin-toolsTradingview, in my honest opinion, is the very best charting platform on the net. They not only offer you a free chart to hone your technical analysis skills with, but it’s also a great social networking site for both beginner and advanced traders. You can learn a lot by simply following and reading how other traders are plotting their trades.

Now simply plotting chart patterns, as if you had real money in the coin, helps a ton with learning TA, however it can never prepare you for the emotional side of trading when using your own real money. When you feel comfortable that your technical analysis skills are up to snuff, I highly recommend using very small amounts to trade with, in the your beginning stages. This will ensure you are actively trading, evolving your technical analysis abilities, as well as honing your emotional skills which will greatly come into play when trading in real time.

Other trading platforms like Coinigy are great, but they don’t even come close to the value and features that Tradingview offers. There are a number of other technical issues I found when I used it, but I’ll leave that for another article.

Build Your Strategy and Be Consistent With It

One of the surefire ways to lose money with trading is to bounce around from one strategy to the next without really utilizing one for any steadfast amount of time. Crypto traders need strategies and need to be consistent with them.

A solid strategy will always answer these questions…

  • How to protect your capital when the market turns against you (bearish trends).
  • When to take profits when you’re ahead.
  • How much to buy and sell.
  • When a strategy works or when it completely fails you (know when to hold em and fold em people).

Just remember, a solid strategy will allow us to win only half of our trading battles, and still keep us in profit.

PRO TIP: This is definitely worth repeating, finding a proven strategy that has worked for you and sticking to it is the most important thing you can do along your crypto trading journey.

With that being said, it also might be one of the toughest.  You’re not going to win them all, but if you can at least win close to half of them, you’re going to come out ahead (as well as good money management skills). Remember; don’t fix it if it ain’t broke!

Common Crypto Trading Mistakes & How to Avoid Them

We’re almost done, so I congratulate you for sticking with me so far (unless you cheated and skipped to the end). By now, you should have a fundamental understanding of how to trade cryptocurrency. Hell, you might even think this was a lot simpler than you had originally thought, so better start preparing for that “lambo life” by the end of the year right?

Yeah, yeah….don’t get too far ahead of yourself young grasshoppa. Even though some of these more simplified concepts may sound easy to grasp, the truth of the matter is, the emotional part of trading is a lot more difficult.

master-at-trading-cryptocurrencyYou might think you’re a Zen master now, but we just wait to you start trading with your own hard earned income. It’s going to take some solid work (and pain) before you really master the concepts here within this guide and the only way to do it is through experience.

When you’re playing with real money, you’ve rightfully earned, you’re going to make mistakes. Just realize that now and be ok with it. There’s not a trader out there that hasn’t lost a ton of trades. So let’s close this guide out with a few of the most common mistakes beginner traders (yes you) will make.

 

Keep Your Cool 

keep-emotions-in-check-trading-cryptoPerhaps one of the most frequent and careless mistakes a trader can make is letting their emotions get the best of them. If you have the wrong mindset, you will always lose in the long run. Set a clear goal for the day or week that you wish to obtain and “walk away” once that goal is met. Set up the same goals for losses.

If your losses for a particular day become too great, walk away and come back another day when opportunities are more present.

2-3% profit per day is a great goal for an initial investment of $1000. Reinvest that money and compound interest in order to make your profit work for you.

Protect Your Investment

Let me sum this up in one word, stop loss! That’s all there really is to say. If you don’t know what a stop loss is, read this article.  To me traders fail because they don’t set proper stop limits. This is an easy fix so don’t let it happen to you.

Let Opportunity Come To You

Use technical analysis in order to determine a particular trading strategy is open in order for you to take up a position. If you find a chart pattern that’s about to break out and have two or three indicators confirming the pattern, you should feel confident about taking the position.

Also make sure to set trading alerts for when your favorite coins reach an all-time low or break out of a major support line. Which you’re doing here is, waiting for the trade to come to you as opposed to forcing one. This will save you many painful days of regret.

Watch For Paralysis By Overanalysis

Technical analysis is not a prediction into the future. If that was the case we’d all be billionaires by now. Studying charts for hours is not going to produce consistent income. If certain charting patterns and signals for a trade don’t feel right or certain indicators are not confirming one another, then it’s best that you trust your gut and save your money to trade another day.

There will be plenty of times where chart patterns and indicators point to a potential breakout and it doesn’t happen. Don’t let it get to you as the market is made up of too many irrational factors for it to be too predictable. Continue to hone in a strategy that works for you and utilize it on a consistent basis.

 

Only Invest What You Can Afford To Lose

I know you’ve heard this statement 100 times over but it does bear repeating. There are too many stories of novice traders investing in a trade, and which they’re taking out money from their bank account or savings that they can’t afford to lose. 
This is not only a bad idea for trading crypto but for any investment opportunity. You’ll also soon realize that your emotions get the best of you when you’re trading money that you can’t afford to lose. Trading with the mindset of not giving a damn is one of the most powerful mindsets that you can bring to the table.

This is not only a bad idea for trading crypto but for any investment opportunity. You’ll also soon realize that your emotions get the best of you when you’re trading money that you can’t afford to lose. Trading with the mindset of not giving a damn is one of the most powerful mindsets that you can bring to the table.

In conclusion…

I hope this guide helps you on your journey towards monetary independence. Be sure to check out our other guides related to technical analysis, fundamentals, and our wealth of crypto trading tools which will help you out along your path to crypto millions. Good luck and happy trading!

 

Related Guides
The Best Cryptocurrency Day Trading Tips for Steady Income
Cryptocurrency Margin Trading for Beginners – The Truth Revealed
How to Trade Cryptocurrency Candlestick Patterns Like a Pro

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