Crypto Investing & Trading for Beginners
A simple breakdown of how you can get started, along with my biggest mistake in the game yet
*Disclaimer: The article below is for entertainments purposes only and should not be considered financial advice. You are advised to conduct your own research before taking any final action on your investments.
In this article, I’m going to show you an easy to get started with cryptos and tell you some of my opinions and experience along the way.
The good news is that anyone looking to take profits or even build generational wealth can do so with crypto investing.
Now, notice the difference between the two above. I said “take profits” or “build generational wealth.”
Both of which imply two different investment strategies.
To take profits implies someone who is looking for a short-term gain. Building wealth would require more long-term thinking.
Luckily with crypto, both can be attained. At least that is my opinion as of now. If you’re a complete beginner, there is a lot to know in the space, and this is by means a comprehensive guide to everything you should know.
Just my experience and opinion.
Investing into cryptocurrency
I recently moved all of my money onto Coinbase Pro, which we’ll discuss more below. For now, we are going to be talking about her little brother, Coinbase.
For those you know do not know, Coinbase is the only crypto exchange listed on the New York Stock Exchange and is arguably the most trusted and secure place to buy crypto.
It’s a good place to begin if you haven’t already. The only other crypto platform I can vouch for is WeeBull. But Coinbase is better for beginning investors.
Binance is technically the largest and most popular exchange in the world but isn’t legal for American’s, and they do not have the best reputation. For those interested, there is binance.us.
But again, you should download Coinbase.
After downloading Coinbase and getting your account set up with the necessary identity and bank data, you’ll be presented with a screen that looks something like this:
This is your Coinbase home screen. Well, actually, it’s my Coinbase home screen. But you get the idea. Here you‘ll see your current portfolio balance, any news that Coinbase decides to share (like newly listed Coins), and lastly, your watch list.
Your watchlist is just what it sounds like; assets that you’re interested in watching and keeping an eye on. To add an asset to watch your watchlist, click the star next to each asset. Simple enough.
If you go over to prices, you can scroll and see all the different assets available for purchase. There are dozens. They’re listed in order of market cap, from the largest to smallest. We can see Cardano has rallied into 3rd place this last two weeks.
If you click the little blue arrows on the bottom of the previous screen, you will be presented with options that really showcase all that you’re able to do on Coinbase. Buy, sell, send, receive, or convert your cryptocurrency.
Not too shabby.
Actually, it’s freakin’ incredible. I’m a big fan of Coinbase.
Coinbase is great because of its ease of use, accessibility, and trustworthiness.
Assume you’ve never used an investment or trading app of any kind before. It may take a few moments to get used to the layout and format like anything new. But once you have it down, it’s pretty manageable stuff.
Newbie tip:
After adding cash from your bank, buy $USDC as your first crypto investment with whatever amount you plan to invest initially. After that, convert your $USDC into whichever coin you want to invest in. If you don’t already know, USDC is a stable coin, and its value always equates to USD 1.
You’ll want to do this because you’ll be charged higher fees if you buy crypto with fiat USD, whereas converting USDC into any other crypto of your choice has a much smaller fee. You are essentially converting the dollar into the digital version of such. It is less expensive.
Make sure you understand stable coins and why they are used. I would also advise sticking to USDC and not other stable coins like Dai or Tether. Tether has some major speculation going on right now that I will let you look into on your own time.
After you have funds in your account and start investing in the portfolio of your choosing, congratulations — you are now holding cryptocurrency that will either appreciate or depreciate over time. Woo hoo! Hopefully, the former.
Coinbase is an awesome platform that is great for new people getting into the crypto sphere.
Benefits of using an app like Coinbase
- It’s extremely reliable and trustworthy
- It’s U.S. regulated
- Overall best place for new crypto investors to get started
- Coinbase has a visa debit card where you can spend your crypto or USDC and earn interest in the form of crypto
- In an instant, you can choose which asset you would like to choose for spending; and earn cashback + interest in the form of other cryptos. ( Celsius offers up to 17% for staking your crypto, and there are others like it)
- If you choose to stake your Coins, you can even earn more for just letting your capital sit if you don’t plan on using it. ( Celsius currently offers up to 17% for staking your crypto, and there are other projects like it)
Advanced Trading
I’m sure you’ve heard of day trading before. While many people may have heard of it, many people may not know how or where to get started.
Day trading is the act of buying and selling an asset within the same day, but usually in an even smaller time period, say 3–6 hours. Sometimes less than that.
Day traders are seeking to capitalize on the market's volatility to make short-term profits.
Day trading crypto can be great and very lucrative — if you know what you are doing. You may not exactly be a day trading expert if you are anything like me, but you still find value in learning and testing the waters. Even if you don’t plan on becoming a full-time trader — I’d argue it’s a great skill to know.
Day trading usually involves using a more robust, advanced user interface like the one Coinbase Pro offers and usually looks a little something like this:
If this interface looks intimidating to you, don’t worry — you’re not alone. I did not have anyone to teach me at first, so I took some time to figure everything out and make things easier for you.
For starters, Coinbase and Coinbase Pro, on a fundamental level, do the same thing. Buy and sell cryptocurrency. But there are a few key differences between the two.
The biggest difference between an ordinary investing app and a professional trading exchange is how the information is displayed to you.
On a professional exchange like Coinbase Pro, you can view the chart on a much more precise level, which gives you greater control over the accuracy of when you enter and exit a trade.
You also have a real-time visual of the trading volume (bottom center; green & red areas), as well as the ability to see other people's trades coming in on the left and right sides of the screen.
The former two things can fluctuate at such a rapid pace and are constantly moving. Because of the ability to see the markets on such a speculative level 24 hours a day, 7 days a week, it creates this dramatic sci-fi-like reality where you feel like you’re tapping into something powerful, exhilarating, and potentially dangerous — all at once.
Advanced-trading benefits
- Granularity of market data in real-time
- Instant trades
- More accurate trades (.0001)
- Execute trades to go off at a specific price when your not looking
Here’s a screen recording of one of the most intense trading moments I’ve had to show you what can happen.
In this clip, my portfolio balance went from $1400 to over $2400 in ten minutes. I had boughten into this coin a few days previous and had almost sold it the night before.
I was baffled. I could barely think straight about what to do. I choked it by getting greedy and thinking it would continue its hike up. Learn from my amateur mistake, and sell at the top, especially when you’re up 146%.
The downsides to advanced/day trading
Because of the things I mentioned above, many people tap into the markets expecting they will come out winners. They feel overconfident, in control, and feel like they have the ability to outsmart the market. Or at least that’s how I have felt before.
The reality is that unless you are a professional trader on Wall Street or know how to accurately set your trades based on technical analysis of the chart, you are likely to make uneducated, emotional, and potentially costly mistakes.
Being able to tap into the market in real-time on a professional exchange is a double-edged sword if you do not have patience or discipline.
With some of these coins, a lot can happen in a single day, or even in twenty minutes. When you see the price of something flying through the roof, you may be tempted to take your money out of one investment just so that you can try and chase what appears to be an aggressive uptrend in something else.
Sometimes this works great. Most of the time, it does not.
By the time you buy into the asset that you thought was going to keep going up, you realize that you bought at the worse time (when the price is up) and that if you had thought more carefully, then maybe you would have made a wiser decision.
Some of these coins can boost by 50%, but they will come back down again, which will leave you at a loss in the short term if you go chasing things in the green. Not a profit.
Greed and impatience will drive an investor to lose all of their money in a short amount of time. This was why I suggested initially, and upfront that people wanting to take gains should ultimately buy and not sell — at least in the immediate short-term.
Closing
There’s no harm in throwing a few bucks on Coinbase Pro and seeing what you can do in there, but ultimately — don’t go trading away every last dollar you have to your name.
Everyone:
- Study the markets and what’s going on within each project
- Decide on which coins you think have the most solid and applicable use-cases for future technologies
- Build out a balanced portfolio of 3–6 coins that you believe in
- HOLD
If you're going to day trade:
- Learn how to read a chart using basic technical analysis so you can get a better grasp on how it is likely to move
- Make sure you know how to use all of the features offered on your exchange
- Make sure you understand the difference between market, limit, and stop buying/selling
Lastly
Trading and investing can be counterintuitive at first.
After all, why buy something that looks like it’s down, beaten up, ignored, or in the red?
Ew.
Well, if you take a moment to study the chart and the fundamentals of the project that you’re investing in, chances are more than likely that it will rise in price again somewhat soon; and you want to get in at a good price before that happens.
Of course, everyone’s experience is different, and I hope that this little tutorial helps anyone interested in getting started.
Now is a great time!
Cheers
