CryptoMeister Cryptocurrency Investment eBook v2

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The Cryptocurrency market is exploding! Get in on the action with CryptoMeister's step-by-step eBook in Cryptocurrency Trading. Learn How to Buy & Sell Bitcoin and Altcoins on the Exchanges, Market Research & Analysis, ICO Investing, Risk & Money Management & much more

Tabl eofCont ent s Chapt er1:TheTec hnol ogy&TheCoi ns...............................5 Chapt er2:TheWal l et s&TheExc hanges..............................18 Chapt er3:How t oTr adeCr ypt oc ur r enc i es............................34 Chapt er4:Mi ni ngCr ypt oc ur r enc y...................................40 Chapt er5:Tr adi ngSt r at egi es.......................................46 Chapt er6:I CO’ s( I ni t i alCoi nOffer i ng)................................56 Chapt er7:Anal ys i s&I ndi c at or s.....................................68 Chapt er8:Ri s k&MoneyManagement...............................85

About CryptoMeister Learn how to take your cryptocurrency trading to the next level! CryptoMeister is a leading cryptocurrency trading and investing education provider. Our courses have been created by experts with real-world trading experience for both new traders and those with previous experience. With our cryptocurrency trading courses, you too can learn the basics of trading cryptocurrency and can confidently start trading alone. Our Cryptocurrency Trading eBook is divided into eight key chapters. Each easy to follow chapter is further broken up into several learning sections. Regardless of where you are on your learning path, CryptoMeister strives to constantly develop the most comprehensive cryptocurrency trading courses available. We team up with industry pros, have expert instructors and perform constant market research to ensure our information is always up to date. We want to provide an authoritative voice on cryptocurrency trading that will help to increase the success rate in your trading career.

Cryptocurrency Trading eBook

CryptoMeister. io // By Aedan Kelly

Aboutt heAut hor AedanKel l y Pr of es s i onalDayTr ader Aedan Kel l yi s a pr of es s i onalday t r aderwi t hovers i xyear soft r adi ng exper i enc e,wi t ht hr eeyear sofc r ypt oc ur r enc yt r adi ngexper i enc e.Unt i l 2014,Aedan wor ked f ul l t i me asa t r ai nerf oranHRfir m,s pec i al i z i ngi n new empl oyee educ at i on and i nt egr at i on.Aedanbr i ngshi ss ki l l sasa pr of es s i onalt r ai nerAND t r adert o Cr ypt oMei s t ert o makeeac hl es s on ac c es s i bl et oever yt r ader–r egar dl es sofexper i enc el evel .

Cr ypt oc ur r enc yTr adi ngeBook

Cr ypt oMei s t er . i o/ /ByAedanKel l y

Chapt er1:

TheTec hnol ogy&TheCoi ns Over vi ew Bl ocks&Bl ockchai ns Bl oc ksar epac kagesofdat a. Thec r i t i c alpar tt or emember her ei st hatt hes ebl oc ksc ar r y per manent l yr ec or ded dat a. As t r ans ac t i ons happen, i nf or mat i on f oreac h one i s c ol l ec t ed,t hen val i dat ed by t he net wor k.Event ual l y,t he dat a wi l l r eac h a pr edet er mi neds i z eandt hen c ombi nedi nt oabl oc k. Ast hes ebl oc ksar ec r eat ed,t heydon’ tc ont i nuet oexi s tal oneand s epar at e.Theybec ome l i nked wi t h ot herbl oc ks ;t hi si swhati s c al l ed a Bl oc kc hai n.A bl oc kc hai ni t s el fi sa fil e,a s har ed publ i c j our nalorl edgeroft r ans ac t i ons ,andac t sasahi s t or i c alr ec or dof t hos et r ans ac t i ons–f r om t hefir s tbl oc ki nt hec hai nt ot hel at es t– c ont i nuous l ygr owi ng.Abl oc kc hai npr ot oc olr unsonaP2Pnet wor k ofc omput er st hatal lr unt hepr ot oc olandhol dani dent i c alc opyof t hel edger .Whi l ei ti spubl i candt her ef or eever yonec ani ns pec ta bl oc kc hai n,nos i ngl eper s onc anc ont r oli t .I ti sc r ypt ogr aphi c al l y s ec ur edf r om bei ngt amper edwi t h.

Cr ypt oc ur r enc yTr adi ngeBook

Cr ypt oMei s t er . i o/ /ByAedanKel l y

Cr ypt ocur r ency Cr ypt oc ur r enc yhasbeengi venaf ew names :di gi t alt okensorj us t t okens , di gi t alas s et s , di gi t alc ur r enc y, vi r t ualc ur r enc y, di gi t alc oi ns , et c . Es s ent i al t hough, c r ypt oc ur r enc i esar ej us tat ypeofdi gi t al as s et us edasamedi um ofexc hange.Theyar eal ls t or edi nabl oc kc hai n, eac hbl oc kc hai nhavi ngi t sowndi gi t alc oi n.Theor i gi nalandmos t known c r ypt oc ur r enc yi sBi t c oi n.Al t c oi nsar eal lot her .Exampl es ar eEt her , Li t ec oi n, Moner o, Das h, Zc as h, et c . andeac honehast hei r ownpr oper t i esandf unc t i ons . Hi s t or i c al l y, t r adi t i onal c ur r enc i es ar e bac ked by a phys i c al c ommodi t yl i kegol dors i l ver .‘ Fi at ’c ur r enc i es ,l i ket heU. S.dol l ar , ar el egalt ender sdec l ar edbygover nment st hatar ebas edont he r el at i ons hi p bet ween s uppl yand demand and t he c r edi toft he ec onomy.I tdoes n’ thaveani nt r i ns i cval uei t s el fasi ti sj us tpaper moneyandphys i c alc oi nsmadeofl owval uemat er i al s . Bec aus e ofbl oc kc hai nt ec hnol ogyand t he wayc r ypt oc ur r enc i es wor k,youar epur c has i ngwhatc oul dbec ons i der edat ec hs t oc k. Thet er mc r ypt oc ur r enc yi sf r om t hec ombi nat i onofc r ypt ogr aphy whi c hi st hepr ac t i c eoft ec hni quesf ors ec ur ec ommuni c at i onand c ur r enc ywhi c hi smoneyi nanyf or m.However ,c r ypt oc ur r enc i es havemor ei nc ommonwi t hs t oc kst hant heydowi t hc ur r enc i es .

TheHi s t or yofBl ockchai nTechnol ogy& Cr ypt ocur r enci es Bl oc kc hai ns ar e a new t ec hnol ogy t hat i s made up of ol d t ec hnol ogi est hathave been i n us ef ort hous andsofyear s .For exampl e, us i ngt okens , c oi nsorbi l l st hatr epr es entaval ueasaf or m ofpayment .Anot heres s ent i alpar toft hi sequat i oni sc r ypt ogr aphy andasment i onedpr evi ous l yi st hepr ac t i c eoft ec hni quesf ors ec ur e

Cr ypt oc ur r enc yTr adi ngeBook

Cr ypt oMei s t er . i o/ /ByAedanKel l y

c ommuni c at i on butundert he eye oft hi r d par t i es .Bl oc kc hai ns t hems el vesar el edger s .Ledger shavebeeni nus ef ort hous andsof year st or ec or dfinanc i alt r ans ac t i ons . Thec onc eptandt het ec hnol ogyt hati sc r i t i c al t ot hec r ypt oc ur r enc y mar ket t oday wer e fir s ti nt r oduc ed i nt he f al lof 2008 i na whi t epaper .I twasi ni t i al l ypar tofapr opos alf ort henow f amous , Bi t c oi n,wi t ht hepur pos eofc r eat i ngapeert opeermoneyt r ans f er s ys t em wi t houtt heneedf orbanks . I n2009, i twasr el eas edasopens our c eds of t war e. Asani nt er es t i ng s i denot e,t hewhi t epaperwaswr i t t enundert henameofSat os hi Nakamot oandt ot hi sdat ei ti snotknownwhom t hi sper s on( or peopl ear e) . The bl oc kc hai n t ec hnol ogy i nnovat i on al l owed Bi t c oi n t o be c ons i der edt hefir s tdi gi t alc ur r enc yt os ol vet hedoubl es pendi ng pr obl em.Doubl es pendi ng oc c ur swhen s omeone c an eas i l yl i e aboutr ec ei vi ngc ur r enc yands pendi tt wi c ewi t haver yl ow c hanc e ofbei ngc aught . I n2010, ‘ Nakamot o’ whohadbeenwor ki ngwi t hot heropens our c ed devel oper s on Bi t c oi n dec i ded t os t ep away f r om t he pr oj ec t . Cont r olwashanded overt ot r us t ed and pr omi nentBi t c oi nc or e devel oper s . 2011s aw t hei nt r oduc t i onof‘ al t c oi ns . 'Thes ec oi nsar ec ons i der ed t obeanyc r ypt oc ur r enc yot hert hanBi t c oi nandar ec r eat edf r om ‘ f or ks ’ ofBi t c oi n.Af or ki swhent hedevel oper sofac r ypt oc ur r enc y dec i det oc hanget hepr ogr ammi ngofac oi n.I deal l y,t hi si sdonet o upgr adet hec odeofas pec i ficc oi nt ohel pi tflour i s h.I n2011, t hes e f or ks wer ec r eat ed t oi nt r oduc ec r ypt oc ur r enc y al t er nat i ves t o Bi t c oi n.Si nc et hen hundr edsofnew c r ypt oc ur r enc i eshavebeen devel opedandar egai ni ngmar kets peedver yqui c kl y.

Cr ypt oc ur r enc yTr adi ngeBook

Cr ypt oMei s t er . i o/ /ByAedanKel l y

TheFut ur eofBl ockchai n&Cr ypt ocur r enci es Gover nmentandBankAdopt i on Thec onc eptoft hebl oc kc hai nwasc r eat edt os ol vet hepr obl em of di gi t alt r us t .Many i nt he c r ypt oc ur r enc ys pac ef eelt hatt hi s t ec hnol ogywi l lal l ow ourwor l dt o oper at e ent i r el yonl i ne.They bel i evet hi sbec aus ebl oc kc hai nt ec hnol ogypr ovi dest heabi l i t yt o r ec or di nf or mat i on i n an ar eat hatc an’ tber emoved and al l ows ever yonet os eec hangest hatdooc c ur .Thi smakest hepr obl em of dec ept i onandt amper i ngmor edi ffic ul t .Thi si st heoner eas onwhy many ec onomi c exper t s ar e begi nni ng t os pec ul at et hatwor l d gover nment sand bi g financ i ali ns t i t ut i onswi l levent ual l yc r eat e t hei rown c r ypt oc ur r enc yoratl eas t ,i nc or por at e as pec t soft he t ec hnol ogyi nt ofiatc ur r enc i es .

I ncr eas edCompet i t i on Whi l eBi t c oi nandt hes ec ondc l os es tr i valEt her eum ( whi c hi st he pl at f or m Et heri sus edon)havepr ovent heyhaves t ayi ngpower , t he mar ketandt ec hnol ogyar ec ont i nuous l yexper i enc i ngi nnovat i on. Expec tt os eepot ent i al l yunknownc oi nsbec omes t r ongerast her e i sr oom f or mor ec ompet i t i on even wi t h t he hundr eds of c r ypt oc ur r enc i esal r eadyont hemar ket .

I COsWi l lChangeHow Compani esRai s eCapi t al An I CO ( I ni t i al Coi n Offer i ng) i s an unr egul at ed means of c r owdf undi ng.I COsar ebec omi ngan at t r ac t i veopt i on ofr ai s i ng c api t alf ors t ar t ups ,orevenf ormor ees t abl i s hedc ompani es .For exampl e,t her ewoul dn’ tbeaneed t o per s onal l yfind,meetand c onvi nc ei ndi vi duali nves t or st oi nves ti nyourbus i nes sasanyone c anpar t i c i pat easanI CO i nves t oronl i ne.

Cr ypt oc ur r enc yTr adi ngeBook

Cr ypt oMei s t er . i o/ /ByAedanKel l y

Regul at i onsWi l lBeCr eat ed Ri ghtnow,t he c r ypt oc ur r enc ymar keti si n an awkwar d gr owt h s t ageandgover nment s ,banksandot heroffic i al sar es t i l lt r yi ngt o figur e outhow t o handl et hi st ec hnol ogy.El ena Kvoc hko,Chi ef I nf or mat i onOffic eroft heSec ur i t yDi vi s i onatBar c l ays , s ai dt hather bankhadt al kswi t hr egul at or saboutBi t c oi n,bl oc kc hai ns ,andt hei r i l k.Theoffic i al sappeart obeopent ot hei deaasl ongas“ knowyour c us t omer ”l awsar eobeyed,andc ount r i esar eal r eadyc omi ngwi t h waysofac c ommodat i ngt henew t ec hnol ogy.

TheMar ketWi l lBecomeMor eSt abl e Cr ypt oc ur r enc ypr i c esc ananddofluc t uat e,s omet i mesdr as t i c al l y. Bi t c oi n,t he ol des tofal lt he c oi ns ,hasgr adual l ybec ome mor e s t abl eovert heyear sands ot her ei sar eas ont obel i evet her es tof t hemar ketwi l laswel l .Thec as ef ort hi sdependson whet hera s t r ongar gumentc anbemadet hatbeat sus i ngt r adi t i onalmoney. Thehopei st hatasmor eandmor eoft hewor l dbegi nst oi nt er ac t wi t h eac h ot her onl i ne,c r ypt oc ur r enc i es wi l lbe mor e of an at t r ac t i veopt i onbec aus eoft hei rmanybenefit s .

Cr ypt ocur r enci es Wi l l For ce Payment Pr oces s or st o I mpr ove Payment pr oc es s or ss uc h as Vi s a or Mas t er c ar dc har ge f ees wheneveryouus eyourc ar ds .I thasbeenpoi nt edoutbyNi c kovan Somer en, Chi efTec hnol ogyOffic eroft heLi nuxFoundat i on, t hatt he c har geexc eedst hec os tt oc l earors et t l et r ans ac t i ons .Shoul dt he wor l di nc r eas ei t sadopt i on ofc r ypt oc ur r enc i es ,t hi sc oul df or c e t hes e paymentpr oc es s or st o bec ome mor ec ompet i t i ve.Thes e c ompani es ,aswel lasbanks ,woul d need t o adj us tt hei rpr i c i ng c l os ert ot her ealc os tofhandl i ngt r ans ac t i ons .

Cr ypt oc ur r enc yTr adi ngeBook

Cr ypt oMei s t er . i o/ /ByAedanKel l y

TheFundament al sofCr ypt ocur r encyTr adi ng Theyar eI r r ever s i bl e-NoMat t erWhat Onc eat r ans ac t i onhasbeenc onfir med, i tc an’ tbec hanged; t hi si sa c r uc i al poi ntt or emember . I fyous entyourf undsbyac c i dent , t ot he wr ongper s onorwor s e,s omeonewhohass c ammedyou–t her ei s nowayt ogett hem bac k.

Fas tTr ans act i ons Tr ans ac t i onshappenf as t–wi t hi nmi nut es .Noneedt owai thour s orevendays .Nomat t erwher eyouar ei nt hewor l d, nomat t erhow c l os eorf aryouar et ot heper s onyouar es endi ngc r ypt oc ur r enc y t o.Fas tt r ans ac t i onsc ombi nedwi t hi r r ever s i bi l i t ymeansyouneed t opayat t ent i ont owhatyouar edoi ng.

NobodyKnowsI t ’ sYou Bac k when c r ypt oc ur r enc y fir s ts t ar t ed out ,pr i vac y and bei ng anonymouswases s ent i alt oear l yt r ader s .Today,i t ’ ss t i l lc ommon f ort r ader st oc r eat eal i as ess ot hatal lt het r ans ac t i ons ,ac c ount s , ands t or eddat ayouhavec an’ tbet i edt oyourr eal wor l di dent i t y. Thi smi ghts oundabi tpar anoi d, butt hes ys t em i ss etupt opr event i dent i t yt hef t .Forexampl e,c r edi t sc ar dsus ea‘ pul lmet hod. 'When youus eyourc r edi tc ar dt opayf ors omet hi ng,youar egi vi ngt hat mer c hantt her i ghtt oac c es syourf ul l c r edi t .Themer c hantpul l st he moneyf r om yourc r edi tc ar dac c ount .Cr ypt oc ur r enc y“ pus hes ”t he t r ans ac t i oni ns t ead,meani ngyous endt heexac tamountwhatyou wantt ot her ec i pi entandt heydon’ tgetac c es st oanyaddi t i onal i nf or mat i on.

Cr ypt oc ur r enc yTr adi ngeBook

Cr ypt oMei s t er . i o/ /ByAedanKel l y

YourFundsar eSaf erThani naBank Ther ei saver ys t r ongmeas ur ei npl ac ewher eyourc r ypt oc ur r enc y f undsar el oc ked i n.I t ’ sc al l ed apubl i ckeyc r ypt ogr aphys ys t em whi c hmeansonl yt heowneroft hepr i vat ekeyc ans endt hemoney. Remembert hepr evi ouspoi nt–i t ’ sa“ pus h”t r ans ac t i on,nota“ pul l . ”

Eas yt oGetSt ar t ed I ti si nc r edi bl yeas yt ogets etupands t ar tt r adi ng.Youneeds ome s of t war e,s omewher et os t or eyourmoneyandal i t t l eknowl edge. Wewi l l c overwhatyouneedi nal at erc hapt er .Ther ear enos pec i al r egul at i onsorc er t i fic at i ons .Youdon’ thavet or epor tt oanyoneor as kper mi s s i on.Noonei swat c hi ngyou.I t ’ sj us tyouandt r adi ng.

Cont r ol l edSuppl yCoul dBoos tVal ueOverTi me Theamountofmos tc r ypt oc ur r enc i esdec r eas esovert i me.Thi si s donebyas pec i alpi ec eofs our c ec odet hats pec i fieshow muc hc an exi s t .Thi smakesc r ypt oc ur r enc i esmor el i ke pr ec i ousmet al sor l i mi t ed nonr enewabl er es our c es . Unl i ke t r adi t i onal f or ms of money,wher ei ti spos s i bl ej us tt omakemor e,t hati si mpos s i bl et o dowi t hc r ypt oc ur r enc i es .

BanksCan’ tTouchYou Fort hos ewhowor r yaboutbankpol i c i esl eadi ngt of ut ur eec onomi c i ns t abi l i t yt hen t r adi ngi nc r ypt oc ur r enc i esi sades i r abl eopt i on. Cr ypt oc ur r enc yt r adi ng happens ent i r el y out s i de ofany di r ec t c ont r olofnat i onalbanks .Thi sal s omeanst hatabankc an’ tf r eez e ors ei z eyourbankac c ountf orwhat everr eas on.Theyc an’ tr ever s e t r ans ac t i ons .Theyc an’ tt ouc h yourmoney.How i st hi spos s i bl e? Thi si st he c as e bec aus et he c r ypt oc ur r enc yl edgerl i ves on a

Cr ypt oc ur r enc yTr adi ngeBook

Cr ypt oMei s t er . i o/ /ByAedanKel l y

dec ent r al i z ed net wor kwi t hi dent i c alc opi esexi s t i ngi n numer ous l oc at i onsgl obal l y.

Sel f I nt er es t edQual i t yCont r ol Mi ni nghappenswhent r ans ac t i onsar ever i fiedandaddedt ot he bl oc kc hai n.Mi ni ngi sdonebyr ealpeopl ewhous es pec i als of t war e t o ens ur et hatal lt he t r ans ac t i ons i n a bl oc kc hai n ar ei ndeed ver i fied.Theygetc ompens at ed f ort hi swor k.I ti si nt hei rown s el f i nt er es tfinanc i al l yt o keep ac c ur at e,upt odat et r ans ac t i on r ec or ds .Thi spr oc es ss ec ur est hei nt egr i t yoft hewhol es ys t em and t heval ueoft hec ur r enc yi t s el f .

LowerFees Cr ypt oc ur r enc i es have numer ous s ec ur i t yf eat ur es t hatens ur e t her ear enoac t sofdupl i c at i ngt hedi gi t al f unds . Thi sel i mi nat est he need f or t r ans ac t i ons f ees t o s uppor tt hi r dpar t y payment pr oc es s or sl i keac r edi tc ar dc ompanyorPayPal whowoul dt ypi c al l y c har get oc hec kt hos et r ans ac t i ons .Mi ner st akeovert hi swor kand ar ec ompens at edwi t hnew c ur r enc yuni t sands omet i mesopt i onal t r ans ac t i onf ees .

Eas yt oUs e Us i ng c r ypt oc ur r enc i es gl obal l yi s eas y.They ar e not t i ed t o ever c hangi ng r at es or t r ans ac t i on f ees .Thes ef unds c an be exc hanged and ut i l i z ed i nt er nat i onal l y wi t houtexper i enc i ng t he us ual pr obl ems us i ng di ffer ent f or ms of c ur r enc y bet ween c ount r i es .

Cr ypt oc ur r enc yTr adi ngeBook

Cr ypt oMei s t er . i o/ /ByAedanKel l y

Under s t andi ngCr ypt ocur r enci es WhatCanYouDowi t hCr ypt ocur r enci es You c an pur c has e goods ,s er vi c esort r ade f oranot hert ype of money.Somec ol l egesnow ac c eptBi t c oi nsast ui t i onf eepayment s . I n 2013,The Uni ver s i t y ofNi c os i a,a pr i vat es c hooli n Cypr us , bec ame t he fir s t uni ver s i t yt o ac c ept Bi t c oi ns .I n 2014,New Yor kbas ed,Ki ng’ sCol l egebec amet hefir s tUSs c hoolt oac c eptt he di gi t alc ur r enc y.Gr oc er ys t or es ,c af es ,r et ai ls t or es ,t r avelagenc i es , i ns ur anc epr ovi der s ,evenl uxur yc ardeal er s hi pshaveal lr epor t ed t hatt heyal l owc r ypt oc ur r enc i esasf or msofpayment .Bi t c oi nATMs ar eal s obei ngi ns t al l edi npopul arur banc ent er s .Ot heropt i onst o s pend c r ypt oc ur r enc i eswi l lbe devel oped ast he adopt i on r at e i nc r eas esar ound t he wor l d and c r ypt oc ur r enc i esbec ome mor e mai ns t r eam.

Top10Cr ypt ocur r enci es

1

Bi t coi n

Bi t c oi ni st hefir s tdec ent r al i z edl edgerc ur r enc y,f oundedi n2009. Bi t c oi nwasi ni t i al l yc r eat edt of ac i l i t at eeas i ergl obalt r ans ac t i ons wi t hl ow t r ans ac t i onf eest hatc anbet r ans f er r edal mos ti ns t ant l y

Cr ypt oc ur r enc yTr adi ngeBook

Cr ypt oMei s t er . i o/ /ByAedanKel l y

andwer enotc ont r ol l edbyanyc ent r alfinanc i alaut hor i t y. Thec onc er nofs c al i nghasal waysbeenani s s ue.Forexampl e,a t r ans ac t i on c an t ake about10 mi nut est o pr oc es s ,and ast he net wor kofus er sgr owt hewai tt i mesgetl onger , i nc ompar i s on, Vi s a c anpr oc es s1700t r ans ac t i onspers ec ond. Today,Bi t c oi nhasbec omet hemos tpopul arc r ypt oc ur r enc ywi t h t he hi ghes tmar ketval ue.Bi t c oi ni sl eadi ng t he way f ormor e mai ns t r eam vendor st oadoptt hi sf or m ofc ur r enc yf orever yday t ypeofpur c has es . 2

Et her

Et heri st he c oi n us ed by t he Et her eum pl at f or m and i s ver y di ffer entt o Bi t c oi n and ot heral t c oi ns .I nf ac t ,i ni t i al l yi twas n’ t des i gned t o be a c ur r enc y,i twas des i gned t os uppor ts mar t c ont r ac t s .The i dea was t hatEt her eum mi ner s woul d pr ovi de c ompani es t hei r pr oc es s i ng power s ot hat t hes ec ompani es woul dn’ tneedt oi nves ti naddi t i onals er ver s .I nt hi ss c enar i o,Et her i sus edt obeaf or m ofpaymentonapl at f or m. 3

Ri ppl e

Thei ni t i al r el eas edat ef orRi ppl ewasi n2012, andi twasc r eat edf or peer t o peer debi tt r ans f er s .I ti st he t hi r d mos t popul ar c r ypt oc ur r enc yi nt er msofmar ketval ueasoft heSept ember2017. Bi t c oi n’ spr i mar ypur pos ei st obeapaymentmet hodwhi l eEt heri s meantt obeus edf ors mar tc ont r ac t s .Ri ppl eal s ohasadi ffer ent us e.I thasbec omeadec ent r al i z eds ol ut i onf orfinanc i ali ns t i t ut i ons andac t sasbot hac r ypt oc ur r enc yandadi gi t alpaymentnet wor k. Thi ss i t uat i on devel oped bec aus e a wi de r ange of financ i al i ns t i t ut i onsbegant ot akenot i c et hatt het ec hnol ogyel i mi nat es

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del ays ,c onfir mst hata s et t l ementhast aken pl ac ei nr ealt i me ( about4s ec onds ) ,andc ans us t ai n1000t r ans ac t i onspers ec onds whi l eBi t c oi ni sonl yaver agi ng3t o4. 4

Bi t coi nCas h

OnAugus t1s t ,2017Bi t c oi nf or ked,andc r eat edBi t c oi nCas h.Thi s f or k was s t ar t ed by Bi t c oi n mi ner s and devel oper s who wer e c onc er nedaboutBi t c oi nsabi l i t yt os c al e.Bi t c oi nCas hi mpl ement ed ani nc r eas edbl oc ks i z easwel lasot hermeas ur est os peedupt he ver i fic at i onpr oc es sr egar dl es soft henumberofmi ner ss uppor t i ng i t .Whi l et hes ec hangeshaver ai s edc onc er nedabouts ec ur i t y, i thas notpr event edt hi sc r ypt oc ur r enc yf r om qui c kl yr i s i ngupt hemar ket r anks . 5

Li t ecoi n

Li t ec oi nwasr el eas edonOc t ober7t h, 2011byChar l i eLee, af or mer Googl e empl oyee.I twasaf or kf r om Bi t c oi n and i n manyways t ec hni c al l ynear l yi dent i c al .Thi speert opeerc r ypt oc ur r enc yt hati s al s oopens our c eandc ompl et el ydec ent r al i z edwasc r eat edt os ol ve s ome of Bi t c oi n’ s pr obl ems . Li t ec oi n has f as t er t r ans ac t i on c onfir mat i on t i mes ,bet t er s t or age effic i enc y and al mos tz er o paymentc os t s . 6

Das h

I nJ anuar y2014,Das hwasr el eas edasXCoi nandal i t t l emor et han amont hl at ert henamewasc hangedt oDar kc oi n. I nMar c hof2015, i twasr enamedagai nt oDas h–abl endbet ween‘ Di gi t al ’ and‘ Cas h” . Das hi sabi t c oi nbas edc ur r enc yt hatf eat ur esi ns t antt r ans ac t i ons , pr i vat et r ans ac t i onsandi sdec ent r al i z ed.I t sgoali st obec omet he mos tus er f r i endl y and onc hai ns c al abl ec r ypt oc ur r enc yi nt he wor l d.

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7

NEM

Bac ki ni t s fir s ti nc ept i on ofNEM,t he goalwas t oc r eat ea c ommuni t yor i ent ed c r ypt oc ur r enc yf r om s c r at c h.Thi swasabi g under t aki ngandhadi t sc hal l enges .Event ual l y,as t abl ever s i onof NEM l aunc hed on Mar c h 31,2015.NEM’ s pl at f or m has many benefic i als er vi c es s uc h as l i ke payment s ,as s et maki ng,and mes s agi ng. 8

I OTA

I OTA i sc ons i der edt obet hefir s tbl oc kc hai nf r eec r ypt oc ur r enc y andi ns t eadus eswhati sknownast heTangl el edger .I thass ome ver yunus ual c har ac t er i s t i c ss uc hasnotbei ngabl et obemi ned, t he numberofc oi nsi s s uesi ss t r i c t l ydefined,andi ti si mpos s i bl et o i s s uenew c oi nsabovet hepr es etones .However ,t hedevel oper s haves ai dt hi snew t ec hnol ogyhass ol vedt hec ommonpr obl emsof Bl oc kc hai ns uc hasc ent r al i z at i onofc ont r ol , obs ol et ec r ypt ogr aphy, i nabi l i t yt oc onduc tmi c r opayment s , par t i t i oni nt ol er anc e, s c al abi l i t y l i mi t s ,hi ghr equi r ement sf orhar dwar easwel lasot her s . 9

NEO

Neoi sof t ent or ef er r edt oas“ Chi nes eEt her eum”andi st hefir s t dec ent r al i z ed, opens our c e c r ypt oc ur r enc y i n Chi na. I n l at e Sept ember2017,Chi naannounc edabanonI COswhi c haffec t ed Neobutt hepr i c eevent ual l yc or r ec t edi t s el f . 10

Moner o

Moner o( or i gi nal l y Bi t Moner o)was c r eat ed i n Apr i l2014 and f oc us esonpr i vac y,dec ent r al i z at i on,ands c al abi l i t y.I tr unsonr uns onWi ndows , Mac , Li nux, Andr oi d, andFr eeBSD. Moner odevel oper s bel i evei ti ss uper i ort o Bi t c oi n bec aus eofi t smi ni ngal gor i t hm,

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adapt i vebl oc kl i mi t ,s t r ongpr i vac yc ont r ol sandt hequal i t yoft hei r over al ldevel opmentandr es ear c ht eams .

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Chapt er2:

TheWal l et s&TheExc hanges Whati saCr ypt ocur r encyWal l et ? I nt hewor l dofc r ypt oc ur r enc yt r adi ng,youar eyourbank.Tos t ar t t r adi ngi nc r ypt oc ur r enc i est hefir s ti t em youwi l lneedi sawal l et . Wal l et sar es of t war e pr ogr amst hats t or e keys ,bot h publ i cand pr i vat e.Wal l et si nt er ac twi t hvar i ousbl oc kc hai nst oal l ow us er st o s endandr ec ei vec r ypt oc ur r enc yandc hec kt hei rbal anc es .Youc an t hi nkofyourwal l etl i kei t ’ syourbankac c ount .

Keepi nmi ndt hatawal l etdoes n’ ts t or eanyphys i c al c oi ns .Theonl y t wof unc t i onsofyourwal l etar et okeepyourpr i vat ekeyss af eand t oc onnec tt o yourc oi nsbl oc kc hai n.Pr i vat e keysal l ow f ort he movementoff undst o ot hert r ader sand pr ovi de t he abi l i t yt o wi t hdr aw f r om yourc r ypt oc ur r enc yac c ount .A publ i ckeyi sal s o us ed i nt r ans ac t i onsand i sneeded t or ec ei vec r ypt oc ur r enc yt o yourwal l et .

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How DoTheyWor k? Cr ypt oc ur r enc ywal l et sf unc t i on ver ydi ffer ent l yf r om t r adi t i onal wal l et s ,s o peopl et end t o getabi tc onf us ed how t heywor k.As ment i onedbef or e,t heydon’ ts t or eyourc oi ns .Theyar en’ tl oc at ed anywher ephys i c al l y.Remember ,al lt her ec or dsi nc r ypt oc ur r enc y t r adi ng i sbei ng r ec or di ng and s t or ed on t he bl oc kc hai n oft he c r ypt oc ur r enc yyouar et r adi ngi n.Her ei st heover al lpr oc es sofa t r ans ac t i on: 1.Someones endsyouat ypeofdi gi t alc ur r enc y 2.Bydoi ngs o,t heyar egi vi ngyouowner s hi poft hec oi nst oyour wal l et ’ saddr es s 3.Togetac c es st ot hos ec oi ns , yourwal l et ’ spr i vat ekeymus tmat c h t hepubl i caddr es st hos ec oi nswer egi ven 4.I ft hekeysmat c h,yougetyourc oi nsi nyourwal l et ,andt hec oi ns i nt hes ender ’ swal l etwi l ldec r eas e. Theonl ypr ooft hi shappenedi st het r ans ac t i onr ec or dt hatget s addedt ot hebl oc kc hai nandobvi ous l y,ext r ac oi nsi nyourwal l et .

Thi ngst oCons i derWhenChoos i ngaWal l et Compat i bi l i t y Not al l wal l et s s uppor t al lc ur r enc i es .I t ’ s c ommon f or c r ypt oc ur r enc i est ooffert hei rownwal l et s .Makes ur eyourwal l eti s c ompat i bl ewi t ht hec oi n( orc oi ns )youwantt ot r adei n.

Si ngl eorMul t iCoi nTr ader Ther ear ehundr edsofc oi nst oc hoos ef r om,eac hver yuni quei n f r amewor kand pur pos et han t heot her .You mayc hoos et oj us t f oc usononec oi n,Bi t c oi ni st hemos tpopul arf orexampl e,oryou

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maybei nt er es t edi nt r yi ngoutaf ew opt i ons .I ft hi si st hec as e, t her ear ewal l et savai l abl et hatal l ow f ormul t i c ur r enc yus e.

Wal l etPr i vacy Thi si sat r i c kyar ea.Yourwal l etwon’ tbel i nkedyourr eali dent i t y;i t get sanal i as .However ,asment i onedbef or e,al lt r ans ac t i onsar e s t or ed on t he bl oc kc hai n.They ar e by t he ver y nat ur e oft he bl oc kc hai nt ec hnol ogyandpur pos e–per manentandpubl i c . Tec hni c al l yyourwal l etaddr es sc oul d be t r ac ed t o yourr eal l i f e i dent i t yal t hough t hi si sunl i kel y.Don’ twor r y;t her ear epr oj ec t s under wayt oi nc r eas epr i vac yandmovet owar df ul lanonymi t y.

Acces s i bi l i t y&Us age Ther ear edi ffer entt ypesofwal l et swhi c hwewi l l bedi s c us s i ngi nan upc omi ngs ec t i on. Howyouwantt ous eyourwal l etwi l l affec twhi c h wal l etyouwi l lwantt ous e.Youmayevenwantt oc ons i dermul t i pl e wal l ett ypes ;di vi di ngyourc oi nsi nt omor et hanonei sc ons i der ed s af er .Somec ommons i t uat i ons : I fyoui nt endonmaki ngever ydaypur c has est hatar es mal land f r equent ,t henc ons i deranonl i neors of t war ewal l et .J us tputt he amountyouwi l lneedont hi swal l etandkeept her es ti namor e s ec ur eopt i onl i keahar dwar ewal l et . I fyoupl anons avi ngupandmaki ngi nf r equentl ar ger t r ans ac t i onst hanahar dwar ewal l eti sabet t erfit . I fyoupl anonpl ayi ngonac r ypt oc ur r enc yexc hange,t henus ean onl i newal l et .Bec ar ef ult houghandonl yputt heamountyouar e pl anni ngt ot r adewi t hont hi swal l et .

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Addi t i onalSec ur i t yMeas ur es : St or eonl ys mal lamount sonl i nef orever ydayus e,keept her es t i namor es ec ur ewal l et Bac kupyourwal l etwi t hwhati sc ons i der edc ol doroffli ne s t or ageopt i onswhi c hwi l lal l ow yout or ec overyourwal l eti fi ti s l os t ,s t ol enort her ei sac omput erf ai l ur e Regul ar l yupdat eyourwal l ets of t war e,yourc omput erand mobi l edevi c e;youneedt oens ur eal lyourdevi c eshavet hel at es t s ec ur i t yupgr ades

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Setl ongandc ompl expas s wor ds–don’ tf or gett omakes ur ea pas s wor di sneededt owi t hdr aw f unds Res ear c hyourwal l etopt i onsandc hoos et hos et hathaveas ol i d r eput at i onandpr ovi deext r as ec ur i t ys uc hast wof ac t or aut hent i c at i on

TypesofCr ypt ocur r encyWal l et s Col dorHot Cl as s i f yi ng wal l et sc an be c onf us i ng ast her e ar e gr oupswi t hi n gr oupsandt hei nf or mat i onc hangesast het ec hnol ogydoes .The fir s tc l as s i fic at i oni swhet herawal l eti s‘ c ol d’ or‘ hot . ' Ac ol dwal l eti s t he c ons i der ed t he s af es tbec aus ei ti s notc onnec t ed t ot he i nt er net .Typi c al l y,youwoul ds t or et hebul kofyourc oi nsi nac ol d wal l et .A hotwal l eti st heoppos i t e.I ti sei t herc onnec t ed t ot he i nt er netori sl oc at edoni t .Thes et r ans ac t i onshappenmuc hf as t er asbei ngonl i nemakesyourc oi nsac c es s i bl es oyouwoul dt ypi c al l y us eahotwal l etf orever ydayus e.

Sof t war eWal l et s Sof t war e wal l et s bas i c al l y mean t hatwal l ets of t war e needs t o be i ns t al l ed on your c omput er or mobi l e devi c e.Sof t war ewal l et sar e t hemos tc ommont ypeand ar e bot hc ons i der ed t o be Hotwal l et s .I nt hi ss c enar i o, t hes of t war ewi l ls t or eyourpr i vat ekeydi r ec t l yont ot hedevi c e. Ther ear edi ffer enc esands i mi l ar i t i esbet weendes kt opandmobi l e opt i onswhi c hwewi l lc over .

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Des kt op Des kt op wal l et sr equi r e you t o downl oad s of t war e ont o your c omput erorl apt op,andt heyar ec ons i der edt obea‘ HotWal l et . ' Theyar eonl yac c es s i bl ef r om t hedevi c et hathast hi ss of t war e.A des kt opwal l eti seas yt ous eandc ons i der eds af ert hanonl i neor mobi l e wal l et s .Thi s ent i r el y depends t hough on your onl i ne s ec ur i t yhabi t s .Shoul dyourc omput ergethac ked, r ec ei veavi r usor i s damaged enough, you c oul d pot ent i al l yl os e al l of your c r ypt oc ur r enc y.Make r egul arbac kupsofyourwal l etand s t or e t hem onadi ffer entdevi c et ohel poffs ett hes ec ur i t yi s s ues .

Mobi l e J us tl i kedes kt op wal l et s ,mobi l ewal l et sr equi r eyou t oi ns t al lan appl i c at i ononyourphone.Duet ot hel i mi t eds pac eonat ypi c al mobi l edevi c e,t hes ewal l et st endt obes mal l erands i mpl ert han t hei rdes kt opver s i ons .However ,mobi l ewal l et sal l ow yout ous ei t anywher et hatyougoandc anpr ovi deext r af eat ur est hatonl i ne wal l et sdon’ thave.Neverkeep al lyourc r ypt oc ur r enc yon your mobi l edevi c easi ti st ooeas yt ol os e,j us tl i keat r adi t i onalwal l et .

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Pr osofSof t war eWal l et s Eas yt ous e Yourkeysar es t or edi nyourdevi c e,notona3r dpar t ys er ver Mobi l ever s i onsar emor epr ac t i c alf orever ydayus e Mor es ec ur et hanonl i newal l et s Dat ai savai l abl eatt heus er ' sownc omput erormobi l edevi c e Eas i ert obac kupyour s el f Youhavec ont r oloveryourc r ypt oc ur r enc y ConsofSof t war eWal l et s Wal l eti sl os ti fdevi c ei sl os t ,s t ol eors er i ous l ydamaged Des kt opwal l etc anonl ybeac c es s edati t sphys i c all oc at i on Hac ker sc anhac kt hec omput erormobi l eandgai nac c es st o wal l et Popul arChoi c es Mobi l e

Des kt op

Bot h

Onl i ne Onl i ne( orweb)wal l et sar eal s oc ons i der ed‘ hotwal l et s . 'Theyar e t hemos tus er f r i endl yofal l wal l et sandj us tr equi r eac c es st oaweb br ows eronanydevi c et hati sc onnec t edt ot hei nt er net .Themos t i mpor t antpoi ntt or ememberi st hatwhi l et heymaybet heeas i es t t o us e,t heyar eal s oc ons i der ed t hel eas ts ec ur e.Onl i newal l et s

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s t or eyourpr i vat ekeysonas er verandar ec ont r ol l edbyat hi r d par t y.We s t r ongl yr ec ommend nots t or i ngt he maj or i t yofyour c oi ns on an onl i ne wal l et .Onl i ne exc hanges and wal l et s ar e ext r emel yat t r ac t i vet ohac ker s . Pr osofOnl i neWal l et s Eas yt ous eands etup Ac c es s i bl ef r om anyi nt er netc onnec t eddevi c e Onl i newal l et sar eus ual l yl i nkedwi t hc r ypt oc ur r enc yexc hanges onl i ne Fas t es twayt oc ompl et et r ans ac t i ons I dealf orhol di ngs mal lamount sofc r ypt oc ur r enc y

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Pr osofPaperwal l et Mor ec ont r olonyourwal l et Mor es ec ur et hanonl i neands of t war ewal l et sbec aus ebot ht he pr i vat eandpubl i ckeysar epr i nt edonapi ec eofpaper Canbes t or edandt akenc ar eofwi t houti nt er netc onnec t i on Oneoft hemos thac ker pr oofc r ypt owal l etc hoi c es Nots t or edonac omput er Pr i vat ekeysnots t or edonat hi r dpar t ys er ver ConsofPaperwal l et Cangetdamagedwi t ht i me I ft hepaperi sl os tordes t r oyed,t heus erwi l lneverbeabl et o ac c es st hei raddr es swher et hef undsar e Mul t i pl ec opi est opr eventdamagemakei tmor epr onet obei ng s t ol en Mor eeffor tr equi r edt omovec r ypt oc ur r enc i esar ound

Popul arChoi c es Mos ts of t war eandonl i newal l et shavet hi sopt i on I fnot ,t r youtBi t Addr es s . or gandBi t Coi nPaper Wal l et

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Wher et oBuyCr ypt ocur r enci es Af t eryou’ vec hos ent hewal l ett hats ui t syourneeds , t henexts t epi n t obuyyourfir s tc r ypt oc ur r enc y. Youc anpayf oryourfir s tc oi nswi t h c r edi tc ar ds ,c as h,PayPalorbankt r ans f er s .Wat c hout ;eac hhas t hei rowni s s uest hatyouneedt obeawar eof .Cr edi tc ar dsc ome wi t hhi ghf ees ,andPayPalhast r ans ac t i onsl i mi t s .Cas hwon’ tget yout hebes texc hanger at esandbankt r ans f er sar et hes l owes tof al lopt i ons . Wher eyouc anbuyt hem i sanot hers ubj ec tal t oget her .Ther ear ea f ew opt i onst hatyouc anus e,s omedependonwher eyoul i ve: Cr ypt ocur r encyexchanges :Wewi l lc overexc hangesi nt hi s s ec t i on. Bi t coi nATMs :Thes ear eATMsl oc at edi npubl i cpl ac esandal l ow yout ous er egul arc ur r enc yt obuybi t c oi ns .Youneedawal l etfir s t t ot r ans f ert hec oi ns . VoucherCar ds :Thes ear es l owl ygai ni ngpopul ar i t y,youmay evenbeabl et obuyt hem atr egul ars t or esi nyourar ea.Theyl ook l i keagi f tc ar d,ar el oadedl i keone,andyouc anr edeem t hem onl i ne. Di r ectTr adi ng:Thi si sdonedi r ec t l yonapeert opeerpl at f or m, t her ear enoexc hangedher et hatac tas‘ mi ddl emen. '

Cr ypt ocur r encyExchanges Whati saCr ypt ocur r encyExchange? Ac r ypt oc ur r enc yexc hangei sawebs i t ewher eyouc anbuy,s el lor exc hangedi gi t alc ur r enc i es .Youhavet heopt i onoft r adi ng bet weendi ffer entc r ypt oc oi nsorf ort r adi t i onalfiatmoneyl i keUS dol l ar s .Ever yonet r adest oget herr egar dl es sofyourexper i enc e

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l evel .

TypesofExchanges 1

Cr ypt ocur r encyExchanges / Tr adi ngPl at f or m:

Asment i onedear l i ert her ear eonl i nes i t est hatc onnec tbuyer sand s el l er s .Thi st ypeofexc hangei sl i keat r adi t i onals t oc kexc hange. Tr ader smake t r ans ac t i onsbas ed on t he c ur r entc r ypt oc ur r enc y mar ketpr i c e;t heexc hangeac t sast hei nt er medi ar yandc har gesa f eef orever yt r ans ac t i on.Someexc hangesal l ow you t oc onver t yourr egul arfiatmoneyi nt oc r ypt oc ur r enc y, el i mi nat i ngt heneedt o goel s ewher et obuyyouri ni t i alc oi ns . 2

Di r ectTr adi ng:

Di r ec tt r adi ngpl at f or msal l ow peopl et odi r ec t l yt r adewi t hanot her per s on.Thes epl at f or mss t i l lc har geaf eef oreac ht r ans ac t i on.The maj ordi ffer enc eher ei st hatt hes el l er ss ett hei rownexc hanger at e anddon’ tus eafixedmar ketpr i c e. 3

Cr ypt ocur r encyBr oker s :

Thes ewebs i t esal l ow anyonet obuyands el lc r ypt oc ur r enc i esata pr i c es etbyt hebr oker .Us ual l y,t hi si st hemar ketpr i c epl usas mal l pr emi um,ver ys i mi l art o3r dpar texc hangebr oker satai r por t s .

How t oPi ckBet weenExchanges Wher eyouar el ocat ed:Someexc hangeswi l l l i mi twhatyouc ando ont hei rpl at f or m dependi ngonwher eyouar ei nr el at i ont ot hem. You may have par t i alus e out oft he exc hange or f ul l .Thi s i nf or mat i oni seas i l yf oundands houl dbeus edfir s tt onar r ow your

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l i s tofopt i onsdown. Has a s ol i d and wel l known r eput at i on:Ther ei sa l ot of i nf or mat i ononl i neaboutexc hangess obec ar ef ulwher eyouget your s .Tr yt ogeti nf or mat i onf r om mul t i pl es our c est oc ompar el i ke i ndus t r ywebs i t es ,r evi ew s i t es ,newsand i ndi vi dualus er s .Make s ur et ol ookatt hemos tr ec entdat ayouc anfindast hi si ndus t r yi s r api dl yc hangi ng. Shop ar ound bas ed on exchange r at es :The exc hange r at es bet weenexc hangesc anvar yqui t eabi ts ol ookatt hi sear l yi nyour r es ear c h. Openaboutf ees :Feesc anbever ydi ffer entbet weenexc hangess o don’ tas s ume t her ei sa s t andar d.I ft he f ee i nf or mat i on about depos i t s , t r ans ac t i onsandwi t hdr awal sar en' tc l ear l yout l i ned–don’ t pi c kt hatexc hange.Makes ur eyouf ul l yunder s t andwhatyouar e r eadi ng,noneedt or us h,t akeyourt i met or es ear c hyouropt i ons . Avai l abl epaymentopt i ons :Thepopul arexc hangeswi l loffert he mos tpaymentopt i ons ,c r edi tc ar d,debi tc ar d,wi r et r ans f eror PayPal . Anexc hangemayormaynotwor kf oryoui ft her ear ef ewer opt i ons .Remember t he dr awbac ks t o eac h payment met hod ment i onedear l i eri nt hi sc hapt er . Pr i vacy:Thi si sabi gi s s uef ors omet r ader swhopr ef ert or emai n c ompl et el y anonymous . Many t r adi ng pl at f or ms r equi r e I D ver i fic at i on.However ,ver i f yi ng t he i dent i t i es of t r ader s does dec r eas et hel i kel i hoodofi l l egalac t i vi t yont heexc hanges .

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ExchangeRevi ews Coi nbas e Coi nbas ei san al li n one c r ypt oc ur r enc ywal l et exc hangebr oker hybr i ds er vi c et hatmakesi teas yt os ec ur el ybuy,us e,s t or eand t r adedi gi t al c ur r enc y. I ti sc ons i der edt obeoneoft hemos tpopul ar and wel l known exc hanges i nt he wor l d.Coi nbas et r ader sc an pur c has eBi t c oi ns ,Et her( Et her eum)andnow Li t ec oi nst hr ougha di gi t alwal l et .Formor e advanc ed us er s ,Coi nbas e has anot her pr oduc tc al l edGDAXwhi c hi sanexc hangef ormor eadvanc edus er s want i ngt ot r adei nt hes amet hr eec ur r enc i es . Pr os : Goodr eput at i on Hi ghl evelofs ec ur i t y Reas onabl ef ees Ver ybegi nnerf r i endl y Mobi l eappi savai l abl e Canpur c has ec oi nst hr oughc r edi tc ar dorbankwi r e St or edc ur r enc yi sc over edbyCoi nbas ei ns ur anc e Cons : Cus t omers uppor ts er vi c e Li mi t edpaymentmet hods Li mi t edc ount r i ess uppor t ed Kr aken Whi l eKr akeni saUSbas edexc hangeandt r adi ngpl at f or m,i tal s o oper at esi nEur ope.Onemai ndr awbac ki st hatyouc anonl yus e

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bankt r ans f er st opur c has eBi t c oi ns .Thi spl at f or m,however ,does al l owyout ot r adef r om bi t c oi nst oot herpopul arfiatc ur r enc i esand c r ypt oc ur r enc i es .Kr aken i sc ons i der ed abet t eropt i on f ort hos e whoar emor eexper i enc edandc omf or t abl ei nt r adi ng. Pr os : Goodr eput at i on Dec entexc hanger at es Low t r ans ac t i onf ees Mi ni maldepos i tf ees Gr eatus ers uppor t Sec ur e Suppor t edwor l dwi de I ngener al ,f ol l owsr egul at or ygui del i nes Cons : Li mi t edpaymentmet hods Nots ui t abl ef orbegi nner s Uni nt ui t i veus eri nt er f ac e Can’ toper at ei never ys t at ei nt heUni t edSt at es ;i fyoul i vei na s t at eorc ount r ywi t hs t r i c tr ul esCoi nbas emi ghtbeanopt i on

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Chapt er3:

How t oTr adeCr ypt oc ur r enc i es Cr ypt ocur r encyvs .For ex Thef or ei gnexc hangei sal s oknownast heFor ex.Thi si swher eal l t hewor l d’ sf or ei gnc ur r enc i esar et r adedonadec ent r al i z edgl obal mar ket .Bot ht heFor exandc r ypt oc ur r enc ymar ket sar ei nfluenc ed bys uppl yanddemand.Thec r ypt oc ur r enc ymar keti ss t r uc t ur edt o wor ki dent i c al l yl i kes t oc kmar kett r adi ngwi t hext r emepr i c es wi ngs , s t opl os s pr ot ec t i ons ,pr ofitobj ec t i ve or der s and vol at i l i t yt hat c omeswi t hc ur r enc ys pec ul at i oni nt heFor ex. Ther e ar ef ew di ffer enc es bet ween c r ypt oc ur r enc yt r adi ng and For ext r adi ng.Thebi gges tdi ffer enc et hats et st hes et womar ket s apar ti smos tc r ypt oc ur r enc i eshaveal i mi t eds uppl y.New s uppl yi s addedatapr edet er mi nedanddec r eas i ngr at e.Anot herdi ffer enc e i st hes i z eoft hemar ket s .For exi ses t i mat edat5t r i l l i onwhi l et he c r ypt oc ur r enc ymar keti syoungerands mal l erat3bi l l i on.Ac r ypt o c oi n’ sval uei sheavi l yi nfluenc edbyt hec r ypt oc ur r enc yec os ys t em whi l et heFor exi si nfluenc ed byt heec onomi c soft hei ndi vi dual c ount r i est hatar ebei ngt r aded.Andfinal l y,c r ypt oc ur r enc yc anbe t r adedal lday, ever ydaywhi l et heFor exi sonl yopenal ldayf orfive days .

How t oBuy&Sel lCr ypt ocur r enci es CNow t hatyouhaveabet t erunder s t andi ngoft hes t r uc t ur eoft he c r ypt oc ur r enc ymar ket ,i ti st i met or evi ew t hegener alpr oc es st o

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buyi ngands el l i ngc r ypt oc ur r enc i es .

Shoul dYouBuyBi t coi nsorAl t coi ns Bi t c oi nsar e a popul aropt i on f ors t ar t i ng outi nc r ypt oc ur r enc y i nves t i ngand t r adi ng.Al t hough att hi ss t agewhi l et heyar ehi gh pr i c ed,t heyar eal s ot hemos ts t abl ec r ypt oc ur r enc y.Bi t c oi nsar e avai l abl eonmos ti fnotal l t hec r ypt oexc hangesoper at i ngt oday.I n Eur ope,youc anus eBi t c oi n. deandKr aken.I nt heUSA,Coi nbas ei s apopul arc hoi c e,andi nAs i an,t her ei sOKCoi nandBi t Fl yer .Thes e ar eonl ys omeoft heopt i onsyouhaveavai l abl et oyou. Al t c oi nsar edefinedasanyc r ypt oc ur r enc yt hati snotBi t c oi n.Ther e ar ehundr edsandhundr edsofal t c oi ns . Theyar ec ons i der edr i s ki er , butt her ear eaf ewopt i onst hathaver i s eni nt hemar ket .Thes ear e mor es t abl e and ar es t i l lata l owerpr i c e peruni tt han Bi t c oi n maki ngt hem ani dealent r yc oi nf ort r ader s .I fyouwoul dl i ket o t r ade i n an al t c oi n,t her e ar e pl ent y ofexc hanges t hatoffer al t er nat i vec oi nst oBi t c oi n.Somes t r i c t l ywi l ls el las pec i fical t c oi n, s omewi l lt r adeaf ew,andaf ew oft hebi ggeroneswi l lt r adet hem al l . Ther ear el i t er al l yhundr edsofal t c oi nsi nt hemar kets oyoumay havet os ear c hf ort hebes texc hanget hatt r adesi nt hec oi nsyou want . Dur i ngt hats ear c h, c ons i derwher eyoul i veast hatwi l l pl ayar ol ei n whi c hexc hangeyouc anus e.I nt heUSA,t her ei sal i mi t ednumber ofexc hangest hatar eal l owedf orexampl e.I ti sbet t ert ot r yand s el ec tanexc hanget hati sasc l os et oyourgeogr aphi cl oc at i onas pos s i bl e.I ft hati s n’ tan opt i on,c hoos ean exc hangebas ed i na c ount r ywi t h as t r ongl egals ys t em.Thi spr ac t i c ei nc r eas esyour c hanc esofbei ngabl et or et r i eveyourmoneyi fyouf al lvi c t i mt o i l l egalt r adi ngac t i vi t i es .Thes i z eoft heexc hangeal s owi l lhavean i mpac t .Thel ar gert heexc hange,t heeas i eri twi l lbet oac qui r et he

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c oi nsyouwanti nt heamount syouwant .Smal l erexc hangeswi l l havel i mi t eds uppl i es ,andi tmayt akel ongert or eac hyourt r adi ng goal s .Many oft he al t c oi ns exc hanges ar es mal l erand ar en’ t r egul at edorpoor l yr egul at eds odoyourr es ear c hont her eput at i on apar t i c ul aral t c oi n exc hangebef or eyou dec i det o us ei t .Some exc hangeshavegonebankr uptwi t hl i t t l enot i c e, l eavi ngi nves t or si n t hec ol d.

Buyi ngNow orLat er ? Cr ypt oc ur r enc ymar ket sar evol at i l e;t hi sc an’ tber epeat edenough. Whi l ei tc anmakef ors t r es s f ult r ades ,t hi si sagoodc har ac t er i s t i c f ort r ader st r yi ngt ogeti nt ot hemar ket .Themar keti spr onet o bubbl est hatc an c omeand gor api dl y.Thewor s tt i met obuyi n woul dbeatt hepeakofabubbl eandt hebes tt i mewoul dbewhen t hepr i c ei ss t abl eand atal owerl evel .Asar ul e,you s houl dn’ t c ompar ec r ypt oc ur r enc y bubbl es t ot hatoft r adi t i onalmar ket bubbl es . Remembert her ei smor evol at i l i t ywi t hc r ypt oc ur r enc i es . A s mal lper c ent age maymean a bubbl ei nt he For ex,butt hati s c ons i der edgener aldai l yvol at i l i t yi nt hec r ypt omar ket .Abubbl eat 1, 000% i smor ec ommonwi t hc r ypt oc ur r enc i es ,butagai n,t her ei s noguar ant eei twon’ tc ont i nuet ogr ow.Fi gur i ngouti fabubbl ei sat i t speakort hec r as hi sati t sl owes ti st hec hal l enge. Wat c ht hec oi ns you havec hos en f orawhi l et ol ear nt hei rpat t er ns .J us tl i ket he For ex,t hec r ypt oc ur r enc ymar ketwi l ls how t r endsandpat t er ns .I n al at er c hapt er ,we c over f undament aland t ec hni c alanal ys i s t ec hni quest hatc anhel pyoudec i dewhent obuyands el l .

Si mpl eSt epst oTr adi ng Anyexc hangeyouc hoos es houl dhaves t epbys t epi ns t r uc t i onst o gui deyout hr ought hei ri nt er f ac e.Thebi ggerexc hangesmanyeven offeri ns t r uc t i onals c r eens hot sorvi deos .Togett heover al li dea,i n

Cr ypt oc ur r enc yTr adi ngeBook

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t hi ss ec t i onwewi l lc overt hegener als t epst obuyi ngands el l i ng Bi t c oi ns .Thes ear eal s ot hes ames t epsyou woul df ol l ow f oral l c r ypt oc ur r enc i es . St ep1:Choos eYourWal l et I fi thas n’ tbeen made c l earyet ,l et ’ sr epeatanot heri mpor t ant l es s on – never l eave a t hi r d par t yi nc har ge of your c oi ns . Spec i fic al l y,t hi smeansget t i ngyourownwal l etandmanagi ngyour keys .Cr ypt oc oi nsr equi r et wo ki ndsofkeysoraddr es s est o be s t or edandt r aded. Thes ear eyourpubl i ckeysandyourpr i vat ekeys . Apubl i ckeyi sus edf ori nc omi ngdepos i t sands al es .I ti sauni que s etofnumber soraQRc odet hatyous howpeopl ef ort hem t os end youc r ypt oc ur r enc y.Apr i vat ekeyi sus edf orout goi ngwi t hdr awal s andpayment s .Thi si st hemos ti mpor t antkeybec aus ei ts howst he ent i r e bl oc kc hai n whatyou have i n yourwal l et .I tal s o pr ovi des ac c es st oever yt hi ngi nyourwal l et .I fs omeone,getac c es st ot hi s keyt heyc anwi t hdr aw what evert heywant .Thes af es tr out ei st o s t or eyourkeysandmos tofyourc oi nsyouar en’ tus i ngonadai l y bas i si n an offli ne orc ol ds t or age wal l et .A paperwal l eti san exampl eoft hi s .You c an t r ans f erwhatyou wantt ot r adet o an onl i newal l etwhenyouneedi t . St ep2:BuyYourFi r s tCoi n Tos t ar tt r adi ng, fir s t , youneedc oi ns . St ar t i ngoffwi t hBi t c oi nsi st he eas i es t opt i on t hen you c an t r ade your Bi t c oi ns f or ot her c r ypt oc ur r enc i esont heexc hange.Youc anal s opur c has epopul ar c r ypt oc ur r enc i esdi r ec t l yons omeoft hemaj orexc hangeswi t hfiat money as t hey al s o ac t as br oker s . Coi nbas e i s a ver y s t r ai ght f or war dandpopul arexc hangeandbr okert obuyc oi nswi t h fiatmoney.

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St ep3:Pi c ki ngYourExc hange Theexc hangeorbr okeryouus et obuyyourfir s tc oi nswi t ht hefiat c ur r enc yofyourc hoi c edoes n’ thavet obet heoneyout r adeon.I n apr evi ouss ec t i on,wec over eds ever alexc hangeopt i onst hatyou c ans t ar tyourc r ypt oc ur r enc yt r adi ngj our neywi t h.Youwi l lneedt o s etupanac c ount ,andt hi smayr equi r eI D ver i fic at i on.Thi ss t ep hel psens ur ef r audorot heri l l egalac t i vi t i esar ekeptt oami ni mum andt hatt her ei sagr eat erc hanc eofl egalr eper c us s i ons .Whi l eI D ver i fic at i onmi ghtmakes omeofyouunc omf or t abl ebec aus eyou wantt or et ai nyourpr i vac y,t hi smeas ur ei si nus et ohel ppr ot ec t you.I fyous t i l lar en’ tc omf or t abl ewi t ht hi spr oc es s ,yous t i l lhave t heopt i onofus i ngapl at f or mt hatal l owsf ordi r ec tt r adi ngwi t h ot herus er s .Eac hs i des et st hei rpr i c e,andt hepr i c ei s n’ tbas edon t heunder l yi ngmar ket .However ,i fyoudec i det ous eanexc hange, t he ver i fic at i on pr oc es sc an t ake a c oupl e ofdays .Onc et hi si s c ompl et e,youwi l ls ends omeofyourBi t c oi nst ot heexc hanges o t hatyou c an us et hem t o pur c has e youral t c oi ns .Thes e wi l lbe s t or edi nanexc hangewal l etandar er eadyt obeus edi nt r adi ng. Theexc hangewi l l keept r ac kofyourbal anc es , andt heyal s opr ovi de c har t sandot heranal ys i st ool syouc anus et omakes mar t ert r ades . Pl eas er emembert onotkeept hebul kofyourc oi nsi nt hes ehot wal l et s .Exc hangewal l et sar ec ons i der edt heeas i es tf orhac ker st o br eaki nt o. St ep4:Ent er i ngYourBi d Ent er i ngyourbi di st hes ameasbuyi ngc oi ns .I ti sas i mpl epr oc es s . Youwi l l findt heexc hangesor derbookandwhatt hec ur r entas ki ng pr i c ei sf oryourc hos enc oi n.I fyous etyourbi d( buyor der )f ora hi gherpr i c et hant hes el l er ’ spr i c e( l owes tas k) ,youror derwi l lbe fil l edqui c kl y.I ft hi si s n’ tt hec as e,youwi l lneedt owai tl ongerf or youror der .Onc es omeoneac c ept syourbi d,t heor deri sfil l ed,and

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yourc hos enc oi nwi l lbet r ans f er r edt oyourexc hangewal l et . St ep5:Sel lYourCoi n Sel l i ngyourc oi ni sal s or ef er r edt oas‘ s et t i nganas k. 'Ther ear e t hr ees c enar i oswher eyouwi l l t ypi c al l ywantt os el l yourc oi n. I fyour c oi nhasgoneupi npr i c et owher eyouwant edt os el li t , i t ’ sf al l eni n pr i c e, andyouwantoutbef or ei tgoesl ower , oryouwantt oc as hout andc onver tyourc oi nsi nt ofiatc ur r enc y.Todoanyoft hes et hr ee, youneedt os etanas k.Her e,yous etapr i c ewhi c hyouwoul dl i ke yourt r adet ohappenat .Youc ans el lonec oi natat i me,oryouc an dowhatmos tdo, s el labat c h.Whenabuyerac c ept syouras kpr i c e, t het r adewi l l bec ompl et ed, andagai nyourc oi nswi l l endupi nyour exc hangewal l et .Theac t ualpr oc es sofbuyi ngand s el l i ngi st hat s i mpl e.

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Chapt er4:

Mi ni ngCr ypt oc ur r enc y Whati sMi ni ng? Mi ni ngi st hepr oc es sofaut hent i c at i ngc r ypt oc ur r enc yt r ans ac t i ons i ni t sl edger .Yourc omput erendsup bei ngan al lday,ever yday c omput erac c ount antver i f yi ngt r ans ac t i ons .Ever yc r ypt oc ur r enc y hasi t sownl edgert hathasar ec or dofever yt r ans ac t i onf r om t he ver yfir s tt ot hemos tr ec ent .Ever yt i meanewt r ans ac t i onhappens , i twi l lneedt obeaddedt ot hec r ypt oc ur r enc yl edgerorbl oc kc hai n. Tr ans ac t i onsar et henaddedupunt i lt her ei senought or eac hwhat i sknownasbl oc ks t at us .Thent hi sbl oc ki ss entofft omi ner s . Thi spr oc es shappensonmanymi ni ngc omput er s ,al lc onnec t edt o as i ngl e peer t o peer net wor k.Mi ner s us es pec i alhar dwar e, s of t war eanddat akeysc al l ed‘ nonc es ’ t oenc r yptt hebl oc kofdat a i nt oa‘ has h. 'Ahas hi sani dent i fic at i ons equenc et hati nc l udesal l t he bl oc k dat a.Thi ss equenc ei s added t ot he bl oc k whi c h aut hent i c at esi t .Thent hebl oc ki soffic i al l yaddedt ot hebl oc kc hai n. I ti snow par toft heper manenthi s t or yoft hi sc r ypt oc ur r enc y.To enc our age peopl et o wi l l i ngl y ver i f yt he net wor k,mi ner s get r ei mbur s ed f or t hei r effor t s wi t h c r ypt oc ur r enc y when t hey c ompl et eabl oc k.Paymentc omesi nt hef or m ofc r ypt oc oi nsand how muc hdependsont hec oi nyouar emi ni ng.

Thi ngst oCons i derBef or eMi ni ng I ni t i al&Ongoi ngFi nanci alI nves t ment :

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To be abl et o mi ne you wi l lneed t o have a c omput ers ys t em power f ul enought ohandl et het as k. Whoeverver i fiest hebl oc kfir s t get spayment , s ot hebet t eryours ys t em i satout per f or mi ngs l ower mi ner s ,t he mor e you wi l lmake.You wi l lal s o need t o pay t o upgr adeyourequi pmentr egul ar l y.Compet i t i oni sfier c ef ors ome c oi ns ,and peopl ear ec ons t ant l yupdat i ngt hei requi pment .Thi s i nc l udesyours of t war e, wal l et , andhar dwar e.St ayont opofmi ni ng newsandneverf eel l i keyouc an’ tc hangeyourmi ndaboutt hec oi ns youar emi ni ng.

Ti meCommi t ment : Mi ni ngi snotac as ualt as k.I fyouar en’ tt ec hni c al l yi nc l i nedyouwi l l needt ol ear nabouthar dwar e,t hes pec i fics of t war eyourc hos en c oi nwi l lneed,enc r ypt i on,andbewi l l i ngt omoni t ort hec ondi t i ons oft hemar ketf ort hec oi nyouar emi ni ng.

Bi t coi nvs .Al t coi ns : Bi t c oi nshavebec omever ydi ffic ul tt omi nef ori ndi vi dualmi ner s . Ent i r e mi ni ng pool shave been c r eat ed f ort he s ol e pur pos e of mi ni ngBi t c oi ns ,and t hedi ffic ul t yl evelofBi t c oi n hass ur pas s ed whatan i ndi vi dualmi nerc an ac hi eve.The har dwar ec os tal one c oul dpr ovet obet oomuc h.Youdohavet heopt i onofmi ni ngan al t c oi nt hough s uc h as Li t ec oi n.The di ffic ul t yl evel ,har dwar e r equi r ement s , andpowerc ons umpt i onus agear egener al l yl es sand t hepayout shi ghenought hati ti swor t ht heeffor t .Choos ewi s el y; t her emaybes i gni fic ant l yf ewert r ans ac t i onsf orl es spopul arc oi ns . Doyourr es ear c ht os eewhatc oi ni swor t ht heeffor t .

Mi ni ngPool s I fyous t i l lhopet omi neBi t c oi nsorar en’ tqui t er eadyt omi neal one

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t henj oi ni ngami ni ngpooli st her ec ommendedpat ht ot ake.When mi ni ngs ol o,payment sar eonl yawar dedwhenyouar et hefir s tt o val i dat eabl oc korwhat everot hermi l es t onet hatc oi nhas .I fyou ar en’ tt hefir s t ,youreffor t sgounr ewar ded.I fyouar ec ompet i ng al oneagai ns ts t r ongermi ni ngc omput er s ,youmayneverr ec ei vea payment .Thi si swher emi ni ngpool sc omei n.Us er sbandt oget her t o mi ne asa gr oup,and al lpayment sar e di vi ded amongs tt he gr oup.I ti ss pl i tbas ed on how muc hc omput erpoweryou have beenc ont r i but i ng.Asyouc ans ee,t hi si nc r eas esyourc hanc esof payout s . Gener al l y,eac hal t c oi nhasdi ffer entmi ni ngpool s .Somepool swi l l ac t ual l ys wi t c hbet weenc ur r enc i esbas edont hatc oi n’ spos i t i oni n t hemar ket .Tofindapool ,youc anfindt hec ommuni t ys i t ef ort he c oi nyouar ei nt er es t edi npl ac esl i keReddi t .Whendec i di ngwhi c h poolt oj oi nt her ear es omei mpor t antques t i onsyouneedt ohave ans wer ed. Howl onghavet heybeeni nexi s t enc e?Whatf eesdot hey c har ge? Do t hey di vi de c oi ns by c omput er power or anot her meas ur e?On,aver agehow of t endot heyfindbl oc ks ?Whatar et he r evi ewss ayi ngaboutt hem?Whatwaysc anyouwi t hdr aw?

WhatYouNeedt oGetSt ar t ed Whatyouneedt ogets t ar t edmi ghtvar ybet weenc oi nsbutl et ’ s as s umeyouwoul dl i ket os t ar tmi ni nganal t c oi ns uc hasLi t ec oi ns . Her ei sagener all i s tofwhatyouwi l lneedt oac qui r et omaket hat happenaf t erwec overaf ew oft hes er equi r ement si nal i t t l emor e det ai l . Awal l et :Thi si sapas s wor dpr ot ec t edc ont ai nert hats t or es yourc ur r enc y. 1

2

Mi ni ngs of t war e:Thi si sf r ee,andf orLi t ec oi nyouwi l lneed

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CGmi nerandSt r at um. Mi ni ngpoolaccept ance:As s umi ngyouwoul dl i ket oj oi na pool ,whi c hi sr ec ommendedf orbegi nner s ;wor ki ngt oget her i nc r eas esyourc hanc esofear ni ngc oi ns . 3

Regi s t erwi t hacr ypt ocur r encyexchange:Thi si swher eyou wi l lt r adeyourmi nedc oi nsi nt oanot herc r ypt oc ur r enc yorfiat money;notal lexc hangesac c eptal lc r ypt oc ur r enc yt ypesand/ or exc hangef orfiatmoney. 4

Thebes ti nt er netyoucanaffor d:Youwi l lneedar el i abl ef ul l t i meandf as tc onnec t i ons peed.I fyoul i vei nanar eawher et hi si s di ffic ul t ,mi ni ngmi ghtnotbepos s i bl ef oryou. 5

Acools pace:Yourmac hi newi l lgi veoffheat ,andt hi sc oul dbe al oti ns omec as es .Youwi l lneedas poti nac oolbas ementor ot herc ons t ant l yai r c ondi t i oneds pac et ohel pkeepyours ys t em f r om over heat i ng. 6

Yourmi ni ngcomput er :Yes ,youc anus eyourr egul ar c omput ert os t ar tmi ni ng,butyouwon’ tbeabl et odoanyt hi ng el s eoni twhi l eyouar emi ni ng.I ns t ead,us eadedi c at eades kt op orc us t ombui l tc omput ert omi ni ng.For gett r yi ngt ous eal apt op, t abl et ,c el l phoneorgamec ons ol et omi ne.Theyar en’ tpower f ul enought obeeffec t i ve. 7

AGPUorASI CChi p:AGPUi sagr aphi c spr oc es s i nguni t ,and anASI Cc hi pi sas pec i alpr oc es s i ngdevi c eus eds pec i fic al l yf or mi ni ng.Thi si swher eyourpoc ket booki sgoi ngt ot akeahi t .The c os twi l lbeanywher ef r om $90us edt o$3000new f oreac hGPUor ASI Cc hi p.TheGPUorASI Cwi l lt akec ar eoft hepr oc es s esneeded i nmi ni ngval i dat i on.Wi t ht hegr owi ngpopul ar i t yofmi ni ng,t her e 8

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beens uppl ys hor t agesofbot hs oyoumi ghtnotbeabl et ofind ei t hert opur c has e. Af an:Li kewement i onedbef or emi ni nggener at esal otof phys i c alheat .Youwi l lneedas t r ongf ant oc ons t ant l ybl ow ai r ac r os syourc omput er .I fyouc anmanaget ogetac as ewi t h mul t i pl eheavydut yf ansbui l ti nt hatwoul dbeabonus . 9

Ti me:Thi si s n’ ts omet hi ngt hatyous etupt or unonyour c omput er ,andyous t epaway.Thebes tmi ner ss pendhour sever y weekc ons t ant l yl ear ni ngaboutongoi ngt ec hnol ogyi mpr ovement s andhow t heyc ani mpr ovet hei rmi ni ngper f or manc e. 10

TheHar dwar e Let ’ sdi veal i t t l edeeperont het opi cofmi ni nghar dwar e.Youwi l l needt odec i dewhet heryouar egoi ngt ous eaCPUmi neroraGPU mi ner .Somemi ni ngs of t war ei ss pec i fic al l ydes i gnedt ous eyour c omput er pr oc es s or ( CPU) , and ot her s ar e meant t o your c omput er sgr aphi c spr oc es s or( GPU) . I ti st r uet hatGPU mi ner sar emor eeffic i entt hanCPU mi ner sbut onl yi f you have a di s c r et e gr aphi c sc ar d.Many pl ac es wi l l r ec ommendt hatyouus eAMD c ar dsf oral t c oi nmi ni ng.Beawar e t hat s uppl i es mi ght be l i mi t ed,and t hes e pr i c es mi ght have i nc r eas eddr amat i c al l ybec aus eoft hi sdet ai l .I fyouar epl anni ngt o mi neonal es spower f ulc omput erwi t hi nt egr at edgr aphi c s ,t hen us eaCPU mi ner .You ar egoi ngt o need t o wat c ht heheatand powerus agef r om ei t hers et up.Ther ear edi agnos t i ct ool savai l abl e s pec i fic al l yt omoni t orc ommonmi ni ngi s s uesl i ket hos e. ASI C boar dsar emeantt o mi neBi t c oi n pr i mar i l ybec aus emany al t c oi nsus eadi ffer entmi ni ngal gor i t hm c al l ed ‘ s c r ypt ’t hati s n’ t

Cr ypt oc ur r enc yTr adi ngeBook

Cr ypt oMei s t er . i o/ /ByAedanKel l y

Cr ypt oc ur r enc yTr adi ngeBook

Cr ypt oMei s t er . i o/ /ByAedanKel l y

Chapt er5:

Tr adi ngSt r at egi es To s t ar tt r adi ng,ever yper s on needst ot hi nk aboutwhatt hei r t r adi ngs t yl ei s .Fr om t her eyouc annar r ow downs omec ommon s t r at egi est hats ui t eyours t yl eandt henwi t hexper i enc e,bui l don t hem.Ther ear es omegener alf ac t or st oc ons i derwhen you ar e t r yi ngt onar r ow downwhats t yl efit syoubes ts uc has :how muc h money you have t o wor k wi t h,t he amountoft i me you have avai l abl et odevot et ot r adi ng,t hel eveloft r adi ngexper i enc eyou have,andyourl evelofr i s kt ol er anc e. Somes t r at egi esr equi r emor et i met hanot her s .Pas s i vet r ader sc an s pendaf ew hour saweekont hei ri nves t ment sorevens t epaway c ompl et el ybyhandi ngt hewor kovert oac r ypt oc ur r enc ybr oker . Sc al pt r adi ngwhi c hi sa s hor t t er m s t r at egyr equi r esa f ul l t i me c ommi t mentandever ymi nut eofat r adi ngs es s i oni ss pentac t i vel y managi ngt r ades .Youal s odon’ thavet os t i c kt oones pec i fict ype. You maydec i det hatyou ar ec omf or t abl eus i ngmor et han one s t yl e.I nt hi ss ec t i on,we wi l lgo overbot h ac t i ve and pas s i ve s t r at egi es .

TheAct i veTr ader The ac t i ve t r aderi sf oc us ed on s hor t t er m financ i algai n.They t ypi c al l ydon’ thol di ndi vi dual c ur r enc i esf orl ong, s ot heydon’ tneed t oc ons i derl ongt er mt r ends .However ,i ti sc r i t i c alt hes et ypesof t r ader ss pend a c ons i der abl e amount of t i me us i ng c har t s , r es ear c hi ng and s t ayi ng on t op oft he news i nt he mar kett o under s t andwhatwi l lhappeni nt hes hor tt er m.

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ThePas s i veTr ader Apas s i vet r aderi smor ei nt er es t edi ni nves t i ngf ort hel ongt er m andr el i esont heageol dt hi nki ngt hatmar ket sevent ual l yal waysgo up.Ac t i ve t r adi ng r equi r esc ons t antc ommi t ment ,buta pas s i ve t r aderdoes n’ twantt os pendt hei rf r eet i mes t udyi ngt hemar ket s , t r endsand ot herf ac t or st hatc an i nfluenc et he c r ypt oc ur r enc y mar ket .I ns t ead,t heyc r eat eapl an,dot hei ri ni t i alr es ear c h,i nves t , t hens i tbac kandwai t–onl ymoni t or i ngoc c as i onal l y.Asl ongas t hei rc oi nsdon’ tdec r eas ei n val ue t o ac er t ai nl evelt heyhave pr edet er mi ned,t heywi l ll eavet hei ri nves t ment sal one.Thi si sa s t r at egyf ort hos ewi t hpat i enc e,ar enotaggr es s i veandnotl ooki ng f orqui c kr et ur ns . Whywoul daper s onwantt ous et hi sl ongt er ms t r at egyi naqui c kl y c hangi ngmar ketl i kec r ypt oc ur r enc i es ?Themai nadvant agei st hat overt hel ongt er mi ft heymanaget hei rpor t f ol i owel landkeepa l evelhead,t her ear egr eat eroppor t uni t i esf orpr ofit .Thekeyi st o s etabal anc e.Yous houl dn’ tc ompl et el yi gnor eyourpor t f ol i o;you need t o per i odi c al l yr eeval uat et he per f or manc e and c ons i der l ongt er m mar kett r ends .Butal s o,don’ tgeti nt he habi tof c ons t ant l yc hec ki ng yourpr ogr es s .Thi smar ketdi vesand s oar s dr as t i c al l yi ns omet i mess hor tper i odsoft i me.You maybec ome uneas ywi t ht he c ons t antc hangesand s el latt he wr ong poi nt ; abandoni ngyourl ongt er m pl anf ors hor t t er m gai nst hatar ef ar l es s .

Act i veTr adi ngSt r at egi es Att hi spoi nt ,you maybe f or mi ngan i deaofwhet heryou l ean t owar dbei nganac t i vet r aderorapas s i veone.Keepi nmi nd;you don’ tneedt obeoneort heot her . Youmayc hoos et oi nves ti ns ome c oi nsf ort hel ongt er m and haveas mal l erpor t i on t o us ei n an

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ac t i vet r adi ngs t r at egy.Forac t i vet r adi ng,t her ear et ypi c al l yf our c ommon t ypesofs t r at egi es .Swi ng t r adi ng i ss hor t t er m wi t ha hol di ngper i od ofaf ew dayst o af ew weeks .Dayt r adi ngi san aggr es s i vef or m ofs hor t t er mt r adi ngandonl ys houl dl as tt heday. Not hi ng s houl d be ac t i ve over ni ght .Sc al pt r adi ng i sby f art he s hor t es tt er mt r adi ngs t yl e;youc oul dpos s i bl yhol dac oi nf oronl ya f ews ec ondst oaf ewmi nut es .Let ’ sgoovers omet r adi ngs t r at egi es f orbot hac t i veandpas s i vet r ader s ,t henyouc andec i de.

DayTr adi ng Thi si st hemos twel l known f or m ofac t i vet r adi ngand i nvol ves buyi ngands el l i ngc r ypt oc oi nsont hes ameday,neverover ni ght . Dec i s i onsar eus ual l ybas edont ec hni c alanal ys i s ,notf undament al anal ys i swhi c hi swhatpas s i vet r ader swoul dl ookatfir s t .Thes e t ypesoft r ader shavet hepot ent i alt omakeorl os ec oi nsqui c kl y. Theyat t emptt opr ofitf r om t hedai l ypr i c ec hangesofas pec i ficc oi n t heyar et r adi ngi nbymaki ngmul t i pl et r adest hr oughoutt heday, us ual l yi nbat c hes .Not e,t hi si sas t r at egyf ort hos ewhohaves ome exper i enc ei nt hemar ket .Youwi l lneedt odevot eal mos tf ul l t i me hour st ot hi st as kduet ot het i meneededt or es ear c ht hef ac t or s t hati nfluenc et he mar ket ,per f or m t he pr operanal ys i si ns hor t per i odsoft i meandi mmedi at el ybeawar eofanyi nt er r upt i onsl i ke powerout ages .

Swi ngTr adi ng As wi ngt r adert akesadvant ageofpr i c es wi ngst hatar es hor t t er m butl as taf ew dayst oaf ew weeks .Unl i kedayt r adi ng,youwoul d hol dyourc oi nsover ni ghtdur i ngt hi st i me.Whenas wi ngt r aderc an s eeat r endf or mi ngorbr eaki ng, t heywi l l s etupt hei rt r adesandget i nt opos i t i on j us tbef or ei ti spr edi c t ed t ohappen.Swi ngt r ader s c r eat eas etofr ul esbas edonbot hf or msofanal ys i s-t ec hni c aland

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f undament al .Thes er ul esar edes i gned t o hel pt het r aderbet t er pi npoi ntwhent obuyands el l .Swi ngt r ader sc anwor keffec t i vel yi n bot h upwar d and downwar dt r endi ng mar ket s ,buta s i deways mar keti sr i s kyf ort hem.Thi ss t yl edoes n’ tal waysr equi r ec ons t ant at t ent i onl i keadayt r aderwoul dneedt o.Sot hos ei ndi vi dual swho ar ec omf or t abl eper f or mi nganal ys i s ,ar egoodats pot t i ngt r ends andhavet hepar t t i mehour st odevot et ot r adi ngdowel lwi t ht hi s s t yl e.

Scal pi ng Sc al pi ngi st hef as t es tpac eds t r at egyofal lac t i vet r adi ng.I ti nvol ves maki nghundr edsoft r adesperdayt ot akeadvant ageofs mal l pr i c e di ffer enc esus ual l ybet weent hebi dandas kpr i c es .Thi swor ksby buyi ngatt hebi dpr i c eands el l i ngatt heas ki ngpr i c et or ec ei vet he di ffer enc ebet weent het wopr i c epoi nt s .Sc al per si deal l ydon’ twant t os t ayi nt hes epos i t i onsl ongasi tgr eat l yi nc r eas est hei rr i s ki ft hey do.They al s o don’ tt r yt hi ss t r at egy wi t hl ar ge vol umes or di ffer enc esi n pr i c e.Theyf oc uss pec i fic al l yon s mal lmoveswi t h s mal lvol umesbutmor ef r equent l y.Us i ngt hi ss t r at egymeanst hat t hei rpr ofitpert r adei ss mal l s ot heyf oc usonmor ei ndemandc oi ns t hatwi l lt r ademor eof t ent hanl es s erknownc r ypt oc ur r enc i es .Thi s s t r at egyi sc ons i der edver yr i s kybec aus eyouar er el yi ngonwi nni ng al otoft r adest hatgi veyouenoughpr ofit .Pr ec i s i onandc ons t ant at t ent i onar er equi r edf ort hi st r adi ngs t r at egyasonl yoneort wo wr ongmovesc anwi peoutal lyourpr ofitf ort heday.

Pos i t i onTr adi ng Pos i t i ont r adi ngi ss omet i mesc ons i der edt obeapas s i vebuyand hol ds t r at egyand notpar tofac t i vet r adi ng.However ,t her ei sa di ffer enc ebet weent het wo.Thet ypi c albuyandhol ds t r at egyonl y i nvol veshol dt r adesf orver yl ongper i odsoft i meand t her ef or e

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pr ofit i ngf r om t hebel i eft hemar ketal waysr i s es .Pos i t i ont r ader s c anus ebot hl ongands hor t t er ms t r at egi es .Pos i t i ont r ader sus e l onger t er mc har t swi t hot heranal yt i cmet hodst oi dent i f yt r endsi n t hemar ket .Dependi ngont het r end,t hi st ypeoft r adec oul dl as t days ,weeks and s omet i mes l ongerwhi c hi s why i tof t en get s c onf us edasapas s i vet r adi ngs t r at egy.Thes et r endt r ader sl ookf or t r ends i gnal sl i kehi gherhi ghsandl owerl ows . Onc eat r endi sf ound t hey wi l lpos i t i on t hems el ves t oj ump on onc et he t r end has es t abl i s hedi t s el fandwhent het r endendst heywi l lexi t .Thi sway t hey benefit f r om bot ht he up and downs i de of t he t r end movement . However , whent hemar keti sver yvol at i l e, asi nt hec as e wi t hmanyoft heal t c oi ns ,t hi ss t yl eoft r adi ngi sdi ffic ul tt opul loff, andpr ofit sar el ower .

AnAct i veSt r at egyt oAvoi d:ThePumpandDump A‘ PumpandDump’ i sas c am s t r at egyt hati si l l egali nanymar ket . However ,ac r ypt oc ur r enc ymar keti ses pec i al l yvul ner abl et ot hem bec aus ei ti shar dt oenf or c et hel aw onadec ent r al i z ednet wor k.A pumpanddumps c am r equi r et wogr oupsofpeopl e. Thes c ammer s buyal ar geamountofac heaperc oi noveraper i odt hanasagr oup, i nc r eas est hepr i c ebypr omot i ngi t .Asexc i t ementar oundt hec oi n bui l ds , t hes oont obevi c t i ms , buyt hi sc oi nbel i evi ngt hatanupwar d t r endi sdevel opi ng.Tr adi ngvol umei nc r eas esandt heval ueoft hat c oi ngoesup.Onc et hec oi nr eac hest hepoi ntt hes c ammer sdes i r e, t heys el l al l t hei rc oi ns . Ever yoneel s ewhos eest hi sof t enpani c sand begi ns t os el l ,s endi ng t he c oi nc r as hi ng downwar ds .Of t en ever yoneel s ebutt hes c ammer sl os e.

How t oDet ectaPot ent i alPumpandDump Ther ear eaf ew s i gnst hatac oi ni sgoi ngt obeus edi napumpand dumps c heme.Youmaynot i c et hepr i c ei sf al l i ngandt her ewi l lbe

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l i t t l er i s eseac ht i meas c ammerbuys .Theydot hi st ol oadupont he c heapc oi nwi t houtanyonenot i c i ng.Onc et heyhaver eac hedt hei r des i r ed amountofc oi ns ,t he pr omot i ng bei ngs .They wi l lus e s ever al di ffer entac c ount st odot hi s , andt her emaybeal ar gegr oup ofi ndi vi dual si nvol ved.Theywi l lhead overt of or umsand ot her publ i cpl ac eswi t hi nt hec r ypt oc ur r enc yc ommuni t yandheavi l yt al k up t hei rc oi n.They c ont i nue t o do t hi s unt i lt her ei s enough moment um and peopl es t ar t buyi ng.Thi sf eeds t he l i es t he s c ammer sar et el l i ngever yoneanddr i vest hepr i c eup.Onc ei ti s hi ghenought heywi l l s el l s mal l amount sofc oi nsasf as tast heyc an wi t houti mpac t i ng pr i c e.You wi l ls ee a gr eat ernumberofbuy t r ans ac t i onst han s el l ,butt hes el lt r ans ac t i onswi l lbes mal land c ons i s t ent .Thes e ar ei ndi c at i ons a pump and dump s c am i s happeni ng.

Pas s i veTr adi ngSt r at egi es TheBuyandHol d Abuyandhol ds t r at egyi st heepi t omeofapas s i vet r adi ngs t r at egy andi nvol veshol di ngc r ypt oc ur r enc i esf orl ongper i odsoft i me.Thi s i sof t enwhyt hi si sc ons i der edt obei nves t i ngr at hert hant r adi ng. As t he c r ypt oc ur r enc y mar ketmat ur est hi sc oul d event ual l y mean hol di ngf ordec adesj us tl i kei nt r adi t i onali nves t i ng.Thi swayt he buyand hol di nves t orc an r i deoutt hemanyr oundsofmar ket vol at i l i t ywhi c hc anbever ys ever ewi t hc r ypt oc ur r enc i es .Youwi l l r el yheavi l yon f undament alanal ys i sand on oc c as i on,t ec hni c al anal ys i st oc onfir m yourc hoi c es .Ther ear eaf ew s t epsi nvol vedi n t hi ss t r at egy. Fi r s t , youneedt odet er mi neyouri nves t mentobj ec t i ves , t i mef r ame andr i s kt ol er anc e.As kyour s el f ,ar eyous avi ngf orabi gpur c has e? Wi l lyou need t hemoneys oonerr at hert han l at er ?Per hapsyou

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woul dl i keyourc r ypt oc oi nst obepar tofyourr et i r ementpor t f ol i o al ongwi t hyourot hermai ns t r eam i nves t ment s . Wher eyouar eati n yourl i f epl aysapar ti nt hi saswel l . Theyoungeryouar e, t hegr eat er r i s kyouc ant ol er at e,andyouc anf oc usongr owt h.I fyouar eol der , youwi l lhavel es st ol er anc ef orr i s kandmaywantt of oc usonbei ng abl et odr aw c oi nst os uppl ementyouri nc ome. Sec ond, youneedt oc hoos eyourc r ypt oc ur r enc ymi x.Youwi l lwant t o event ual l y nothave al lyourmoney t i ed up i n one t ype of c r ypt oc ur r enc y.Di ver s i f yi ng al l ows you t o pr ot ec tyourover al l por t f ol i o.Youmaywantt ohaveal ar gerpor t i onofyourmoneyi n c oi nst hathave pr oven t hems el vess uc h asBi t c oi ns ,Et her ,and Li t ec oi n.Then have a s mal l erpor t i on i n youngerc oi nst hatar e doi ngwel li nt hemar ket .Fi nal l y,youmaybei nt er es t edi ni nves t i ng a ver ys mal lamounti n an I CO ornewl yr el eas ed c oi n wi t h no mar kethi s t or y. Thefinalpoi nti st hatyous houl di nves tr egul ar l yandr emembert o r evi ew yourpor t f ol i oatl eas tannual l yt or ebal anc ei fneeded.As you gai n exper i enc e and under s t and t he mar ketmor e,you c an c hoos et oi nves taddi t i onalmoneyi nt oc r ypt oc ur r enc i est obui l d yourpor t f ol i o.Youwi l lbeabl et ohavebi ggergai nsandt her ef or e meetyouri nves t mentgoal swi t hi nyourt i mel i ne.Onc eayear ,you wi l lr evi ew yourobj ec t i ons ,t heper f or manc eofyourpor t f ol i oand adj us tasneededdependi ngonyourl i f ec i r c ums t anc es .Youmi ght evenc ons i derdoi ngt hi sonas emi annual bas i swhenyoufir s ts t ar t t oens ur et hatyouhavemadet her i ghts el ec t i onswi t hyourc r ypt o c oi ns .

Emer gencyTact i cs Anyt r ader ,r egar dl es soft hei rs ki l ll evel ,i sc apabl eofl os i ngal lof

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t hei rpr ofit st heyhaveear nedt hei rent i r et r adi ngc ar eeri nj us tone ort wobadt r ades .I fyouar ec ons i der i ngus i ngs omeoft heac t i ve t r adi ng s t r at egi es we have r evi ewed i n t hi s eBook t hen under s t andi ngyouropt i onst omi ni mi z er i s ki sc r i t i c al .

St opLos s&TakePr ofit Us i ngs t opl os sandt akepr ofitpoi nt sar et wowayst opl anaheadi n yourc r ypt oc ur r enc yt r adi ng. Thes ear et het wobes twayst or emove emot i onf r om ac t i vet r adi ngwhi c hi st hemai nr eas onpeopl el os e out .They al l ow f ear or over c onfidenc et or ul et hei rt r adi ng dec i s i ons .Fearwi l lmake you hol d on t oc oi nsl ongert han you s houl d, l os i ngmor et hanyouneededt o.Gr eedandover c onfidenc e wi l lmakeyou hol d on t oc oi nst r yi ngt o getmor epr ofit ,whi c h us ual l ymeansyouwi l lonl ys el lwhent hepr i c ebegi nst of al l . As t opl os spoi nti st hepr i c eyouar ewi l l i ngt os el l atandt akeal os s ont het r ade.Thi sc oul dhappenf ormanyr eas ons ,i nt heend,t he c oi ndi dn’ tper f or m asyouhoped,andas t opl os swi l lpr eventyou f r om hol di ngont oabadc oi n. At akepr ofitpoi nti st hepr i c eyouar e wi l l i ngt os el l ac oi nandt akeapr ofit . Thi sl i mi t syouf r om hol di ngon t ool ongasment i onedbef or e. Set t i ngSt opLos sPoi nt s Tos etyours t opl os sandt akepr ofitpoi nt s ,youwi l lneedt ous e bot ht ec hni c alandf undament alanal ys i s .Movi ngaver ageswhi c h ar ec over edi nal at erc hapt erar et hemos tpopul arwayt os ett hes e poi nt ss i nc et heyar eeas yt oc al c ul at eand wi del yus ed.You wi l l appl yt hem t oyourc oi nsc har ti nac har t i ngpl at f or m ofyourc hoi c e andus et hekeymovi ngaver agesof5,9,20,50,100and200day aver ages . Thenyouwi l l beabl et os eei fyourc oi nhasr eac t edt oany oft hes epoi nt sasei t heras uppor torr es i s t anc el evel .

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TheFi nalSt ep:Cal c ul at i ngExpec t edRet ur n I n or dert o us es t opl os sand t akepr ofitpoi nt s ,you wi l lhavet o c al c ul at et heexpec t edr et ur n.Thef or mul aus edi s :[ ( pr ofit abi l i t yof gai n)x( t akepr ofit% gai n) ]+[ ( pr ofit abi l i t yofl os s )x( s t opl os s% l os s ) ] . Thi sf or mul ac al c ul at est heexpec t edr et ur nf ort hatpar t i c ul ar c oi n.Thi sf or mul ai sver yi mpor t antt ous easi twi l lhel pyout hi nk yourt r adest hr ough,al l ow yout oc ompar ec oi nsands el ec tt hat onest hatmaket hemos tpr ofit .

Shor tSel l i ng Shor ts el l i ngal l owsyout obor r ow ac r ypt oc ur r enc yf r om aper s on oror gani z at i onands el li tatt hec ur r entmar ketpr i c es .Your ec ei ve moneyt ot henbuyt hec r ypt oc ur r enc ybac katal at erdat e.Bi t c oi ns ar et hemos tc ommonc oi nus edf ort hi st ypeofac t i vi t y.Thet r i c k her ei st hatyouneedt obuyt hes amec ur r enc ybac kwheni ti sl ower t hanyoupur c has ed. Thi swi l l al l owyout or epaywhatyoubor r owed ands t i l lhaveapr ofit .Let ’ sr unt hr oughas i mpl i fiedexampl e.You bor r ow onebi t c oi nands el li twhent heuni tpr i c ei s$3, 000ont he mar ket .Younow have$3, 000i nyourwal l et .Youwai tunt i lt heuni t pr i c edi pst o$2, 000,buyt hec oi nbac kt hatyouowed,r et ur nt he Bi t c oi nbac kt ot hebor r owerandyoukeept hepr ofitof$1, 000.

Under s t andt heRi s ks Thi s met hod oft r adi ng s ounds appeal i ng and an eas y way t o r ec overl os s esyou have al r eadyi nc ur r ed ormake l ar ge pr ofit s qui c kl y.Whi c hi tc an,however ,i ti sc ons i der edahi ghr i s kt r adi ng s t yl e.I fyou ar enew t ot r adi ng,you maywantt o wai tunt i lyou bec ome mor ef ami l i ar wi t ht he c r ypt oc ur r enc y mar ketbef or e at t empt i ngt hi st r adi ngmet hod.Wi t hnor malt r adi ng,youonl yc an l os ewhatyouputi n, buti ns hor ts el l i ng, yourl os s esc angobeyond

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whatyoui ni t i al l yhaveputi nt ot hemar ket .I fyoudon’ tr eadort i me t hemar ketr i ght ,yourc oi nmi ghtgoupr at hert hangodownwhen i ti st i mef oryout obuy.Let ’ sus et hepr evi ousexampl et oi l l us t r at e t hi spr obl em.Asbef or eyouboughtonebi t c oi nands ol di twheni t was$3, 000.Your ec ei vedt he$3, 000i nyourwal l et .Youwai tf ort he pr i c et ogodownbuti ns t ead,i tgoesupt o$4, 000.I ft hebor r ower c al l st hel oannow andyoumus ti nves tanot her$1, 000i nor dert o buyt hec oi nt or et ur nt ot hebor r ower . I ns hor ts el l i ng,t hebor r owerc anc al lt hel oanatanyt i me,andt hey ar er equi r edonl yt ogi veyous hor tnot i c e.Thi smeanst heymaydo t hi sbef or et hepr i c edr ops !Makes ur eyour eadanyr egul at i onsor gui del i nesf orc over i nganyc oi nsyous hor ts el l .Onl yi nves ti fyou ar ever yc onfidentt hepr i c eswi l ldr opandi fyouhavet hemoneyt o c overanyl os s es .

St i l lI nt er es t edi nShor tSel l i ng? I fyouar ec onfidenti nyours ki l l s , t henyouc ant r ys hor ts el l i ngwi t h Bi t c oi ns .Ther e ar et r adi ng agenc i esand pl at f or mst hatwi l ls el l Bi t c oi ns f r om t hei r own s uppl y.CFD ( Cont r ac tf or Di ffer enc e) t r adi ng pl at f or mswi l lal l ow s hor ts el l i ng,Bi t c oi n exc hangesl i ke Kr aken offert hi s opt i on as wel l .Pi c k a bor r owerwi t h a good r eput at i onandmanageyourc oi nswel l .

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Chapt er6:

I CO’ s( I ni t i alCoi nOffer i ng) Whatar eI CO’ s An I ni t i alc oi n offer i ng( I CO)i sat ypeofc r owdf undi ngorc r owd i nves t i ngt oolus i ngc r ypt oc ur r enc yandmos tar edonec ompl et el y ont opoft heEt her eum bl oc kc hai n.Byus i ngas mar tc ont r ac t , Et her orBi t c oi ni sc ol l ec t edandi sexc hangedf ort henew t ypeoft oken. The pr oc es st akespl ac e ent i r el yP2P wi t houtanyexc hangesor br oker s .I ti sc ommonl yus ed asas our c eofc api t alf ors t ar t up c ompani esandt of undt hedevel opmentofnew c r ypt oc ur r enc i es . Compani esc anpr es el luni t soft henewc r ypt oc ur r enc yort okensi n exc hangef oral r eadyes t abl i s hedc r ypt oc ur r enc i esl i keBi t c oi nand Et her .

Thec ampai gnpr oc es sus ual l ys t ar t soffwi t ht hepr es ent at i onofa whi t epaper .Thi swhi t epaperpr ovi desal lt hekeyi nf or mat i ons uc h ast hebus i nes smodeldet ai l s ,t het ec hni c als pec i fic at i onsoft he pr oj ec t ,t hepr oj ec tt i mel i ne,t het ar getbudgetwher et heydet ai l how t he f ut ur ef unds wi l l be us ed and final l y di s t r i but i on. Di s t r i but i oni sakeyar eat oi nc l udei nyourr es ear c hasi tt el l syou

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aboutt heavai l abl et oken s uppl yand how manyc oi nst het eam i nt endst okeepf ort hems el ves .

TheShor tHi s t or yofI COs I ni t i al c oi noffer i ngsar es t i l l anewc onc ept , however , onAugus t7t h, 2017 CNBC r epor t ed t hati ni t i alc oi n offer i ngshave r ai s ed $1. 2 bi l l i on and now s ur pas sear l ys t age vent ur ec api t alf undi ng f or i nt er netc ompani es .Thi si sani mpr es s i veac hi evementc ons i der i ng t hefir s tpos s i bl eI CO wasf orRi ppl ei near l y2013,andi nl at e2013, Mas t er c oi nr an t hei rown I CO c ampai gn.The Et her eum pr oj ec t br okeal lc r owdf undi ngr ec or dst o dat ei n 2014wi t hi n a4week per i od. TheEt her eum bl oc kc hai nhasc omet opl ayaver yi mpor t ant par ti nt hegai ni ngpopul ar i t yofI COsasi t ’ spl at f or m hass i mpl i fied t he pr oc es s ofi s s ui ng t okens .Thi st ec hnol ogy c an be di r ec t l y r el at edt ot her ec or di ngbr eakI COst hathaveoc c ur r edi n2016and 2017–t hemos tnot abl ewaswhenapr oj ec tc al l edTheDAO whi c h wasabl et or ai s e$150mi l l i on.

CI O VSCr owdf undi ngVSI PO I COshave c ommon t r ai t swi t h bot hc r owdf undi ng and I POst o whi c ht heyar eof t enc ompar ed. Whi l et heydos har et r ai t s , t heyend upbei ngmor eahybr i d. I COsand I POs( I ni t i alPubl i cOffer i ng)bot h offert hei ri nves t or s pot ent i alf ut ur epr ofitbutal s opot ent i alr i s kandf ai l ur e.AnI PO wi l l s el l as t akei nt heac t ual c ompanys ot hati nves t or shaveapor t i onof owner s hi p.Mos tI COst odat ehaven’ ts ol dwhatar ec al l edt okens t hatac tasas t akei nt hepl at f or ms .Theonl yexc ept i ont ot hatr ul e wasi n 2016 when t he DAO c ampai gn offer ed t okenst hatwer e at t ac hedt ovot i ngr i ght s .

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Al s o,anI CO i ss uppor t edbyt hos ewhowantt oi nves tear l yi na pr oduc tors er vi c et hathas n’ tbeenl aunc hedyet .Thi smakest hem di ffer entf r om I POsandmor el i kec r owdf undi ngc ampai gns .Then agai n,c r owdf undi ngus ual l yi sbas edondonat i onswhi l ei nves t or s i n an I CO hope t o gai n ar et ur n on t hei ri nves t ment .I COsar e t her ef or eami xbet weenadonat i onandi nves t ment .

Law &Regul at i ons I COsar es t i l ll ar gel yunr egul at ed,andt hi si sadanger ouss i t uat i on f or i nves t or s who l ac k educ at i on.Ci r c ums t anc es ar ec hangi ng r api dl y bec aus e oft he ext r eme s uc c es s ofI COs l i ke The DAO br i ngi ngI COsandt hec r ypt oc ur r enc ymar keti nt ot hel i ght .Ther e ar egeogr aphi car easwher et heyar er egul at eds i mi l ar l yt ot hatof s har eands ec ur i t i ess al esal t houghenf or c ementi ss t i l lac hal l enge. St andar ds , r egul at i ons , andl awsmayhel pt opr ot ec tbot hi nves t or s and ent r epr eneur s .However ,i twi l lmos tl i kel yc omewi t hs ome negat i vess uc h ast hec os tand effor tt o meetc ompl i anc ec oul d r educ et headvant agesofanI CO overr egul arf undi ngopt i ons .

I CO Types Duet ot hel ac kofr egul at i onsment i oned above,devel oper sand s t ar t upc ompani esc anr unI COsi nanywayt heyc hoos e.Thi shas l eadt oavar i et yofdi ffer entappr oac hesonhow c ampai gnsar er un andmakesi tver ydi ffic ul tt oc overeac hs i t uat i on.Somec ommon t ypesofpr i c i nghavebegunt or i s eabovet her es t .Wewi l lr evi ew t hes eopt i ons . Pr i ce wi l li ncr eas e:TheI CO i ss etup t or un i ns t ages ,and t he exc hanger at ef ort okensi si nc r eas edwi t ht i me. Ear l yi nves t or swho t ookt hebi gges tr i s kgett hebes tpr i c eperc oi nr at i o.

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Pr i cewi l ldecr eas e:TheGnos i st eam i nt r oduc edt heDut c hauc t i on met hodwher et hes al es t ar t satt hehi ghes tpr i c epert okenandi s l ower edunt i lt her ear eenoughbi dst os el lal lt okens .Al lt het okens ar et hens ol datt hatpr i c e. Pr i cei sfixed:I nt hi ss c enar i o,al lt okensar es ol datt hes amefixed pr i c e.I nves t or s find t hi s an appeal i ng met hod bec aus el ar ge i nves t ment swi l lnotgener al l yi nfluenc et hepr i c e.Af t ert heoffer i ng ends ,i ti snotunus ualf ort her et obeaper i odwher et hei nves t or s ar enotal l owedt ot r ans f ert hei rc oi ns .Af t ert hi sc ool i ngoffper i od, exc hangesc an l i s tt he t oken and have ot herpeopl et r ade i tat mar ketpr i c e. Pr i ce i snotdet er mi ned:Thi shappenswhen t he devel opment t eam ors t ar t upc ompanydec i denott os el l atafixedpr i c e. I ns t ead, t heyc ol l ec twhat everamounti nves t or sc hoos e and att he end di s t r i but enew t okensi npr opor t i ont ot heamountgi venbyeac h i nves t or .

Res ear chi ngI COs TheWhi t epaper I ns t eadofat r adi t i onalbus i nes spl anorf or malpr os pec t us ,I COs us et ec hni c alwhi t epaper s .Awel lwr i t t enI CO whi t epaperwi l lt el l you a good dealoft he i nf or mat i on you need t o know bef or e i nves t i ng.They s houl dc over how t he pl at f or m wi l lwor k,t he pot ent i alus es ,t heI CO pr i c i ngs t r uc t ur e,t hedevel opmentpl ans us i ngt heI CO pr oc eeds ,et c .

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TheWebs i t e Whet heri ti sal andi ngpageoraf ul lwebs i t e,ever yI CO wi l lhave s omes or tofoffic i alonl i nepr es enc e.Don’ tbef ool edbyaflas hy l ayoutands moot hmar ket i ngl anguage–t heymeanver yl i t t l et o yourr es ear c h.I fac oi norI CO webs i t e/ l andi ngpageeas i l ypr ovi des youwi t hagooddealofi nf or mat i ont oans weryourques t i onsi na s t r ai ght f or war dmanner–t hati sagoods i gn.Theys houl dpr ovi de ac c es st ot hei rwhi t epaperand c oul d have ot herus ef ull i nkst o s uppor t i ngi nf or mat i on.Buti fyou l eavef eel i ngc onf us ed and/ or nothavi ngl ear nedver ymuc h,bewar e.

Soci alMedi a,Di s cus s i onBoar ds&News Thec r ypt oc ur r enc ymar ketandI COsar ebec omi ngaver ypopul ar ever yday t opi c .You s houl d be abl et o eas i l y find i nf or mat i on, peopl e’ sopi ni ons ,exper tr evi ews ,et c .on a var i et y ofdi ffer ent onl i nec hannel s .Reddi tand ot herc r ypt oc ur r enc yf or umsar ean exc el l entwayt odi s c us samongs tent hus i as t s , es pec i al l yi fyouar ea new t r ader .You wi l lfind pl ent yofi ndi vi dual swho c an ans wer ques t i onst hatyoumayhaveors har ei nf or mat i ont hatyoumay havemi s s ed.Tr yt os eei ft heI CO hasanys oc i almedi ac hannel s r unni ngori ft heys how upi nanyt hems el ves .Themor eac t i vet hey ar eon s oc i almedi a,pr omot i ngand keepi ngt hepubl i cawar eof t hei rdevel opment s ,t he bet t eri ti sf ori nves t orc onfidenc e and r es ear c hpot ent i al .

I CO Rat i ngWebs i t es I CO r at i ngwebs i t esar eaver ygoodr es our c et obeabl et oc ompar e di ffer entI COs ,r ead I CO news ,bec ome awar e ofany al er t sor c aut i onsandfinal l y,t ofindI COst opar t i c i pat ei n.Her ear eaf ew opt i onst ogetyous t ar t edl i s t ed:

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I st hei nf opr ovi dedf ul loffluff?Whenyoudoyourr es ear c h, c anyougett ot hef ac t sori si tf ul lofhype?Themor emar ket i ng j ar gondes i gnedt os el lyout ypi c al l ymeansyous houl dpr obabl y s t ayaway.I fyouc anonl yfindawebs i t eorl andi ngpage,you s houl davoi dt hi soppor t uni t y. How doest hewhi t epaperr ead?I si twel lwr i t t enand s t r uc t ur ed?Doesi thandl ewel lagai ns texper t s ’ opi ni ons ?Doesi t expl ai nt het ec hnol ogyi ndept h?Thes t r ongert hewhi t epaper ,t he mor ec onfidenc epot ent i ali nves t or swi l lhave,andbet t ert hec oi n wi l lper f or mi nt hemar ket . Whoi sbacki ngt hepr oj ect ?I ft hepr oj ec twasand/ ori ss t i l l bac kedbypr omi nenti nves t or s ,t hent hec oi nwi l lappeart obe mor ec r edi bl e. Whati st heCons ens usMechani s m oft hecoi n?Thi si show c hangest ot hedec ent r al i z eds ys t emsar edec i dedupon.Common exampl esar ePr oof of Wor korPr oof of St ake.I ti sver ygoodt o know how t hec oi nwor ks . I st hecoi ncent r al i z edordecent r al i z ed?Thi si sabas i cbut i mpor t antt oknow how t henet wor ki ss t r uc t ur ed. Cr ypt oc ur r enc i esar emeantt obedec ent r al i z edi nnat ur e. However ,c ent r al i z edc oi nsdohavet hei rownadvant ages . I st her eadevel opmentpl an?Youc angauget hedevel opment t eam’ sc ommi t mentbywhet herornott her ei sac l eart i mel i nef or t hedevel opmentofac oi n. How muchmoneyhast heI CO r ai s edandhow muchwas s pent ?Anyfinanc i ali nf oons pendi nghabi t swi l ls how youagr eat dealaboutt het eam behi ndt hec oi n.

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How di ffer enti si tf r om t henear es tcompet i t or ?I ft hec oi ns ar eal lt hes ame,t her ei sl i t t l ei nc ent i vet ot r ys omet hi ngnew. How s t r ongi st het ar getmar ket ?Coi nst hatappealt os mal l ni c hegr oupswon’ tbes t r ongi nt hemar ket .Thegr oupneedst obe l ar geenought os uppor tgr owt hbuts t i l lwel ldefined. Anyl egalbar r i er s ?Thi st ec hnol ogyi snew andal waysc hangi ng. Thel egalandgover nmentbodi esar es t i l lt r yi ngt oc at c hup.So, youneedt omakes ur et her ear enoi s s ueswi t ht hec oi nsyou c hoos e. Foundi ngTeam Member s ?Thes uc c es sofac oi ndepends l ar gel yont hec or ef oundi ngt eam.Thi si si mpor t antr egar dl es si f youar el ooki ngatanI CO oramor ees t abl i s hedc oi n. Ar et heyact i vel ycommuni cat i ng?Themor eopenat eam behi ndac oi ni s ,t hemor et heyappeart obec ommi t t edandt he l ar gert hei rdes i r et os uc c eedappear s .Dot heyopenl yt al kabout t hei rdevel opmentpr ogr es sands t i c kt ot hatt i mel i neori s ever yonepr et t ymuc hi nt hedar k? How manycoi nswi l lt her eeverbe?Manyc oi nshaveafini t e s uppl y,andt hi smakesac oi nhaveas t r ongerval ue.Al lc oi nswi t h defineds uppl i eshavet hati nf or mat i onpos t eds omepl ac e.Us ual l y, youc anfindouthow bi gt het ot als uppl yi sandhow muc hhas beenr el eas eds of ar . How manyoft hos ecoi nshavebeengi vent ot hef oundi ng t eam?Thehi ghert heper c entofc oi nsgi vent ot het eam,t he wor s ei tl ooks .Al s o,i fmos toft hec oi nsar eownedbyaf ew peopl e,t hent hi si sabadi ndi c at i onaswel l .Thes ei ndi vi dual sc an eas i l ymani pul at emar ketpr i c e.

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Whati st hemar ketcapi t al i z at i onoft hecoi n?Thi si seas i l y f oundonl i neonmanyexc hanges i t esandi st hemeas ur eoft he c oi n’ sval ue.

I CO Launch&Par t i ci pat i on Let ’ sl ookatt heent i r eI CO pr oc es s .I nt hi ss ec t i on,wewi l lc over whatneedst obedonebyt heI CO t eam andyou;f r om whent he I CO i sannounc edal lt hewayt owhenyouc as hout .

I CO Team:TheAnnounc ement Announc ement s us ual l y t ake pl ac e wi t hi n c r ypt oc ur r enc y i nves t mentc ommuni t i ess uc hasBi t c oi nTal k,Reddi t ,ands i mi l ar s i t es .Thepr oj ec tt eam us ual l ygi veapr es ent at i ont ypi c al l yont he pur pos e of t he I CO pr oj ec t al ong wi t h a whi t epaper ,ot her doc ument at i on,t i mel i nes ,goal s and any ot her i nf or mat i on a pot ent i al i nves t ormi ghtneedt oeval uat et heoppor t uni t y.Thent he t eam makes t hems el ves avai l abl et or ec ei ve any ques t i ons or c omment st hatt hec ommuni t ymi ghthave.

I CO Team:TheOffer Af t ert heannounc ement ,adj us t ment sbas edont hec ommuni t y’ s f eedbac kar emadet ofinal i z et hebus i nes smodelandwhi t epaper wi t hf ur t herdet ai l s .Thi si saver yi mpor t ants t epasI COshappen bef or eapr oj ec ti sc ompl et ed;maki ngi tc r uc i alt hatt het eam i s t r ans par entandt hor oughwi t ht hei rdoc ument at i on,s oi nves t or s t r us tt he I CO.An offerpr opos ali sc r eat ed and i nc l udesal lt he det ai l sandt er msofapr oj ec ts uc hasdes i r edi nves t mentamount , pr oj ec tdeadl i nes , et c . Thefinanc i al i ns t r umenti sal waysi nt hef or m oft okens .Att hi spoi nt ,t hes t ar tdat eofI CO s al ei sannounc edand mar ket i ngki c ksi nt ot ar gets mal l eri nves t or s .

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Yout heTr ader :Regi s t erwi t haCr ypt oc ur r enc yExc hange Yourfir s tt as kt opar t i c i pat ei nanI COi st obuyc r ypt oc ur r enc i est hat youwi l lus et opur c has et heI CO t okens .Agai n,t hi si sus ual l yEt her orBi t c oi n.I COsdon’ tac c eptfiatc ur r enc y.Ther ec ommendedway t o pur c has e enough Bi t c oi ns or Et her i st hr ough an onl i ne exc hange.Youwi l lwantt odot hi swel lbef or et hes t ar tdat eofan I CO s al east her egi s t r at i onpr oc es sc ant akeaf ew days .Onc et hat i sdone,s i mpl yt r ans f ermoneyf r om yourbankac c ountt o your c r ypt oc ur r enc yexc hangeac c ount .Fort hos ewhoei t herdon’ thave bankac c ount s ,c r edi tc ar dsorwoul dr at hernotus et hei rI Di nt hi s pr oc es s ,youc ans t i l lbuyBi t c oi n/ Et herf r om ac r ypt oATM,oryou c ant r yapeer2peerexc hangeandt r adel oc al l y.

Yout heTr ader :Exc hangeTr adi t i onalMoneyf orBi t c oi nor Et her As s umi ng you dec i de t o us e an exc hange and nots ome ot her met hod ofobt ai ni ngyourc r ypt oc ur r enc y,t hepr oc es si ss i mpl e. Us i ngyourr egi s t er edac c ount ,youexc hangeyourfiatc ur r enc yl i ke USDorEURf ort hec r ypt oc ur r enc yyouwantt obuywhi c ht akeaf ew s ec onds .Exc hangest ypi c al l y pr ovi de you wi t h an onl i ne wal l et when you r egi s t ers ot hati swher eyournew c r ypt oc ur r enc ywi l l s how up.However ,don’ tkeep al ar geamountofmoneyi nt hi s wal l etas onl i ne exc hanges ar et ar get sf orhac ker s and t hes e hac ker shave been s uc c es s f uli nt he pas t .I ns t ead,you wi l lbe t r ans f er r i ng yournew c r ypt oc ur r enc y money t o a mor es ec ur e wal l et .

Yout heTr ader :SetUpYourWal l et&Tr ans f erYourCoi ns Sec ur i t yi st he mai nr eas on you s houl dn’ tkeep mos tofyour c r ypt oc ur r enc i esi nanexc hangewal l etwhenyouar enor mal l y

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t r adi ng. Par t i c i pat i ngi nanI COi sanot herone. Unl es st heexc hange youus edc l ear l ys t at edt hati t swal l etc anpar t i c i pat ei nt heI CO, you wi l lneedt ous eanot herwal l etoryouwon’ tbeabl et oac c es syour new I CO t okens .I ti sver ydi ffic ul t ,i fnoti mpos s i bl e,t o getyour t okensf r om anunappr ovedexc hangewal l ets i nc emanyexc hanges ar eover l oadedwi t hr eques t sorwon’ tal l ow i tundert hei rgener al ‘ t er msofus e. ' Mos tI COshappenont heEt her eum net wor k,ands oyouwi l ll i kel y need t o ac qui r e an Et her eum wal l et .Somet i mes an I CO wi l l r ec ommend at ypeofwal l etbec aus enotever ywal l eti sagood c hoi c et ous ewhenpar t i c i pat i ngi nanI CO.Oneexampl eofanI CO s ui t abl ewal l eti sMyEt her Wal l et .Thi si sawebs i t et hatal l owsyout o c r eat e,s end and r ec ei ve Et herbutyou keep c ont r oloveryour pr i vat ekeys . Youc angener at eawal l etandt henpr ot ec ti twi t hyour ownpas s wor ds .Yougetadownl oadabl efil ewi t hapubl i c pr i vat e keypai r .Tos endEt her ,al lyouneedt odoi supl oadt hefil eand pr ovi det hepas s wor d.

I CO Team:TheLaunc h The offic i als t ar tdat e oft he I CO s al e orl aunc h dat ei s when c r ypt oc ur r enc yt okensar emadeavai l abl e.Thepr ef er r edc ur r enc y t opur c has eI COt okensi sus ual l yEt herorBi t c oi n. TheI COc ompany wi l lpr ovi deamet hodt obuyt het okensont hel aunc hdat ewhi c h wasout l i nedi nt heoffer .I COsus ual l yl as tatl eas taf ew weeksbut c anbeopenendedwi t hnoenddat e.Thepr oj ec twi l lt r yt or ai s eas muc hmoneyaspos s i bl ebutagoodpr ac t i c et ol ookf ori swhenan I CO pl ac esa c ap on t he t ot alamountr ai s ed.Onc et hey have r eac hedt hei rt ar get ,t hepr oj ec tc anc ont i nue.

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I CO Team:TheCl os e An I CO us ual l yc l os esonc et he i nves t mentc ap i sr eac hed.I CO t okensc anbel i s t edonc r ypt oc ur r enc yexc hangesonc et heI CO i s c ompl et eandt hepr oj ec ti sl aunc hed.Not e,t hatt her emaybea mandat or yc ool i ng off per i od r i ghtaf t ert okensar er el eas ed t o i nves t or s .Dur i ngt hi sc ool i ngoff per i od,you wi l lnotbeabl et o t r ade.Onc et hi sper i odi sdone, youar ef r eet ot r adet hem f orot her c r ypt oc ur r enc i esorbac ki nt oafiatc ur r enc y.

Yout heTr ader :Cas hOut&Sec ur eYourTokens Onc eyouhaver ec ei vedyourt okensi nt hewal l etyous etupf ort he I CO, youwi l l needt ot r ans f ert hem t oamor es ec ur ewal l et .Youwi l l needabi tofext r aEt heri nyourwal l ett opayf ort heus ualwal l ett o wal l ett r ans ac t i onc os t s .

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Chapt er7:

Anal ys i s&I ndi c at or s Fundament alAnal ys i s I nt het r adi t i onali nves t ment swor l d,f undament alanal ys i si nvol ves eval uat i ngt hefinanc i alheal t handvi abi l i t yofac ompanyus i ngi t s financ i al s t at ement si nor dert ofigur eouti t st r ueval ue. Thi sdoes n’ t wor kf orc r ypt oc ur r enc i ess i nc et her ear enofinanc i als t at ement s . Ati t sc or e,i tf oc us esons ol vi ngt heques t i onof“ WHY”t hepr i c ei s movi ngi nt hemar kett hewayi ti sandhel psusant i c i pat ef ut ur e pr i c es .I n or dert o do t hatwe l ook att he bas i cdr i ver sofany ec onomi cs i t uat i on–s uppl yanddemand.

Demand Sever alf ac t or saffec tt hedemandofac r ypt oc ur r enc ys uc hasus er adopt i on,t r adi ng,andt r ans ac t i onac t i vi t yl evel s .Us eradopt i oni s per haps t he s t r onges tf ac t or i n det er mi ni ng a c r ypt oc ur r enc y f ut ur e.Bi t c oi n, t heor i gi nal c r ypt oc ur r enc y, i st hehi ghes tus edofal l c oi ns .I ti sbec omi ngmor emai ns t r eam ever yday.Ot herr i val ss uc h asEt herf r om Et her eum al s ohaveas t r ongadopt i onr at e. Tr us ti sanot herdemanddr i ver .Thi smi ghtbet het r us ti nt hec oi n’ s s ec ur i t y,t hes t r engt hofi t sbl oc kc hai n,abi l i t yt ohol di t sval ue,t he c ommi t mentoft hedevel opmentt eam,et c .I ft hemar ketf eel sany oft hes e ar et hr eat ened i n any way,t he val ue wi l lgo down. Gover nmenti nvol vementhasal s ogoneal ongwayt oi nc r eas et he t r us tl eveloft hes e di gi t alc oi ns .Ther e has n’ tbeen as muc h r es i s t anc eass pec ul at or sor i gi nalt houghtt her ewoul dbe,par t i al l y

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s i nc et hes el ar gei ns t i t ut i onss eeval uei nbl oc kc hai nt ec hnol ogy. Spec ul at or smakeupas t r ongdr i vi ngf or c ei ndet er mi ni ngval ueon anas s et .Si nc et her ear eal waysnew updat es ,devel opment s ,I COs and r egul at i on c hanges ,s pec ul at i on i sc ons t ant l yhappeni ngand s hi f t i ng. Thi si s one r eas on f or t he hi gh vol at i l i t y of t he c r ypt oc ur r enc ymar ket s ,of t ens oar i ngonedayands wi ngi ngdown t oc r as hi naf ew s hor tdays .

Suppl y Det er mi ni ngdemandf orac r ypt oc ur r enc yi sc ompl i c at edbyi t sver y nat ur e.However ,i t ’ st hatnat ur et hatmakest hes t udyofs uppl y s i mpl er .Ac r ypt oc ur r enc yus ual l yhasl i mi t soni t st ot als uppl yand evenont her at eofwhennew c oi nsar er el eas ed.Thes el i mi t sar e bui l ti nt ot hec odei t s el fand c an’ tbec hanged.Thet ot als uppl y amountc an bef ound t hr ough r es ear c h onl i neeas i l y,aswel las i nf or mat i ononwhens uppl i eswi l lr unout .However ,t her ear et he c as esof‘ dead’ c oi ns .Thes ear ec oi nst hathaven’ tmovedi nal ong t i mef orwhat everr eas onper hapsbec aus eawal l etwasdamaged orkeyswer el os t .

Ot herI ndi cat or st hatDet er mi net heOpt i malPr i ceofa Coi n The opt i malpr i c e ofa c oi ni sdet er mi ned bys ever ali mpor t ant f ac t or sot hert han s uppl y and demand s uc h ast he bl oc kc hai n di ffic ul t yl evel ,medi ai nfluenc e,i nnovat i on,et c .Let ’ sgoi nt odet ai l ons omeoft hes ekeyf ac t or s . Ener gyUs age Youmi ghtbes ur pr i s edt ol ear nt hatt her equi r edel ec t r i c i t yneeded

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pl aysal ar ger ol ei nmi ni ng.Thi si sbec aus et heener gyr equi r edt o s ec ur e bl oc kc hai ns c an be ver y hi gh.Pr oof of Wor k( POW) bl oc kc hai nswhi c har et hemos tc ommonandal s or equi r et hemos t ener gy.Toputt hi si nt oper s pec t i ve,t heamountofener gyr equi r ed t omanaget heBi t c oi nbl oc kc hai ni sequalt ot heamountas mal l c ount r ywoul dus ei nayear .Thi sput sas t r ai nont her es our c esof mi ner s ,ani nt egr alpar toft hec r ypt oc ur r enc ymar ket . Di ffic ul t yLevel Mi ni ngdi ffic ul t yr ef er st ot hemeas ur eofhow di ffic ul ti ti st ofinda has hbel ow agi vent ar get .Bl oc ksmus thaveahas hbel ow apr es et t ar get t o be c ons i der ed val i d. The per c ei ved val ue of a c r ypt oc ur r enc ywi l l i nc r eas et hemor es ec ur eabl oc kc hai ni sandt he hi ghert he mi ni ng di ffic ul t y.I tal s oi nc r eas est he ener gy us age neededandmakesi tmor edi ffic ul tt ogetc oi nst hr oughmi ni ng. Ut i l i t y Theus eofac r ypt oc ur r enc yal s opl aysar ol ei ni t sval ue.I fi tdoes n’ t haveas t r ongus e,l i keac t i ngasaf or m ofc ur r enc y( Bi t c oi n)ort o exec ut es mar tc ont r ac t s( Et heron Et her eum) ,t hen t her ewi l lbe l owerper c ei vedval ue. Publ i candMedi aPer c ept i on Cr ypt oc ur r enc yhashad i t ss har e ofbot h pos i t i ve and negat i ve publ i cper c ept i ons .Themedi ahaspl ayedi t sr ol ei nr epor t i ngt hes e pos i t i ve and negat i ve devel opment swhi c h ar et o be expec t ed. Peopl ec anr eac tpos i t i vel yt ot hei nnovat i onst hatc omef r om t hi s new t ec hnol ogy.Theyc anr eac ts t r ongl yt ot heof t envol at i l enat ur e oft he c r ypt oc ur r enc y mar ket .I tal s o has had s ome negat i ve as s oc i at i onswi t hi l l egalac t i vi t i es .Ther ehavebeenhac kst omaj or

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exc hangest hathave affec t ed t he c oi nsaswel l .Thes et ypesof s i t uat i onsc anhaveahugei mpac tont hepr i c eofac oi nort heent i r e mar ket . Bi t c oi n’ sHeal t h Bi t c oi ni st he ol des tand s t r onges tofal lc r ypt oc ur r enc i es .I ti s per c ei vedt obeal mos tl i kea‘ r es er vec ur r enc y. 'Whent hepr i c eof Bi t c oi n fluc t uat es ,i t of t en i nfluenc es t he pr i c e of al l ot her c ur r enc i es . I nves t or s I nves t or shavemor eofan effec ton c oi n pr i c est han you mi ght t hi nk.Forexampl e,whenani nves t orors mal lgr oupofi nves t or s buyal ar geper c ent ageofac oi n’ ss uppl y, t heyc ans par kanupwar d movementoft hec oi nsmar ketpr i c e.Theabi l i t yt oaffec tac oi n’ s pr i c et hi swayi ses pec i al l yt r uewheni nves t or sbuyl ar geamount sof s mal l er ,l es s er known c r ypt oc ur r enc i es .I ti st r ue;s omei nves t or s mi ghtdot hi st ot r yt hent o‘ pump’ t hepr i c eandt hen‘ dump’ t hei r c oi nsf oragr eat err et ur n–anac tt hati si l l egal .However ,c hanges i npr i c esbec aus eoft hei rl ar gei nves t mentc anbeac c i dent al aswel l . When i nves t or s , par t i c ul ar l y wel l known ones , make a l ar ge i nves t menti nas mal lc oi n,t hi sc an pr ovi de ot her s wi t ht he c onfidenc et oal s obuy.Thi si nc r eas esdemandandt her ef or et he pr i c eoft hec oi n. Sc ams Unf or t unat el y,t her ehavebeenc as eswher ec r ypt oc ur r enc i eshave been devel oped asas c am.Thi sus ual l yt akest hef or m ofheavy mar ket i ng effor t s pr omi s i ng t he nextbi gt ec hnol ogy butl i t t l e devel opmentf ac t st os uppor tt hec l ai ms .I nt hes es i t uat i ons ,i ti s

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t ypi c alt hatt hedevel oper s‘ pr emi ne’t hec oi ns uppl ybef or ebei ng r el eas ed.Theyhol dal ar geamountofi t ss uppl y,andaf t ert hec oi n i sval ued,t heys el lt hei rc oi ns .Thedumpi nt ot hemar ketwi l lc r as h t heval uef oranyot heri nves t or s .Thes es c ammer swi l lhaveal ar ge s um ofmoneyf ort hei reffor t s .Asment i onedbef or e,t hi s‘ pump and dump’s t r at egy i sc ons i der ed i l l egal .Sadl y,i ti sdi ffic ul tt o pr os ec ut et hem ast hel aw hasnotc aughtupwi t hc r ypt oc ur r enc y mar ket sf ul l yt hr oughoutt hewor l d. Mar ketDi l ut i on Mor eandmor enew c r ypt oc ur r enc i esar eent er i ngt hemar ketata r api dpac e.Manyoft hes ear eheavi l ybas edont heBi t c oi ns our c e c ode,don’ tofferanynew i nnovat i onsorhavel i t t l et onopr ac t i c al ut i l i t y.Thi s mar ket di l ut i on makes i ti nc r eas i ngl y di ffic ul tf or pr omi s i ngal t c oi nst oc ompet e. I nnovat i on Bi t c oi n gave usbl oc kc hai ns ,Et heri sus ed wi t hs mar tc ont r ac t s , Peer c oi n us es a c ombi nat i on ofbot h POS and POW s ys t ems . Des pi t emar ketdi l ut i on, c oi nsdoc omeoutwi t hnew i nnovat i onsi n t ec hnol ogy.I tdoes n’ tguar ant eeac ur r enc ywi l lbec omes t r ongi n t hemar ket ,buti tdoesaffec tt hepr i c e. TheLaw andGover nment I ns omec ount r i es , c r ypt oc ur r enc i esar ebannedwhi l ei not her st hey ar ebei ngi nt egr at edi nt os oc i et y.Forexampl e,i nt hef al lof2017, bot hSout hKor eaandChi nabannedI COsbec aus eofi nves t ment pr ac t i c e c onc er ns . The l aws and t ax pol i c i es s ur r oundi ng c r ypt oc ur r enc i esar e bei ng f or med ata r api d pac ei n hopesof keepi ngupwi t ht hegr owi ngmar ket .However ,duet ot hel i mi t ed

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abi l i t yt oc ont r olc r ypt oc ur r enc ybyt hever ynat ur eofi t snet wor k, l aw andr ul esc an’ tal waysbeenf or c ed. I ns t abi l i t y Thi si sanewt ypeoffinanc i al mar ketwhi c hmeanst hatt her ewi l l be andi si ns t abi l i t y.Thepr i c eofac oi nc anc hanger api dl y,es pec i al l y whenyouc ons i deral lt hef ac t or st hathavebeenc over edi nt hi s s ec t i on. Thi s does make i nves t i ng i n c r ypt oc ur r enc yr i s ki er . However ,vol at i l i t yi sdec r eas i ngovert i me.Al waysmakes ur eyou pr oper l yr es ear c h your opt i ons and know your l i mi t s bef or e i nves t i ng.

Bear&Bul lMar ket s Thet er m bearandbul lmar ket sor i gi nal l ywer eus edi nr el at i ont o t hes t oc kmar ket ,butt hes amepr i nc i pal soft hes et r endsc anbe appl i edt ot hec r ypt oc ur r enc ymar ket .Aneas ywayt or emember t hedi ffer enc ebet weent het woi sbyt heani mal st heyr ef ert o. Abul l wi l lmovei t s ’ hor nsupwar dst oat t ac kwhi l eabearwi l ls wi pedown wi t hi t s ’ paws .I ft hemar kets howsnei t herpat t er n,i ti sas i deways mar ket ,and i ti sbes tt o del ayanyt r ans ac t i onsunt i ladi r ec t i on begi nst os how.However ,i tc anbedi ffic ul tt opr edi c twhent r ends wi l ls hi f tbec aus e bot ht r endsar e bas ed on t he emot i onsand s pec ul at i veopi ni onsoft r ader sandexper t s .

BearMar ket s A bearorbear i s hmar keti sonet hati ss howi ngl owerhi ghsand l owerl ows .Forexampl e,l et ’ ss ayt hepr i c eofc r ypt oc ur r enc i esf al l bec aus eofs t r i c tr egul at i onsf r om al ar gegover nmentbody.The mar kets eest hi s , t hei rt r us tbegi nst owaver , ands omebegi nt os el l . Thi sc ont i nuesast he mar ket sdi p mor e and t r ader sant i c i pat e

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c ont i nuedl os s es . Ther ei sadi ffer enc ebet weenabearmar ketandj us tac or r ec t i on. A c or r ec t i on i s of t en s hor t l i ved,l as t i ng f ewert han t wo mont hs . Cor r ec t i onsar eapos i t i ves i t uat i on,al l owi ngi nves t or st obuyi nt o t he mar ketata di s c ountpr i c e.However ,bearmar ket sar et he oppos i t e.Ther ec anbenoguar ant eewhent hel os s eswi l ls t opand wher et hebot t om mi ghtendup.

Bul lMar ket s Abul lorbul l i s hmar keti swhent hemar keti ss howi nghi gherhi ghs and hi gher l ows .Bul lmar ket s ar ec r eat ed by hi gh opt i mi s m, c onfidenc eandi nc r eas edt r us tt hatval ueswi l lhol dori nc r eas e.A bul lmar keti sagoodi ndi c at i onofas t r ongandgr owi ngec onomy. I nt he c as e ofc r ypt oc ur r enc i es ,i mpr ovement si nt ec hnol ogy, i nc r eas edadopt i onr at esandpos i t i vec hangesi nr egul at i onsc anbe t r i gger s .

Techni calAnal ys i s Tec hni c al anal ys i si st hes t udyofhi s t or i c al pr i c emovementbyus i ng c har t sandgr aphs .Thegoali st obeabl et oi dent i f ypat t er ns ,and pr i c epat t er nst endt or epeatt hems el vesi nt hemar ket s .Thi sf or m ofanal ys i sal ong wi t hf undament alanal ys i swi l lhel p you make bet t erpr edi c t i onsandbec omeas t r ongert r ader . Wheneverwear eus i ngt ec hni c alanal ys i s ,wear eus i ngavar i et yof c har t st hatmeas ur edi ffer entas pec t soft hepr i c emovement .We r ef ert ot hes ec har t sast ec hni c ali ndi c at or sori ndi c at or s .Ther ear e doz ensofi ndi c at or st hatyouc anus ewheneveryou’ r et r adi ng. Eac h oft hes ei ndi c at or swi l l haveatl eas tones t r at egyt hatyouc anappl y t oant i c i pat et hef ut ur epr i c eac t i on.

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Thechar ti t s el fwor ksonanX( hor i z ont al )andY( ver t i c al )axi s .The Xaxi ss howsust het i met hathaspas s edupunt i lt hepr es entt i me, and t heYs howsust hepr i c eoft hec oi n.Thec andl es t i c ksexi s t bet ween t he t wo asc ol or ed bl oc ks .Dependi ng on t he c har t i ng s ys t em youus e,t hebl oc ksc oul dber edandgr een,orot herc har t s us er edandbl ue. Someoft hebl oc kswi l l bel ong, s omewi l l bes hor t , s omewi l lhavel i nesc omi ngoutoft het opandbot t om oft hem and ot her swi l lhavenol i nesatal l .Al one,ac andl es t i c kdoes n’ toffer muc hi nf or mat i on.Themor ec andl es t i c ksyouhave,t hemor eyou c ananal yz ehow t hec andl es t i c ksi nt er ac twi t heac hot her ,andt hat wi l lal l ow yout ounder s t andbet t erhow t hepr i c ewi l lmovei nt he f ut ur e. Thebodyoft hec andl es t i c kr epr es ent saper i odoft i meandar e c ol or edt os how uswhi c hdi r ec t i ont hepr i c emoved.Dependi ngon t het i mef r amet hatyou haves etyourc har t i ngs ys t em t o,eac h c andl es t i c kc oul dr epr es entavar i et yoft i meper i ods . Thecol oroft hec andl es t i c kwi l l l etusknowwhet hert hepr i c ewent UP orDOWN dur i ng t he per i od.Di ffer entc har t i ng s ys t emsc an s how di ffer entc andl es t i c kc ol or s .I fi t ’ sabl ueorgr eenc andl es t i c k, t hi smeanst hatt hepr i c emovedupf ort hatper i odoft i me.I fwe havear edc andl es t i c k,i t ’ sj us tt heoppos i t e.I tmeanst hatt hepr i c e i smovi ngdownf ort hatt i meper i od. Thet opandbot t om ofac andl es t i c khavet hei rmeani ngst oo.The t opofar edc andl es t i c ks howsuswhatt hepr i c ewaswhenevert he c andl es t i c ks t ar t ed. Thebot t om ofar edc andl es t i c ks howsuswher e t hepr i c eds t opped.Forabl ueorgr eenc andl es t i c k,i t ’ st heoppos i t e. Shadowsorwi cksofcandl es t i cksar et hel i nest hatc omeoutof t het opandbot t om.Theys how ust hef ul lpr i c emovementdur i ng t hec andl es t i c k’ st i meper i odast hepr i c ec ons t ant l ymovesi nt he

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mar ket .Forexampl e, i fyous eear edc andl es t i c kwi t hal i nec omi ng outoft het opofi t , i tmeanst hatt hepr i c emovedhi ghert hanwher e t hatc andl es t i c ks t ar t ed dur i ngi t st i meper i od.I fyou s eeawi c k c omi ngoutoft hebot t om oft hec andl es t i c k,i tj us tmeanst hatt he pr i c ewentl owert hanwher ei tc l os eddur i ngt hatt i meper i od.The s amehol dst r uef orbl ueandgr eenc andl es .

Us i ngCandl es t i ckst oAnal yz eTr ends Whenl ooki ngatac andl es t i c kc har t ,youar et r yi ngt os eeapat t er n wher et hepr i c ei sc l ear l ymovi ngi nonedi r ec t i onf oraper i odof t i me.You c an s pota t r end when a s er i es ofc andl es t i c ks ar e t r avel i ng i n a di r ec t i on.Ther ef or e anal yz i ng j us ta handf ulof c andl es t i c ksi s n’ tver yhel pf ul .Tr endsc anbedonei nanhourorl as t mont hs . Ther ear eupwar dt r endswher ebuyer sar ei nc ont r ol oft he mar ket s ,andt hepr i c ei smovi ngi nagener alupwar dsdi r ec t i on. Ther ear eal s odownwar dt r endswher et hes el l er sar ei nc ont r olof t he mar ket ,and t he pr i c ei s movi ng i n a gener aldownwar d di r ec t i on.

Fi bonacciRet r acement s A Fi bonac c ir et r ac ementi s at ool us ed i n t ec hni c al anal ys i s .Thi st oolr ef er st o ar eason c har t st hats how expec t ed ar easofs uppor t and r es i s t anc e;when t he pr i c eofac oi ns t opsgoi ng l owert hati st he s uppor t l evelandwhent hepr i c es t opsgoi nghi ghert hati st her es i s t anc e l evel .Thi si sus ef uli nf or mat i on bec aus ei tc an i dent i f yt he bes t pl ac esf orpr i c et ar get s ,s t opl os s esandot hert r ans ac t i ons .

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Ar eas of s uppor t and r es i s t anc e ar e vi s ual l yr epr es ent ed by hor i z ont all i nesatkeyFi bonac c il evel s .Thes el evel sar ec r eat edby dr awi ng a t r endl i ne bet ween t he hi ghes tand l owes tpr i c e ofa per i od.The t oolwi l lt hen di vi de t he ver t i c aldi s t anc e by key Fi bonac c i r at i osof23. 6%, 38. 2%, 50%, 61. 8% and100%. Thes er at i os ar emat hemat i c al l ys i gni fic antnumber st hatoc c uri n nat ur eand of t en f ors ome r eas on i n financ i almar ket s .Hi s t or i c al l y,af t era s i gni fic antpr i c e movementup ordown i nt he mar ket ,t he new s uppor tandr es i s t anc el evel sar eof t enatorneart hes el i nes . Thes el evel sdon’ tmovewi t ht hec har tasmovi ngaver ageswoul d. Thi sal l owst r ader st obet t erpr edi c tandr eac tt ot hemar ketwhen pr i c el evel sar et es t ed.Thes er at i ol evel ss how pl ac eswher ei ti s us ual l yexpec t ed t hatt hemar ketwi l ls t r uggl et hen f al ll oweror br eakt oanew hei ght . Themos ts i gni fic antFi bonac c ir et r ac ementl evelt owat c hf ori st he 0. 618.Thi si st hei nver s eoft hegol denr at i o, 1. 618orphi .The0. 618 r et r ac ementl evelt endst obet hemaxi mum pul l bac kz onewher e f earc l i maxesast hefinals el l er st hr ow i nt het oweland bar gai n hunt er sr us hi nt ot hes t oc kt or es umet heupt r end.Ondownt r ends , t he0. 618pr i c el evel s houl dbewher et hefinal buyer sar eexhaus t ed as s el l er st ake t he oppor t uni t yt o unl oad t hei r pos i t i ons and s hor t s el l er sj umpofft hef enc et opus hdownt hepr i c eandr es ume t hedownt r end. Fi bonac c ir et r ac ementl evel sc anbeus edast r i gger sf orbuyor der ordr awbac ksi nanupt r end. I nadownt r endi ngmar ket , youc anus e t hes el evel st os hor ts el l .Asment i onedbef or e,us emor et han2t o 3i ndi c at or st os t r engt henyourpr edi c t i ons .Forexampl e,a200day movi ng aver age t hatover l aps wi t h ar et r ac ementl evelwoul d i ndi c at eanevens t r ongers uppor torr es i s t anc epoi nt .Ti p:Al ways l ookatt he0. 618/ 61. 85l evelasi ti st hemos ti mpor t antone.Thi si s

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wher et hemar kett endst obounc ebac koutoff ear .

MACDI ndi cat or s MACD s t ands f or ‘ movi ng aver age c onver genc e di ver genc e. ' I t s hows t he s hows t he r el at i ons hi p bet weent womovi ngaver ages ofpr i c es .Whi l et henamemay s oundc ompl i c at ed,i ti ss i mpl e t o us e. MACD i s popul ar bec aus e ofi t sabi l i t yt o hel p qui c kl ys poti nc r eas i ng s hor t t er m moment um whi c h i s hel pf ul when c r eat i ng your s hor t t er m s t r at egi es . TheMACD i sc al c ul at edbys ubt r ac t i ngt heval uef ort hel ongt er m movi ngaver agef r om t hes hor t t er m aver age. I nMACDc al c ul at i ons , 12and26dayexponent i almovi ngaver agesar eus ed.TheMACD c anbec us t omi z edt ofitanys t r at egy,butt hedef aul t sar et hes e26 and12dayper i ods .Ther es ul toft hi sc al c ul at i oni spl ot t edont he gr aph.As i gnall i nei spl ot t edont heMACD c har tbyus i nga9day exponent i almovi ngaver agec al c ul at i onandwor ksasat r i ggerf or buyands el lpoi nt s .

Readi ngt heSi gns Cr os s over s Whent heMACDf al l sbel owt hes i gnal l i ne, i ti sabear i s hs i gnal .Thi s t ypi c al l ymeansi tmaybet i met os el l .Whent heMACDr i s esabove t hats i gnal l i ne, i ti sabul l i s hs i gnal , andt hepr i c ei sl i kel yt oc ont i nue movi ngupwar d. I ti sas af es t r at egyt owai tunt i l t heMACDhasr i s en

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above t he s i gnall i ne f ora s hor tper i od t o avoi dj umpi ng i nt o pos i t i ont ooear l y.Ot her wi s e,i tc oul ddi pbac kbel ow t hes i gnall i ne qui c kl ywhi c hi sac ommonmar ketc or r ec t i on. Di ver genc e Di ver genc er ef er st o when t he t wo 12 and 26 daysexponent i al movi ngaver agesbegi nt omoveapar t .Whatt hi sr eal l ymeansi sa pr i c el ow i snotac c ompani edbyal ow oft heMACD.Thi ss i t uat i on us ual l ys i gnal st heendofat r end. Ri s i ngDr amat i c al l y Whent hes hor texponent i almovi ngaver agepul l sawayf r om t he l ongt er m ver s i on,i twi l ls how ast heMACD r i s i ngdr as t i c al l y.Thi s t endst obeas i gnt hatt hec r ypt oc ur r enc yhasbeenover boughtbut wi l lr et ur nt onor mall evel ss oon. Pos i t i ont ot heZer oLi ne Anot hers i gnal t owat c hf ori st hepos i t i onoft heMACDi nr el at i ont o t hez er ol i ne.Thez er ol i nei sof t ens hownbyas ol i dhor i z ont all i ne on t hec har t s .I tr epr es ent st hel ongt er m aver ageand ac t sasa s uppor torr es i s t anc el evel .Upwar dmoment um i sr epr es ent edby t he MACD movi ng above t he z er ol i ne meani ng t he s hor t t er m aver age i s above t he l ong t er m.Rever s et hi ss i t uat i on,and a downwar dt r endc oul dbef or mi ng.

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Rel at i veSt r engt hI ndex( RSI ) Ther el at i ves t r engt hi ndex( RSI )s houl dn’ t bec onf us edwi t hr el at i ves t r engt hwhi c h c ompar e’ st he per f or manc e ofa c oi n’ s pr i c et ot heover al l mar ketaver age.RSIi s at oolyouc anus et ofigur eouti fac oi n hasbeenover boughtorover s ol dwhi c h c an pr ovi de you wi t h ent r y and exi t s i gnal s .I tc anal s ohel ps potorc onfir m r ever s al st hr ough moni t or i ngf ordi ver genc es .I ti samoment um i ndi c at ort hatmeas ur est hes peedandc hangeofpr i c emovement s . Val uesmovebac kandf or t hbet ween0and100. When t he RSIgoes70 orabove,i ti ndi c at est he c oi n hasbeen over boughtorover val ued.I fi tgoes30orbel ow,t heni thasbeen over s ol d orunder val ued.I n bot hs i t uat i ons ,i ti svul ner abl et oa t r endr ever s al .Thedef aul tt i mef r amef orc ompar i ngupper i odst o downper i odsi s14t r adi ngdays . TheRSIi sal s ous edt os potdi ver genc e.Whent hepr i c ei sr i s i ng, but t heRSI i sf al l i ng, t hi si sknownasabear i s hdi ver genc e. Whenbuyi ng moment um i ss l owi ngl i ket hi st hent hi si sawar ni ngt hatt hepr i c e c oul ds oon c or r ec tl ower .Bul l i s h di ver genc ei swhen t hepr i c ei s f al l i ng,butt heRSIi sr i s i ng.I twar nst hepr i c ec oul ds oon move hi ghers i nc es el l i ngmoment um i ss l owi ng. Eac hc oi n wi l lmovedi ffer ent l yand c oul d havedi ffer entr anges . When you not i c et he pat t er n, adj us tt he l evel t o s ui tt he movement s .Thi sc oul dmean40maybeabet t erent r ypoi ntt han 30.Fal s e buyors el ls i gnal sc an happen i nt he RSIi ft her e ar e s uddenl ar gepr i c emovement s .Tooffs ett hi si s s ue,s omet r ader s us ehi gherandl owerval uess uc has80and20asbuyors el l s i gnal s .

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However ,i ti sver yi mpor t antt ous eot hert ec hni c ali ndi c at or st o c onfir m yourpr edi c t i onswhenus i ngt heRSIi ndi c at or .

Movi ngAver ages Ther ear es ever alt ypesof movi ng aver ages , r egar dl es soft het ype,t hey ar e al lc ons i der ed t o be l aggi ng i ndi c at or s .Laggi ng i ndi c at or sar eal lbas edon whathasal r eadyhappened whi l e pr edi c t i ve i ndi c at or s hel p us figur e out what mi ghthappeni nt hef ut ur e. Si mpl eMov i ngAv er ageandWei ght edMov i ngAv er age Bas ed on t hi si nf or mat i on youmayt hi nkt heyar en’ tver yus ef ul .Thi si s n’ tt r ue;t heyc anbe us edt odet er mi net hes t r engt hofamar kett r endaswel lashel p dec i debet ween ac t ualmar ketr ever s alpoi nt sand c ommon r at e fluc t uat i ons .Onl y3ar ec ommonl yus edbyt r ader s .Thes ear et he s i mpl e movi ng aver age,t he wei ght ed movi ng aver age,and t he exponent i almovi ngaver age.I twi l lt akes omet es t i ngt odet er mi ne whi c h of t he movi ng aver ages fit s your t r adi ng s t yl e. We r ec ommendyous t ar twi t ht hes i mpl emovi ngaver agebas edont he l as t20pr i c es .

Si mpl eMovi ngAver age Thes i mpl emovi ngaver agei sc al c ul at edbyt aki ngas etofpr i c es , addi ng t he pr i c es t oget herand t hen di vi di ng t he t ot alby t he numberofdat apoi nt s .I ti st hes i mpl es tf or m ofmovi ngaver ages . Thi si sc al c ul at edi nawayt omovei nr es pons et ot hemos tr ec ent dat at hatwasus ed.I fyouc hoos et oi nc l ude20oft hemos tr ec ent

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exc hanger at es ,t hent heol des twi l lbet her at et odr opoutoft he c al c ul at i on when anew pr i c et akeseffec t .Aseac h new pr i c ei s i nc l uded,t heol des tonedr ops ,t hi sc al c ul at i ont ypeens ur est hati t i sonl ybas edont hemos tr ec ent20pr i c es .

Wei ght edMovi ngAver age A wei ght edmovi ngaver agei sc al c ul at edi nt hes amewayast he s i mpl ever s i on.Theonl ydi ffer enc ei st hi sc al c ul at i onus esval ues t hatar el i near l ywei ght ed.So,t he ol des tr at ei nt he c al c ul at i on woul dr ec ei vear at i ngof1; t henextol des twoul dr ec ei vea2, ands o on unt i lt hemos tr ec entr at e.Thi sens ur est hatt hemos tr ec ent r at eshaveagr eat eri mpac tont heaver aget hant heol des t .Some t r ader sfind t hi smet hod mor er el evantf ort r end det er mi nat i on, es pec i al l yi naf as t movi ngmar ket .However ,t her ei sadowns i de. Theaver agel i net hati sc r eat ed c oul d bemor er agged t han t he s i mpl emovi ngaver agever s i on.Thi smeansi tc oul dmakei tmor e c ompl i c at edf oryout ofigur eouti fat r endi shappeni ngorj us ta fluc t uat i on.Sol ut i on:youc anus ebot hver s i onsont hes amepr i c e c har tt os eehow t heyl i neup.

Exponent i alMovi ngAver age J us tl i ke t he wei ght ed movi ng aver age,t he exponent i almovi ng aver age i ss i mi l art ot he s i mpl e movi ngaver age.The di ffer enc e bet ween t he t wo i st he s i mpl e movi ng aver age wi l lr emove t he ol des tpr i c ewhent henew onei si neffec t .Anexponent i almovi ng aver agec al c ul at esf r om t hes t ar t i ngpoi ntyouc hoos et heaver age ofal lt hehi s t or i c alr anges .Let ’ sgobac kt oouri ni t i alr angeoft he l as t20pr i c es .Thefir s tc al c ul at i onyour ec ei vewi l lbei dent i c alt oa s i mpl emovi ngaver agebec aus et her ear e20pr i c es( orr epor t i ng per i ods ) .Thi si s wher e an exponent i almovi ng aver age di ffer s . Whenanew pr i c ebec omesavai l abl e,i ns t eadoft aki ngt hemos t

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r ec ent20aswi t ht hes i mpl eaver age, youwi l l nowhavet heaver age on21r epor t i ngper i ods . Asnewpr i c est akeeffec t , t heyar ei nc l uded i nt het ot alpi ec esofdat aus edt ofindt heaver age.

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Chapt er8:

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