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 After reading a few, you realize many of these are out of date, and most of them are simply advertisements written by the creators of the exchange and disguised as informational articles.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


Crypto the Bitcoin Algorithm Newsletter Sunday September 17, 2017  #Bitcoin $BTCUSD $XBTUSD $BITCF $BTCS $BTSC $GBTC

Hello! My name is Crypto the Bitcoin Algo. Welcome to the member edition Bitcoin trade report for Compound Trading.

Like our other algorithmic chart models, I am in development and testing for coding phase to be used as an intelligent assistant for our traders (not HFT). My charting model is specifically suitable for the use and purpose of trading Bitcoin $BTCUSD, Bitcoin/USD perpetual swaps $XBTUSD and Bitcoin related equities.

Note: The model for $BTCUSD is built on a chart from the Bitstamp exchange. The $XBTUSD model is built on a chart from BitMEX. Prices on other exchanges may vary slightly from what you see on the model, so remember to keep that in mind when trading the model.

Notices: 

  • Our model for BitMEX: XBTUSD (perpetual swaps) is here! We will mainly be trading on BitMEX from here on out. 
  • $XBTUSD moves with $BTCUSD so trade alerts are still valid for $BTCUSD, however the prices will vary slightly.
  • Welcome our lead trader to the platform! You will now be receiving alerts from Curt as well as myself. 
  • A few of us had a great time team trading on mic in the Crypto Discord room last Wednesday night. I plan to be in there a few nights this week, if there are certain nights that would work best for you feel free to message me on twitter @reedshermanator and I’ll do my best to accommodate everyone. 
  • You can read my blog post about how to trade Bitcoin here. I will post an update with more information about BitMEX as soon as I can.
  • 24 hour trade room will be up and running very soon – A few things to keep in mind going in:
    • Curt, Sartaj and I will be #TeamTrading this in a very serious way.
    • #TeamTrading is key in a 24-hour room like this. No one can watch the model 24/7 (trust me I’ve tried) but as a team we can catch all of the best trades.
    • To make this work we need an orderly chat room, full of highly functioning people, all trading together.
    • In Curt’s words, the accuracy of the model plus the margins on Bitcoin combined with #TeamTrading will take this thing from Compound Trading to “uber quantum leap compound trading.” If done right, our ROI will be absolutely astronomical.
    • We will have a private Discord room for Cryptocurrency trading as well. I plan to use the voice channel to enhance our #TeamTrading and I hope many of you will join me in there.
    • As always, don’t hesitate to DM me on twitter (@reedshermanator) if you have any questions, comments, concerns, etc.
  • The Bitcoin-Related OTC stocks we follow had a good day on Friday:
    • $BITCF +37.29%
    • $BTSC +26.86%
    • $BTCS +31.08%
    • $MGTI +22.40%
    • $GBTC +21.53%

Primary Methods of Trade: 

Live Twitter Alert Feed for Bitcoin Trades: @BTCAlerts_CT


The primary method of trade we have found works with the most predictability is to wait for bitcoin to breach the upper right wall of a quadrant (the orange or grey diagonal dotted lines – the thicker orange lines are more significant) and confirm over the next horizontal Fibonacci resistance. You can expect to get to reach the midline of the upper quadrant – over the midline you can expect it to reach the next quadrant wall. Entering this trade near the apex of a quadrant gives you the widest trading range.

Throughout the current downtrend, the most predictable trade has been quick scalps when prices falls to the quad wall and bounces. This is especially useful when trading $XBTUSD because small scalps can really add up with (up to) 100x leverage on trades. An example of this is shown at the bottom of this week’s updates.

This method also works in reverse: Wait for Bitcoin to breach downward through the upper left wall of a quadrant, or fail when trying to breach upward through the upper left quadrant wall. Let it confirm under the next horizontal support and you can expect to see the midline of the quadrant – under the midline you can expect to see the next quadrant wall. Same as above, entering this trade near the apex of a quadrant gives you the widest trading range.

Channels: Another high probability trade is entering long as price rides up the bottom right wall of an orange quadrant. This is a safe trade to hold with a stop under the quad wall until the current time cycle expires. This trade works in reverse as well. You can enter short just under the upper right quadrant wall resistance, with a stop just over the quadrant wall, and hold until the current time cycle expires.

Horizontal Fibonacci Support/Resistance: The horizontal support/resistance lines are good indicators to use inside quadrants. The light green 0.5 Fibonacci line and the grey 1.0 or 0 fibonacci levels (midlines) are the most significant. Clusters of these lines represent significant support/resistance as well. Intersections of horizontal and diagonal Fibonacci lines represent an upcoming decision and create a high probability of a significant move out of sideways trade.

Resistance Clusters: Along with the algorithm indicators on the chart there are traditional support/resistance lines that are very important. When these lines converge volatility tends to increase. Under the cluster is a high probability short. If it does get through the cluster it becomes a very high probability long scenario as the HFT algos cover their shorts and load up long. The most recent cluster corresponded with the run over $3,000 to all time highs.

Targets: Red circles on charting. These are placed at the 2 most likely prices at the end of each 75-hour time cycle. These are still in very early stage of development/testing and should be used for observation only at this point. Two are provided for each quadrant time frame – the upper scenario targets should be considered if the trend is up and likewise for the lower. Only one is expected to hit on each time cycle.

Natural Support/Resistance: Natural support/resistance is represented on the chart by purple horizontal lines. Although generally reliable, these are not a great indicator in the current area of trade because they rely on history, and Bitcoin lacks that history over $3,000. The recent pullback has helped solidify natural support/resistance lines in the model. 

Conventional Charting: All decisions should be weighed against conventional charting (which is generally provided as well).

 

In summary, our first generation Bitcoin algorithm chart model uses the following indicators (listed from most predictable to least in terms of win rate): 

  1. Trading range created by long term algorithmic modeled quadrant support and resistance (orange dotted lines)
  2. Trading range created by short term algorithmic modeled quadrant support and resistance (grey dotted lines)
  3. Directional channels formed by long term algorithmic modeled support and resistance
  4. Long term classic trend lines (red diagonal lines)
  5. Horizontal Fibonacci support and resistance (multi-colored horizontal lines)
  6. Conventional Natural support and resistance (purple horizontal lines)
  7. Conventional MA’s and MACD

Observations in the current area of trade:

$BTCUSD using a wide trading range throughout China uncertainty. Bottom side of the channel acted as bottom for the pullback :

Upcoming time/price cycle and targets:

Despite heavy selling pressure, trade followed the model on the way down and back up. Trade has been a bit choppy but the pullback was due:

The conventional trend line below may come into play in current area of trade: 

Conventional charting shows $BTCUSD current area of trade: 

Conventional charting shows bottom for $XBTUSD pullback: 

 An extremely high probability trade in the $XBTUSD model comes up any time trade returns to test a quad wall. These are almost always good for a $20-$30 quick scalp or more. High probability scalps are great trades with up to 100x leverage on BitMEX: 

 

Examples of High Probability Trades in the Model: 

  • Below is a textbook example of the highest probability trade in the model (break of the upper right quad wall). Trades like this are repeatable and extremely predictable in the model.

  • Below is an example of a trade over a resistance cluster (and break of the quad wall). Notice the huge volume when the resistance cluster is breached. I went long on new candle over the quad wall/resistance cluster, added over the midline and exited at the upper quad wall.

  • Below is a trade using both the large orange quadrants and the smaller grey quadrants. First trigger is breach of the (shared) quad wall, then confirmed over the midline in the small quad. Struggled a bit with the next quad wall (I use tight stops when playing the smaller quadrants) but eventually got to my target at the midline.

 

  • Although the targets are still in very early development phase, we did get a direct target hit down to the second on August 22. Also a good example of a short opportunity as it enters the quadrant from the upper left and loses its mid line. Then another good long opportunity as it enters the small quadrant through the lower left wall, shown by the white arrows:

  • I’m not on the short side too often, but I will do it when the upper left quad wall is breached to the downside. Another high probability trade in the model, this one live tweeted:

 

  • The best ROI comes when trade moves between quadrants, but we can do some intraday scalping off the quad wall too.

  • And another live tweeted win on the break of a quad wall: