#BitcoinTrading 101: A Beginner’s Guide to Getting Started $BTCUSD $XBTUSD $BTC

Share this:Introduction. This year we’ve seen Bitcoin soar up more than 700% YTD and find its’ way out

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Introduction.

This year we’ve seen Bitcoin soar up more than 700% YTD and find its’ way out of the “Silk Road” obscurity and into the minds and portfolios of some of the biggest players on Wall Street. Naturally, you want in on these mind boggling returns – but when you log into the trading platform you have been using for years, you realize you can’t find $BTCUSD, $XBTUSD or any Bitcoin-linked equities on the traditional markets. You give your broker a call and they are no help, so you do a quick google search and find a million different articles telling you which Bitcoin exchanges are the best. After reading a few, you realize many of these are out of date, and most of them are simply advertisements written by the creators of the exchange and disguised as informational articles. There is information overload and you don’t know who you can trust when it comes to these exchanges. That is where most people give up, trying to answer the seemingly simple question: “how do I get started?”

Finally, we have a simple answer for you. This step by step guide will show you exactly how to set up an account with a safe, credible Bitcoin exchange so you can start trading as soon as possible. Depending on how you choose to fund your account, you can be trading in as little as 30 minutes!

Why Trust Us?

We have no affiliation whatsoever with any Bitcoin exchange. The exchanges featured in this post are only featured because we have personally used them with success, or one of our Bitcoin trade room members uses them and has given good feedback. Along with that, we have done extensive research into these exchanges before suggesting them to anyone. The goal of this post is to save you the time and trouble of doing that research so you can just start trading.

Exchanges:

The exchanges we use and trust are Coinbase, Bitstamp and Gemini. Each has their own advantages/disadvantages that I will list below. We also use the BitMEX exchange to trade leveraged Bitcoin derivative contracts. Please be aware that BitMEX has residency restrictions listed in their terms of service agreement. I would suggest reading over the terms of service before beginning to use any of these exchanges to ensure compliance. 

What you need to know:

CoinBase: Coinbase is a U.S. based exchange that is great for those who want easy, quick sign up and the ability to buy Cryptocurrencies to hold as a long term investment/store of value. However, there are some fundamental flaws that keep it from being the best option for active traders.

Pros

Cons

  • Instant verification (< 10 minutes)
  • Instant funding via debit/credit card
  • BTC, LTC or ETH available
  • Free access to Coinbase’s “vault” (multisig storage wallet) to protect your coins.
  • Trusted – No history of fraud or incompetence.
  • No minimum deposit
  • Settles in USD
  • Terrible for actively trading
    • Little to no trading platform setup
    • High fees (1.5% on some transactions)
    • Lagging price/long settlement times
    • No stop/limit orders
  • Deposit/funding limits
  • No margin trading

Bitstamp: Bitstamp is a E.U. based exchange with good liquidity and an easy to use trading platform that is good for both active traders and long term investors. Our original $BTCUSD model was built on a Bitstamp chart. I highly recommend Bitstamp for those who cannot trade on a leveraged platform such as BitMEX.

Pros

Cons

  • Trusted, regulated, bank backed.
  • No history of fraud or security issues.
  • Good liquidity
  • Intuitive trading platform with stop/limit orders available.
  • Low fees on trades and deposits/withdrawals (< 1%)
  • No minimum deposit
  • Debit card available for instant access to your funds (Not available for U.S. customers however)
  • Settles in USD
  • Slightly longer verification process
    • Requires ID and proof of residency
    • Processed in 24-48 hours generally
  • Withdrawals can take 5+ days for those outside of the E.U.
  • No margin trading

Gemini: Gemini is a U.S. based exchange that is regulated by the New York State Department and like Bitstamp, has an intuitive trading platform that works well for both active traders and long term investors alike.

Pros

Cons

  • Easy to set up
  • Intuitive trading platform
    • Limit buy/sell orders available
  • Good liquidity
  • Strong security
  • Good customer service
  • Low, percentage based trading fees
  • No fees for deposit
  • Settles in USD
  • No stop loss orders
  • BTC and ETH only
  • Not available in all U.S. States
  • Charts not available on tradingview yet
  • No margin trading

BitMEX: BitMEX is a Seychelles based cryptocurrency derivatives trading platform whose most popular product is their $XBTUSD Bitcoin/USD inverse perpetual swap contract. BitMEX is a traders dream – brilliantly designed and well thought out platform offering 100x leverage with tons of liquidity. There is nothing else out there like it.

Pros

Cons

  • Quick and easy account setup (<30 seconds)
  • No verification required.
  • Extremely low trade fees (.075%)
  • Up to 100x leverage
  • Great, customizable platform for traders
    • Stop orders, limit orders, trailing stops, stop limit orders·
  • Tons of liquidity
  • Settles in XBT
  • Nearly instant Bitcoin deposits
  • $1 USD minimum deposit
  • Top of the line security
  • Open API
  • Not available in the U.S.

 The Fastest Way to Get Started (That I’ve Found, at Least): Coinbase + BitMEX 

  1. Go to coinbase.com (Sign up through this link to get a bonus $10 worth of Bitcoin). If you go through this link, your screen will look like this:

2. Enter your first name, last name, email address and a password to create your account.

3. Verify your email address by clicking the link in the email sent by Coinbase. It should bring you to a screen that looks like this:

4. Choose “individual” and click next.

5. Enter your phone number for two factor authentication and click next.

6. Enter the code sent to your phone to finish creating your account. It should bring you to a screen that looks like this:

7. Find the “complete your account” section toward the bottom left of the page. Click on “verify your identity”. This menu will pop up:

8. Upload a picture of your preferred ID. Verification should happen in less than 5 minutes.

9. Choose a payment method to fund your account. The fastest is Credit/Debit card – you can purchase Bitcoin instantly this way, but only $300 at a time to start. If you want to start off with more, you can buy up to $10,000 using a bank transfer.

10. Go to bitmex.com and click “register”. This screen should come up:

11. Enter an email address, password and name then click register.

12. Confirm your email address by opening the link sent by BitMEX.

13. Open the “account” tab and click deposit.

14. Copy your BitMEX wallet ID then reopen Coinbase.

15. On Coinbase, click the accounts tab then under “BTC wallet” click send:

16. Paste your BitMEX wallet ID into the space. Make sure you double check that it is the correct wallet ID, then click send.

Your deposit should show up in BitMEX within 30-45 minutes and you are ready to trade! This can be done with any of the exchanges I mentioned above (not just Coinbase) however I used Coinbase for the example because their verification and funding is the fastest/easiest.

Hopefully this post helps answer your questions regarding how to get into trading Bitcoin and Cryptos in general. If you still have questions feel free to contact us on Twitter @CompoundTrading or @CryptotheAlgo

Peace and best everyone,

– Crypto Lead

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