[moltuae]

I do a little crypto-trading but mainly for the purposes of increasing my investments, i.e. I'm more of a 'longer' than a 'shorter'. I usually just buy and "hodl" (as they say) though sometimes I'll trade a little of one crypto for another to take back (and re-invest) my original investment, especially when the price has increased by 10-fold or more (which happens often if you pick good coins to invest in and you're willing to hold and wait several months). I hold around 40 different cryptocurrencies now. I find a varied portfolio gives a good steady investment growth and helps to hedge against losses. Some coins occasionally fall in value but there's usually something else that's rising when that happens. Overall, almost every cryptocurrency I have has risen in value since I bought it though.

So I'm no trading expert, but I have made a few hundred trades over the last few years and used numerous exchanges, including Kraken, Poloniex, Binance, Bittrex, Livecoin, Cryptopia and KuCoin (I've probably used a few more, but that's most of the ones I can think of right now).


The most important thing to remember is that exchanges are centralised custodial services (much like banks). They can (and sometimes do) get hacked so don't put an exchange in charge of your funds for any longer than you need to. Keep any funds that you're not immediately using for trading in a secure wallet, one which puts you in charge of your own private keys. To paraphrase Andreas Antonopoulos: Your keys, your funds -- not your keys, not your funds.

For my 'long' investments, I study any cryptocurrency before investing, looking at things like price vs scarcity, development transparency, value and community support. I will generally start by looking up the coin on CoinMarketCap but also by Googling, looking for relevant news articles and social media postings.

The price and scarcity (total/available supply), both of which you can get from CMC, will give you some idea of how much room there is for the price to rise. For example, BTC has a circulating supply of nearly 17 million and a value presently of about $11,000, giving it a total market cap of more than 180 billion dollars. So another coin may appear very cheap by comparison at under a dollar, but if the available supply is a few hundred billion coins, it would have to overtake BTC's market cap to achieve a price of just a few dollars.

For longer term investments it's also important to find where the potential value is and to follow developments. Check out the development team and try to determine if the project has real commercial value and whether what they're proposing is realistic. Having said that, even if you have doubts whether the project will succeed, if there's enough hype and interest, it may still be possible to make a good profit if you're getting in early enough and getting out a few months later if/when development appears to tail-off.

A large community can be another good indicator of a coin to invest it. If a coin has a lot of interest early on, the greater the chances are that it will quickly gather momentum and see a significant rise in price. You can get some idea of the community size by checking out a coin's announcement (or 'ANN') thread on Bitcointalk, the link to which is usually included on CMC.

Short-term investing (i.e partaking in 'pumping and dumping') can also be very profitable of course but it can also be much more risky and time consuming. And when you're looking for a suitable coin to short, none of the above really applies or matters. You can make a good profit from a completely worthless coin if you time it right, getting in on a pump wave and exiting before it dumps. The risk of course is that you may be left holding a worthless coin that never pumps above the price you paid. You could also attempt to short one of the 'good' coins too, such as Bitcoin, but the risk here is that you may mistakenly assume it's about to dump, selling on the high, only to find it continues on up, never giving you the opportunity to buy back at a lower price.

Trading on the exchanges is relatively straightforward and most of the exchanges are fairly similar to use. Essentially you begin by registering and depositing some funds to trade with, such as BTC. You will be given an address to send the funds to and, once cleared/confirmed (which can take anything from seconds to hours, depending on the coin), you can begin trading. To trade one coin for another, you simply choose the trading pair (eg BTC/ETH) and fill in the trade details, such as how much you want to buy and at what price. If the price you choose is around the present asking price the trade should execute fairly quickly, otherwise it will execute if/when the price falls sufficiently. Once you have the exchanged funds, you can withdraw it to your own wallet (subject to daily withdrawal limits) or continue to trade with it.