Cryptocurrency Trading 101

Cryptocurrency trading doesn't have to be hard. In simplest terms, for a beginner, it is a two or three step process. The first step is converting fiat currency (such as US Dollars) to cryptocurrency (such as Bitcoin or Ethereum). The second step is transferring this cryptocurrency from where you purchased it to an exchange (a cryptocurrency marketplace) where you can exchange for the coins you want in your portfolio. If you plan to buy and hold, a third step would be transferring these coins to a secure wallet.

There are basic rules that always apply, just like protecting your wallet or purse.

1. Make sure the wallet you use in step three is compatible with the currency you have purchased. For example, don't use an ERC20 wallet for your Bitcoin.
2. Keep a backup of your wallet information. Many times, there is not a “forgot my wallet address email me a reminder” option available. If you lose it, or your passcodes, you may have permanently lost your funds.
3. If you are not day trading or making multiple transactions, you probably don't want to keep money in an exchange. Your funds are more exposed to others who can hack and steal it.
4. Using an authenticator app will add an additional level of security to your accounts.

When I first started trading, these are the steps that I followed:

1. Open Coinbase account. Verify bank and purchase BitCoin.
2. Open Binance account.
3. Transfer Bitcoin from Coinbase to Binance.
4. Exchange Bitcoin for other coins I want in my portfolio (Binance feels very much like a stock exchange for cryptocurrency).
5. Most of the coins I purchased were ERC20 based, and so I opened a MyEtherWallet.com (MEW) account – an online wallet for storing my cryptocurrency.
6. I then transferred the coins I purchased on Binance to MEW for holding.

There are any number of ways to start, several different exchanges to choose from, and lots of wallet options (hardware wallet for cold storage...which is a glorified flashdrive; online wallets such as MEW and desktop wallets). This is just a basic cut-and-dry look at how I started. Whatever you do, don't sit on the sideline and let the Crypto-boom pass you by.