Once you understand what cryptocurrency is, how it is sent and received, and how to responsibly store it, you are ready to begin trading. For those of you who have no interest in actively trading: stick with me. In this blog I’m going to cover new topics each day and hopefully you’ll learn a lot about crypto. It will still be helpful for you to understand the process of sending your coins to an exchange and buying/selling them.
The exchange that I do most of my trading on is Bittrex. Bittrex offers USDT pairs, ETH pairs, and BTC pairs. You can trade using any of these but BTC pairs is what I usually trade in and there are more BTC pairs than ETH pairs or USDT pairs. What this means is that the coin that you’re buying is measured against one of those. For example, if I wanted to look up the price of BTC in USD, I would type into my charting tool: “BTCUSD”. If I wanted to buy Litecoin with Bitcoin, I would type “LTCBTC”. If I wanted to buy Litecoin with Ethereum, I would lookup “LTCETH”. For USD, it would be “LTCUSD”. Before we move on, I should explain the difference between “USD” and “USDT”. USD is your standard US Dollar. USDT stands for United States Dollar Tether. Tether is a cryptocurrency that is pegged to the value of 1 USD (or as close as possible). The reason that tether exists is so that you can easily transfer your USD balance between crypto exchanges as a coin. Doing this through the traditional system of withdrawing to a bank account, then redepositing to a different exchange would take weeks. Using USDT allows it to happen in minutes. There are some drawbacks, though. Though the Tether team claims that for each Tether they print, they have an actual US Dollar in their bank account. This would ensure that each Tether is backed by actual currency. There is some speculation as to whether that’s really the case, though. I don’t have an official position on that debate, but I do use Tether because it is stable and I like to think in terms of USD sometimes, not just BTC. I keep some Tethers around at all times in case the markets dip dramatically and I want to pick up some cheap crypto. Most of the time, I trade in BTC pairs with the ultimate goal being to accumulate more BTC. Trading against a currency that also fluctuates wildly in price can be tricky. The best time for trading altcoins is when Bitcoin is going sideways and not moving dramatically in either direction. When Bitcoin goes on a bull run, altcoins tend to dump hard. There are other patterns that will be made clear just by watching the markets for a while, but we will go over those at a later time.
Opening a Bittrex Account and Making a Deposit:
- Go the official, secure Bittrex website
- Open a new account using your email and a secure password
- Once you have opened your account, navigate to the “wallet” page using the button at the top of the page
- In the small search bar on the wallets page, type “btc”
- You should see this:
- The “+” is the button you should use to deposit. Click the “+”.
- It will give you an address to deposit to. It should look like this:
- Copy the address.
- Now go to your Bitcoin wallet. For most of you, this will be your Coinbase wallet.
- Click “send”. Paste the address that we just got from Bittrex into the “To:” or “Address:” field.
- Specify an amount to send.
- Send the transaction.
- Go back to Bittrex and wait for the transaction to appear in your “Pending Deposits”. To see your pending deposits, stay on your “wallet” page. Scroll down. You should see this:
- When the Bittrex detects your incoming deposit, it will show in “Pending Deposits” along with how many confirmations it has. Confirmations are the amount of times your transaction has been approved by the network. For Bitcoin deposits, Bittrex requires 3 confirmations before the deposit is approved in your account. Depending on how busy the network is at the time of sending, this could take anywhere from twenty minutes to a couple hours.
Making a Purchase on Bittrex:
- Once your deposit is credited to your account, you should see your balance now reflecting in the “Account Balances” section on the “Wallets” page.
- When you are ready to purchase a coin, you can use the search bar to look it up quickly.
- At the top of the page on the left side, you’ll see two buttons. They both say markets, but one has a USD symbol next to it, and the other has a Bitcoin symbol next to it. Click the button with the Bitcoin symbol.
- Next, you’ll have to search for the coin you want to buy. Let’s use Litecoin (LTC) as an example.
- Now that you’ve found Litecoin, you just need to click on “LTC”. That link will bring you to an area where you can place a purchase or sell order. *This is where stuff can get confusing*
- The form to purchase Litecoin is on the left side. The top field is how many LTC you want to buy. The middle field is at what price you want to buy at. The bottom field is how much BTC it’s going to cost. Usually when I’m filling in an order, I will first put in how much BTC I am spending, then a price, and the top amount auto-calculates. When you place an order, it will either purchase it from the right side (Asks), or it will be placed on the left side (Bids). If you want to place an order that is lower than the current market price, make your price less than the lowest price on the “Ask” side. If you do that, your order will be placed in the “Bids”, and it will wait to get filled. If you want to purchase the coin immediately at market price, you can make your price equal to or greater than the cheapest price on the “Ask” side (if your price is greater than market price, it will automatically purchase at the cheapest price possible). If you do that, your order will get filled immediately and the coin that you purchased will reflect in your “Account Balances” on the “Wallets” page.
- To sell a coin, the same process applies, except that you will need to fill the form on the right side of the page.
Most exchanges follow this simple format. The three exchanges that I almost exclusively use are Cryptopia, Bittrex, and Binance.
My next post will be the first in a series of posts that will describe how I trade. I will go over what I look for in a coin, how I find coins to buy, and what kind of research I do. When I find a suitable coin.
From here on out, I may be making multiple posts a day. There is a lot to cover and time is incredibly valuable when trading these markets.
For those of you not looking to actively trade, you should have enough knowledge to make an informed decision on which of the major coins to buy and hold for the long term. If you still feel like you need help with the basics, please feel free to stay tuned in. I hope to cover a wide range of topics in this space. If you’d like to request an explanation for something that you don’t understand, DM me on twitter, message me on facebook, or simply fill out the contact form on this site.