The crypto handbook for beginners

We don't have to tell you anymore that cryptocurrency is hot and happening and everyone is trading in it these days. But don't terms like blockchain or scalping mean anything to you right now? MASTERS together with Anycoin Direct explains it for you. Learn from the Masters.Text: Patrick StofferTo start right at the beginning: cryptocurrencies are digital currencies that can be used as a medium of exchange in the Netherlands to make purchases. However, the Dutch Central Bank (DNB) does not consider cryptocurrencies to be legal tender, as these coins often have a strong exchange rate. This is also one of the reasons why many people invest in crypto currencies. You can make a lot of money with them, but also lose a lot at the same time.

Blockchain 

All cryptocurrencies have a database that consists of a long chain of blocks, also called a blockchain. This blockchain technology is a network of computers that stores all crypto transactions ever made. Think of it as a digital cash book that records who paid what to whom. Each computer in the network has a copy of the same blockchain. As soon as someone wants to make a new transaction, it is checked by the other computers. If it is approved by the majority of those computers, another new copy comes along and the database is up to date again.

There are several (trade) roads that lead to Rome

That you can make a lot of money trading cryptocurrency is well known. The big difference is the method of trading, or trading. There are many ways you can buy and sell crypto, but these are the most common.

Daytrading
With this method of trading, you make multiple "trades" within one day. Here you benefit from the price fluctuations during that trading day. For example, you buy a crypto coin in the morning and sell it again in the evening. As a day trader, you need to have a lot of knowledge and experience. You can learn this by practicing with demo accounts, for example. A well-known day trader is Ross Cameron, in 2016 he made more than €200,000 profit. On his YouTube channel Warrior Trading he shows what his strategy is.

Scalping
This is the more extreme version of day trading. Of the four methods, scalping is the fastest. Scalpers make trades between small rises and falls in the price. A trade therefore lasts only a few seconds to a few minutes. The profits per trade are therefore not much, but because you make multiple trades it can still be profitable. This way of trading best suits people who can make decisions quickly and without any doubt. Above all, it requires a lot of concentration.

Swing trader
Swing trading is a form of trading where you assume profits within a short period of time. This can be days but also months. As soon as there are profits to be made, they are quickly taken. As a swing trader, you shouldn't get nervous if for a moment you are occupied with something other than your cryptocurrencies. The trades that are made are often based on trends and long-term plans.

Position trader
Finally, we cover the form of position trading. The long term view of the coin is very important. Here you buy a coin which you think will grow in the future. You may assume that you will hold this coin for years. Even if you have a big loss at some point, you hold on and continue to believe in this coin. It is important here that you keep track of the developments of this crypto and always critically evaluate them. A popular example is Bitcoin: as many as 79.5 percent of Bitcoin holders have owned this coin for more than 155 days, which is considered long-term investors.

You will have to figure out which form of trading suits you best. Above all, look at the amount of time you want to put into the research. There is money to be made with any trading strategy. Besides all the success stories you hear from others, there are certainly traders who lose (a large part) of his/her money. Be aware of the risks involved in trading cryptocurrencies. Online you can find many tips and tricks on how to minimize these risks. Make sure you enter the crypto world prepared.

Look, look, do buy?

Bitcoin is currently the most popular cryptocurrency out there, but in addition there are thousands of alternative cryptocurrencies (altcoins) that you could buy. Each crypto has its own mission, vision and applications, but in addition there is also a difference in how fast your transaction is processed. What should you research if you want to find out whether or not you should buy a crypto?

Technical analysis
Within this analysis, people look at historical price charts. Indicators and patterns are looked for. This data is used to predict future crypto currency prices. To master this, you mainly need to practice and read a lot about technical analysis.

Sentiment analysis
In this analysis, you look for people's opinions on the crypto currency. Here you can use communities such as reddit.com Among other things, you can find out what others think of a particular crypto currency and how they deal with news. It is especially important that you do your own research and form your own opinion on the news.

Fundamental analysis
This analysis is often considered the most valuable analysis. For example, here you look at the problem the coin can solve. Take Bitcoin as an example: Satoshi Nakamoto (the creator of Bitcoin) wanted to create a currency that is decentralized. Among other things, Bitcoin can be used to combat currency inflation.

In addition, within this analysis you can look at:

1. The white paper: a written explanation of the crypto currency;
2. Road map: the cryptocurrency's (technical) development plan;
3. The team behind the crypto currency.

Now that you know everything, you can start trading. You can do this through the Anycoin Direct, which also has a support team ready for you.