Intelligent Trading Foundation (ITF) is no longer in a position to continue active development of our full suite of products. However, our products will remain online and available for our users as long as possible. See more information here.
This post is a guide for newcomers to crypto trading. Below we will detail the basic steps to getting started, from purchasing your first coins, to trading on the exchanges, and to securing your investments. We’ll also include some general tips to best choose and manage your crypto.
Assuming you are already familiar with wallet solutions and have set up a hardware wallet to secure your funds, the next step is choosing an exchange.
To begin, you’ll need to choose an online exchange platform. Next, you’ll need either Bitcoin (BTC) or Ethereum (ETH) in order to trade other cryptocurrencies on the market (more on this below).
It’s important you choose a reputable exchange that keeps the majority of user funds offline and trades in large volumes. There are a number of options available in this regard, some with more user-friendly interfaces than others, so do your research and shop around for what platform suits you best.
Some reliable exchanges you may want to consider at the start are Binance, Bittrex, and Coinbase, but you’ll want to find out in what ways they differ: e.g. what fiat currency they accept, what crypto they trade, transaction times and fees, platform history and security, etc.
* Warning: Exercise great caution with your money!
When you choose to send funds to an exchange or store your assets online, you have to rely on the operator to maintain secure systems that safeguard against internal or external theft. Further, storing your assets on an exchange for long is not recommended. Any assets you have should be safely secured on an offline device when you are not trading.
After choosing your exchange, you need to first set up your account and then you need BTC or ETH to get started. You can purchase these by exchanging fiat currency using a bank transfer or credit card, and then you can use your BTC or ETH to trade for other crypto assets.
The purchase process on these exchanges can be complicated for beginners, so here we’ll focus on the steps fundamental to getting started, using the Bittrex exchange platform as an example. Other exchanges will function similarly, and although their user-interface and tools available will vary from one to the next, the following 5 steps can give you a general idea of how to get started on any platform:
1. After registering with your exchange and starting an account, locate the ‘wallet’ tab. Here you will find a list of all altcoins on the market, their ticker symbols (e.g. BTC or ETH), and your ‘+/-‘ tab for your deposits and withdrawals.
2. Choose ‘+’ or ‘Buy’ either BTC or ETH and choose your payment option (credit card, bank transfer, etc.).
3. When you have your BTC or ETH, the Bittrex homepage offers you the best view on the list of altcoins available. This is where you find a list of all the currencies sorted by name, trading volume, biggest gain, top value, date released on the market, and other parameters for consideration. (See the following section for more on how to choose and manage your investments.)
4. Choose the altcoin you want to purchase and find the ‘order book’ tab on Bittrex or the platform you’ve chosen. ‘Order book’ shows a list of ‘bids’ and ‘asks’ in which you will find users trying to buy and sell their coins. This is where you will either make your bid for an altcoin or outright purchase with BTC or ETH.
Note: there are additional tools from platform to platform to help you make informed decisions, so you will want to read some guides or watch some videos on the specific tools for your platform.
5. Now that you know what altcoin you want, your final step is making the purchase. Let’s say you want to buy Monero (XMR) with the BTC you now own. You can make a bid yourself and wait for the order to be confirmed, which will take some time depending on your bid and the current state of the market, or you can purchase from somebody who is asking for a price you are willing to pay.
If you have chosen to do the latter and have found a Monero price reasonable for you, click ‘buy’ on Monero to begin the process. On the next menu, double-check that the price is set up properly and to your parameters, and click ‘buy’ again to fill your order and convert your BTC to XMR.
Now you can decide to trade or sell your XMR for profit, or you can send it to your hardware wallet for safe storage until a later date.
Additional note: typically on every exchange you can cancel your unfilled orders without any transaction fee. So if for any reason you want to cancel an order, you can do so as long as you do it before the order has been filled.
Now for the part that requires research. If you want to maximize your profits and better manage your asset class percentages, you need to stay up-to-date and be familiar with the crypto market.
You need to know the difference between the many forms of crypto assets—there are varying forms of currencies and commodities, platforms and tokens—and you need to judge how and when to invest, buy, sell, or trade. (Learn more about crypto classifications.)
To get you started, here’s some general rules of thumb when deciding what altcoins to purchase:
1. Choose a coin backed by a solid technology that offers sustained value over time. Icon (ICX) for example, offers blockchain solutions for universities, hospitals, and financial services.
2. Research, research, research, and always stay up-to-date with the latest tech news. The more you know, the more you can manage your risks and rewards. Check out community-discussion on forums like Reddit and 4Chan, and keep in mind that the best advice often comes from like-minded traders and investors rather than expert opinions.
3. Follow the trading volume of your coins. Knowing the demand for a coin is particularly vital, as you do not want to invest in a coin which is not easily sold at a later time.
4. Consider using charting tools or trading bots (like the Intelligent Trading Foundation trading signals bot) to better monitor your assets. Instant alerts and charts can notify you of trading patterns which you can use to leverage and maximize profits.
5. Never store your assets on an exchange for long. (If you haven’t already, see our post about how to safely store and secure your crypto.)
With so many ways to diversify crypto-holdings over many different altcoins and exchanges, tools used for tracking crypto investment portfolios have risen in demand and popularity in recent years.
Creating individual portfolios can be a daunting task for traders, but it is especially crucial in today’s world now that the US General Accounting Office has declared that gains in crypto are subject to taxation.
This affects not only traders, but also employees who are paid their salaries in cryptocurrency. While these employees are paid at a fiat-equivalence of crypto when they are issued pay, if that employee decides to later sell their holdings for a profit, this is considered a capital gain and should thus be reported for tax purposes. This is in part why tracking and portfolio tools have become so vital to traders and investors alike, helping to accurately record and report gains and losses while ensuring adherence to all financial and legal obligations at tax time.
Thankfully there are a number of tools developed and under development which can help traders centralize their assets into one portfolio. There are web-based tools, desktop and mobile apps, and personal finance trackers now offered by exchanges; so it’s important to find which tools meet your individual needs and preferences.
Below we’ve listed some of the more widely-used trackers along with links and brief descriptions of each for you to research:
Blockfolio: this mobile app available on both iOS and Android is a free management app which supports up to 3000+ cryptocurrencies. It allows users to view their portfolio in 60+ fiat currencies, and it comes with several features, including: Blockfolio signal, a customisable news feed for users to connect directly with crypto leadership teams; up-to-date exchange prices and market analysis; tracking profit / loss and cost basis; pricing alerts and more. One downside to this app is that it is mobile-only; however, Blockfolio has announced plans for an upcoming desktop version.
CryptoCompare: this is one of the most noteworthy providers in streaming pricing data for cryptocurrency. They show the performance of major coins and a wealth of altcoins, both in fiat currency value as well as interconnected exchange rates across platforms. The portfolio tracking app is web-based, but it should be noted that it is not too mobile-friendly.
Mint Bitcoin finance tracker: Coinbase and Mint.com have teamed up to include Bitcoin tracking within Mint’s personal finance app. They boast of being the only personal finance app which allows users to track their bitcoin holdings. Users can track their bitcoin value at any time, on their computer or mobile device.
Cointracking.info: this portfolio provider has a lot to offer, but for a price. They integrate with exchanges, they have API importers, dashboards and charts, coin trends for 5000+ cryptocurrencies, and more. Ultimately, they are a feature-rich finance, tax, accounting, and strategic planning dashboard for crypto, but usage does come at a subscription price of roughly $200 USD annually.
Altpocket: this free-to-use portfolio app is advertised as a way to showcase your altcoin and cryptocurrency investments, offering a platform similar to social media networks which allows users to share their portfolios and performance, gain followers or follow others. It allows you to input Poloniex and Bittrex API keys to get trades automatically, or users can also input trades manually.
When you are ready to transfer assets from your exchange to your hardware wallet, the process is very similar to that of trading for altcoins.
For ease of explanation, we’ll use Bittrex as the example exchange platform and the Trezor as the example hardware wallet. The process will vary between exchanges, the Trezor, or the Ledger Nano S, but they should nonetheless be similar to the following steps:
1) Access your ‘MyTrezor Web Wallet’, and then select the account you wish to use. If you are a first time user, this will likely be ‘Account #1’.
2) Enter this account and you will see an empty ‘Transactions’ tab. Inside this tab, find ‘Receive’ and click to generate your first receiving address. This is the address you will use to transfer funds from your exchange.
3) Double-check that the receiving address you have just generated on your browser is the same as the address shown on your Trezor.
The Trezor has a feature “Show on Trezor” which will display the receiving address on the device. Compare the address shown here to the address generated on your browser to ensure the address was created by your Trezor and not by a hacker who has deceived your browser into showing a fake receiving address.
Double-checking on your Trezor, you should see something like this:
Once you are satisfied the address is in fact yours, copy this address and go to Bittrex or the exchange platform of your choice.
4) On the exchange, go back to your ‘wallet’ tab, and find the ‘-‘(subtraction/withdraw) key next to the altcoin you wish to send to your hardware wallet. After clicking the subtraction key, you will be asked to fill in the receiving address for your transfer. This is where you will paste the receiving address for your Trezor wallet and confirm your withdrawal.
5) Afterwards, this withdrawal will show up in your ‘pending withdrawals’ (see image above) until confirmation, at which point your crypto will be safely stored in your hardware wallet.
Additional note: you can generate multiple receiving addresses on your Trezor. You may want to do this later in order to organize payments from employers versus for example, private business agreements or contracts you may also have.
Bittrex and many other exchanges will not allow you to cash out directly from altcoins, so you must first exchange your altcoins for major coins (like BTC or ETH) that have trading pairs with USD on other exchanges. This will allow you to move your major coins to an exchange which trades for USD or other fiat.
The example below details how to use Bittrex to trade altcoins for ETH, transferring ETH to GDAX, and finally cashing out ETH to USD.
1) First and foremost, you need to register with an exchange which trades in fiat. Say you have chosen Coinbase Pro and set up your coinbase wallet there. This is where you will ultimately cash out. Find your receiving address on this platform, and go to the exchange where you have your altcoins.
2) Now you need to trade these altcoins for major coins. Say you’ve chosen to trade your Cardano (ADA) for Ethereum (ETH).
From the Bittrex homepage go to ‘Ethereum markets’ and choose ‘ETH-ADA’. This is where you will trade your altcoin for ETH.
3) Next, enter the amount of ADA you wish to trade and go to ‘price’. Here you can compare current market asks and bids from ADA to ETH. You may want to sell for ‘last bid price’ or you can manually enter your own price.
When ready, click ‘sell’ to bring up a confirmation box. Double-check that all of your parameters were entered correctly and then click ‘confirm’ to begin the process of executing your trade.
(Note: Cancelling unfilled orders has no transaction fee. If your trade does not execute quickly, you can cancel and try again without penalty. Your pending trade will be visible in ‘order books’ for you to monitor.)
4) After you have a balance of ETH, go into your Bittrex wallet to make a withdrawal. Use the subtraction tab next to your ETH balance to open your transfer window, and then choose how much ETH you wish to send and fill out the recipient address field using your GDAX wallet address from step 1.
Again: double- or even triple-check that all of the parameters from transaction amount to recipient address are correct before confirming; one tiny mistake here and your funds are lost!
5) If you put in your Coinbase Pro address correctly, you will have your ETH as soon as the order is executed. Now, finally, you are ready to cash out.
From your wallet, next to the ETH balance, choose ‘sell’, enter the amount you wish to sell for USD, and Coinbase Pro will transfer fiat into your bank account.
Ultimately, all you need to get started trading is a cryptocurrency wallet (or two), and a cryptocurrency exchange (or two). Know that there are countless other options for wallets and exchanges beyond those mentioned above, so choose a company with a good reputation and with an interface and features which meet your needs and preferences as a user.
To restate and simplify some of our main points from above, remember:
1. Get a hardware wallet to store your assets offline when not trading. We recommend either the Trezor or the Ledger Nano.
2. Understand the tax implications of trading crypto and give thought to making a portfolio to keep track of your investments, savings, and spending.
3. Beware of investing in altcoins which you are not familiar with. Stay up-to-date with the latest tech news and community discussion to choose coins which are in demand and easily sold later on.
4. Consider using charting tools or trading bots to better manage and monitor investments.
5. And finally, again, keep in mind that your security is in your hands only – we can’t say this enough – if you fall victim to Trojans, malware, or password-stealing viruses, your assets will be forever lost.
Whether you are a seasoned trader or a beginner, our Telegram Bot will do all the grunt work so you can focus on making the most informed trading decisions.