How to trade bitcoins and make money
What could be better then working from home, making your own hours, and keeping your profit in our favorite currency, Bitcoin! I've been able to drop out of college, quit my shit job, and become my own boss, and this is how. This guide I've created is for people who are interested in learning to become a bitcoin trader, and have limited startup funds or knowledge of bitcoin. I want to share how i went from a pizza delivery driver, to owning my own Bitcoin trade company, and joining the newest sector of internet entrepreneurs.
This article is for those who are beginners, and want to learn how to establish themselves in the cryptocurrency trading industry. The first step in becoming a trader, is learning the types of exchanges available to use. There are many types of Bitcoin exchanges, but my personal favorite for trading is.
Other sites like Coinbase, circle, and stuff are how to trade bitcoins and make money for obtaining bitcoin on a fast notice, but charge expensive fees and require things like SSN and banking how to trade bitcoins and make money to register.
We don't want those criminal governments in our panties, now, do we? This guide will mostly focus on how I went from an investment of 1. Now, depending on your country, you will need to pay taxes on income and capital gains, but this article won't be covering things like that Create a username and account password.
I recommend a good choice in Username, because this is what buyers and how to trade bitcoins and make money will see when they conduct a transaction with you.
Would you rather do business with someone named "CityBitcoinPro" or "thenippletwister"?. You see my point? Make sure you back this up somewhere safe, like an encrypted flash drive or tattoo it on your ass just kidding. I also recommend making a Facebook business page, to increase advertising and communication response. Now that your account is created, its a good idea to set up your 2 factor authentication on your smartphone, and back up the data somewhere safe.
When activating two-factor authentication it is very important that you write down the how to trade bitcoins and make money code and keep it in a safe place, preferably on paper. If you lose access to your two-factor codes you will not be able to log in to your account and it will require a two-factor reset which takes two weeks to process. Whenever you need to log into your LBC account, or release a trade, you will need this password. Remember to back up on paper. Now that you've made your account, in the upper right hand corner, you can access your wallet.
This is Localbitcoin hot wallet server based online where you can store, send, and receive your bitcoin. It includes a calculator, and your personal wallet address when receiving. The wallet address does change every now and then, but it will not change how to trade bitcoins and make money bitcoin, so don't be concerned if you see this.
Now that you understand where your bitcoins are stored, you'l need to familiarize yourself with the types of buying and selling methods Localbitcoins provides. You can purchase bitcoin online through things like wire transfers to banks, Paypal, Venmo, cash by mail This is risky or bank deposit.
There is another option to buy bitcoins in cash in an area near you. LBC localbitcoins for short links other traders in your area to you, based on location and price.
Buyers and sellers can determine the price they wish to trade buy margin percentages, which they can determine on their own in the "Create an Ad" section. So basically, there are two different types of trades on LocalBitcoins, local trades and online trades. Online trades occur online entirely through the LBC trading platform without you ever meeting your trading partner. Most of trades on LocalBitcoins are online trades.
Local trades are meant to be carried out face-to-face, and escrow is not automatically enabled. Because of this it is not safe to pay the seller using an online payment how to trade bitcoins and make money in a local trade. It is always best to check how to trade bitcoins and make money reputation score of a trader wishing to buy or sell bitcoin face-to-face, and to meet in a public place if you don't already know the person well. Step 5 Now that you hopefully are set up as a novice bitcoin day trader on LBC, you can begin to make cash or bitcoin by buying and selling at a trade margin of your personal choice.
Localbitcoin provides a forum where traders and members can discuss different method and strategies to increase profit, and learn from each other. Be how to trade bitcoins and make money to manage your accounts profile, where you can monitor your feedback, trade completion time, and read what other users have to say.
This is Localbitcoins system of regulation. Here is a link to my accounts profile as an example. With any new technology and web service, education is the key, but I am confident that a trader that sets up his account properly and securely can make a healthy amount of income, and maybe save up some bitcoin for a future investment in this field. All other questions might be cleared up by Localbitcoins guide page, located at; https: There are many types of Bitcoin exchanges, but my personal favorite for trading is; https: Remember to back up on paper Step 3.
Here is a link to my accounts profile as an example https: Authors get paid when people like you upvote their post.
The day I first heard about Bitcoin on Reddit, a friend had also called me to tell me about it. Being 22 years old in New York City is a financial struggle. How to trade bitcoins and make money sold it all and ditched my plans for a mining rig. My financial situation needed to be stabilized before I could invest in assets based on my philosophical beliefs.
Bitcoin stayed in the news over the years. The price went up and down, silk road happened, the legality of it was called into question, exchanges were hacked, and people gained and lost millions of dollars. Ethereum hit the scene with the promise of using the blockchain for more than just currencies.
You could build decentralized apps on top of Ethereum and even new currencies. I wondered if I could take advantage of those swings by buying when the price was low, selling when it was high, and buying back in when the price dipped again. In the same period I shut down my company, Bitfountainafter running it for 5 years. Bootstrapping my own company gave me an unprecedented amount of freedom. I lived in 4 countries, traveled to many more, and only worked a few hours per day. However, since the company had run its course, I needed a new source of income.
I applied for only one job as a software engineer. It was the kind of job people love - high salary, all the Silicon Valley benefits, friendly team, well funded company, challenging engineering problems.
After three rounds of interview they decided not to move forward with me. I did want it. But I also feared losing my freedom. Gone how to trade bitcoins and make money be the days where I could spontaneously book a flight to India with no return date. Going through the interview process made the possibility of losing my freedom real. I went into panic mode searching for a way I could make money on my own.
At this point I still owned Ethereum and the price was still swinging back and forth. I signed up for two exchanges: I needed Poloniex as well because there were many cryptocurrencies being traded there Altcoins - cryptocurrerncies that are not BTC. Those are the first two exchanges that I used. Now I use others since each exchange has pros and cons.
A live crypto exchange is intimidating at first glance. There are charts and numbers changing at the speed of sight. I felt overwhelmed but sat through the confusion to try and make sense of what I was looking at.
Soon I could see where to place orders to buy and sell, and the charts started to make sense too. As the month went on I spent hours trading. I made enough to pay my rent, so the possibility of making a living from this was validated. I wanted to formalize my trading knowledge so I could do more than buy low and sell high. There had to be a real strategy to this stuff. I read as many books as I could on trading stocks and foreign exchange markets. I made a lot of mistakes. But eventually I found my rhythm and strategies.
For myself, and most crypto traders, the goal is to increase the amount of Bitcoin we own. For example, right now the price of 1 ETH Ethereum is 0. Another thing I need how to trade bitcoins and make money make clear is the type of trading I do - day trading. All of my profits are converted back into BTC at the end of each trading day.
Again, even though I buy and sell several Altcoins, at the end of the day my net worth is in Bitcoin. There are three reasons for this:. I earn more USD when the price of Bitcoin goes up against the dollar. Why was it important to clear this up? Several things were on my mind the first time I had to do how to trade bitcoins and make money. What if I sell my BTC now and the price shoots up tomorrow? Yes, but your bills will be paid. Sell now so you can pay your rent. You can always hold out for more, but at the same time you are risking a loss.
After a few months I got better at trading. I was earning more Bitcoin than I needed to cover my monthly expenses. At the end of the month I sold only what I needed, and kept the rest of my net worth in Bitcoin. Around this time in my trading career it was getting to the point where I could have bought a Tesla or put a down payment on a house by selling my Bitcoin.
Do you sell your Bitcoin to realize your profit in USD? I can live a nice middle class lifestyle in Los Angeles. Or I can drive a flashy car while I rent a crappy apartment in Los Angeles. It all comes down to your values. In fact, if i see a chart like how to trade bitcoins and make money I almost always ignore it:. The wild bull runs are hard to find, hard to time properly, and easy to go in the opposite direction how to trade bitcoins and make money you lose a lot.
Those gains are only exciting if you understand how far they can get you. Of course the numbers above assume you trade days per year. Not many people are willing to forego vacation and weekends to work as a full time crypto trader, even with numbers like that. Not only that but I also let my emotions control my trades. For example, I once purchased Stratis after the price dropped massively. My assumption was that on such a sharp decrease in price, it had to rebound eventually.
The price kept diving. I was constantly tuned into that chart waiting for an opportunity to sell back to Bitcoin. Now I have my strategy that I stick to without letting my emotions interfere.
I have a set of coins that I like trading so I only look at those charts. I have patterns and indicators that I look for on those charts so I can quickly flip through them. Within minutes I can set my orders, set alerts on my desired entry and exit prices, and walk away from the computer. As the market cap of crypto increases, be sure that the IRS is going to find out how to get how to trade bitcoins and make money slice.
And they will look into the past. I am not a tax advisor. This is a simple overview of what I keep in mind as I trade. My accountant handles my taxes, and I advise you to get an accountant to do the same. Keep in mind that this is US-centric.
You need to double check if this is the case in your country. The taxable event is when you sell your cryptocurrency for fiat. How how to trade bitcoins and make money tax you pay depends on how long you were holding the cryptocurrency. Buy crypto with fiat - no tax. Sell crypto for fiat - pay ordinary income tax. Buy crypto with crypto - unclear, but does not seem to be a taxable event.
How to trade bitcoins and make money is where things get foggy. Consult your advisor, but as far as I know this is a like-kind exchange which is not taxable but must be reported to the IRS. The exchange you use will output all of these transactions so you can hand them to your accountant.
The IRS has clarified that a crypto to crypto exchange is not a like-kind exchange. The profit made from each transaction is taxed. If you are holding a currency for more than a year it is classified as long term capital gains. This is another reason why I like keeping my net worth in Bitcoin. At least not right now. Passive income is great. After you make an initial investment, you mostly sit back and watch the money roll in. Most cryptocurrencies are mined.
You invest in a very strong computer and the electricity to run it, and you are rewarded with crypto for contributing to the network as a node that confirms blockchain transactions. This is an alternative to mining that does not require vast amounts of electricity. The idea is that you stake the cryptocurrency that you own over a wifi connection. That crypto that you stake is used to validate transactions on the blockchain, and you are rewarded more cryptocurrency for putting the currency you own in the pool.