CRYPTOCURRENCY TRADING GUIDE « TRADING THE DECENTRALIZATION OF THE FINANCIAL SYSTEM » For Beginners & Advanced Cryptocurrency Traders Cryptocurrency Trading Guide © April 2018 George M Protonotarios © -All rights reserved ExpertSignal.com Distribution by Qexpert.com ExpertSignal.com / 87 «Trading the Decentralization of the Financial System» CRYPTOCURRENCY TRADING GUIDE « TRADING THE DECENTRALIZATION OF THE FINANCIAL SYSTEM » - TABLE OF CONTENTS PREFACE CHAPTER-1: INTRODUCTION TO CRYPTOCURRENCIES «The New Decentralized Financial Era» - The Short History of Crypto - Cryptocurrency FAQ CHAPTER-2: STORING CRYPTOCURRENCIES - Cryptocurrency Wallets - Taxation CHAPTER-3: PROMISING CRYPTO PROJECTS - Evaluating Cryptocurrencies - Promising Projects RIPPLE | EOS | IOTA | ETHEREUM | STELLAR | NEM CARDANO | NEO | TRON | BITCOIN | LITECOIN CHAPTER-4: TECHNICAL ANALYSIS THEORIES «Key Technical Analysis Theories» - Elliott Wave Theory - Six (6) Phases of Dow Theory - Harmonic Patterns / 87 «Trading the Decentralization of the Financial System» CHAPTER-5: TRADING PLATFORMS - Online Cryptocurrency Platforms - MT4/MT5 Platforms - CFD Accounts CHAPTER-6: TECHNICAL INDICATORS «Technical Analysis Indicators» - Creating Custom Indicators - MACD - Moving Averages CHAPTER-7: MONEY MANAGEMENT «The Importance of an Effective Money Management System» - The Two Basic Questions for Successful Trading - Trading Leverage & Formula CHAPTER-8: CRYPTOCURRENCY EXCHANGES - Evaluating Exchanges - List of Crypto Exchanges APPENDIX - Trading Orders - Website Resources REFERENCES BIBLIOGRAPHY / 87 «Trading the Decentralization of the Financial System» PREFACE: Since 2009, cryptocurrencies have changed the rules of the global financial game A decade ago, the issue, exchange, and use of digital money without the intervention of a centralized bank was a dream for the financial industry That dream came true faster than anyone could have predicted The global penetration of the World Wide Web works as an accelerator to the acceptance of every new technology that aims to serve the emerging needs of people This is the ultimate goal of every technology, to better meet the needs of people, and nothing else matters There are many academics considering cryptocurrencies as a bubble ready to burst, paying a lifetime lesson to everyone involved These academics simply cannot understand the magnitude of the financial revolution emerging from cryptography It should be irrelevant for academics if the price of Bitcoin moves from $20,000 to $3,000 and then back to $20,000 What really matters is the technology behind the cryptocurrency ecosystem Actually, cryptocurrencies themselves are just a simple application of the Blockchain technology, just the top of the iceberg Cryptography, Scalable Blockchain, Smart Contracts, Smart Assets, Decentralized Apps, Directed Acyclic Graph, and other technologies are here to stay, and promise to change our financial universe for good Nevertheless, from a trader’s point of view, price matters, and this ebook includes a wide variety of useful resources and tips in order to help traders understand the behavior of the cryptocurrency market and explain the extreme fluctuations of cryptocurrency asset prices / 87 «Trading the Decentralization of the Financial System» Graph-1: Currency is only the top of Iceberg As in the case of every other major revolution, there are many scammers in the crypto industry, who are trying to take advantage of the lack of regulation and make money by deceiving the public The World Wide Web includes a great variety of website resources and especially forums (APPENDIX) that may help cryptocurrency traders to avoid these scammers George M Protonotarios, Athens Financial Analyst -Msc in “Int Banking & Finance” Salford, UK Linkedin: » https://www.linkedin.com/in/qexpert/ / 87 «Trading the Decentralization of the Financial System» Chapter-1: Introduction to Cryptocurrencies The New Decentralized Financial Era Cryptocurrencies are virtual currencies operating as a decentralized network, using cryptography for security, and a public ledger (the Blockchain) to record all transactions Cryptography is an encryption method that uses advanced techniques to verify and secure transactions, the Blockchain refers to a database that records all coin transfers The History of Crypto at a Glance Bitcoin is the first decentralized peer-to-peer payment network The first ever Bitcoin started in a cryptography mailing list sent by the nickname Satoshi Nakamoto in 2009 This is the short history of cryptocurrencies: □ 1983: The American cryptographer David Chaum conceived an anonymous cryptographic electronic money called eCash / 87 «Trading the Decentralization of the Financial System» □ 1995: The implementation of Digicash, an early form of cryptographic electronic payment requiring user software and encrypted keys in order to withdraw notes from a bank □ 1996: Laurie Law, Susan Sabett, and Jerry Solinas (NSA Cryptology Division) published a paper entitled “How to Make a Mint: the Cryptography of Anonymous Electronic Cash”, describing a Cryptocurrency system □ 1998: Wei Dai published a description of "b-money", an anonymous, distributed electronic cash system □ 2009: Bitcoin creation by Satoshi Nakamoto (nickname) using a SHA-256 cryptographic hash function as its proof-of-work scheme □ 2011: The release of Litecoin, using for the first time scrypt instead of a SHA-256 cryptographic hash function □ 2012: The official release of Ripple (Ryan Fugger conceived Ripple in 2004) □ 2013: Mastercoin is the world’s first initial coin offering (ICO) In November, the world's first Bitcoin ATM opens □ 2014: The world’s largest exchange ‘Mt Gox’ declares bankruptcy Due to a vulnerability in the protocol, 6% of all circulated Bitcoins were stolen from the “cold storage” of Mt Gox □ 2015: The release of Ethereum (proposed by Vitalik Buterin), a revolutionary platform that attracted immediately hundreds of cryptocurrency developers □ 2017: The cryptocurrency prices are booming in astronomical levels The total market capitalization of cryptocurrencies exceeds for the first time 100 billion US Dollars The global financial and monetary system will never be the same again / 87 «Trading the Decentralization of the Financial System» Cryptocurrency FAQ What are Altcoins and Forks? Altcoins are all cryptocurrencies alternative to Bitcoin Most altcoins are Forks of Bitcoin A Bitcoin Fork is a crypto-coin built on Bitcoin’s open-sourced protocol (i.e Litecoin) There are also cryptocurrencies that have built their own protocols including Ethereum, Ripple, Waves, and many more How Many Cryptocurrencies are there? Today, there are more than 1,500 cryptocurrencies available over the internet What is the Blockchain? The Blockchain is an open-source decentralized technology that verifies and records all transactions via the use of a public ledger After the completion of a certain number of transactions, the Blockchain generates a new block -A block is a database entry, which stores information about the present and all previous transactions -Each blockchain process is executed using an ecosystem of millions of community computers which store their own copy of the blockchain’s records Only if all copies are in agreement, a block becomes a permanent link in the Blockchain What are Tokens? The ecosystem of cryptocurrencies includes coins and tokens Tokens are digital projects created through an Initial Coin Offering (ICO) and differ from coins due to their structure Tokens operate on top of a Blockchain in order to create decentralized applications These projects trade on cryptocurrency exchanges as common altcoins / 87 «Trading the Decentralization of the Financial System» Initial Coin Offerings (ICOs) An Initial Coin Offering is the introduction of a new altcoin in the cryptocurrency ecosystem It is the same as an IPO for stocks The world’s first ICO was held by Mastercoin in July 2013 Bitcoin Mining Bitcoin mining refers to the process of verifying all Bitcoin transactions and include them in a public ledger (Blockchain) Mining is a completely decentralized process with miners operating in all over the world Miners get new Bitcoins as a reward for their efforts As more miners join a network, mining becomes increasingly less profitable Note, that NOT every digital currency requires mining and miners Delegated Proof of Stake (DPoS) As mining is too wasteful of energy, a blockchain engineer (Daniel Larimer) built the Delegated Proof of Stake, or DPoS, which is an alternative to the traditional ‘Proof of Work’ used by most cryptocurrencies DPoS can handle up to 100,000 transactions per second, whereas Bitcoin can handle only transactions and Ethereum up to 20 transactions per second There are quite a few platforms that have adapted DPoS including EOS, Steem, Bitshares, Lisk, and Ark 10 / 87 «Trading the Decentralization of the Financial System» LOCALBITCOINS ■ TYPE: P2P BITCOIN EXCHANGE ■ WALLET: YES ■ HEADQUARTERS: FINLAND ■ ONLINE SINCE: 2012 (LocalBitcoins Oy) ■ CUSTOMER SERVICE: EMAIL | FORUM ■ LANGUAGES: ENGLISH | SPANISH | FRENCH | PORTUGUESE | RUSSIAN | ITALIAN INFORMATION ABOUT LOCALBITCOINS P2P MARKET LocalBitcoins is the largest Peer-2-Peer decentralized BTC marketplace allowing users to exchange FIAT currency for Bitcoins The marketplace consists: (i) Traders, and (ii) Users, 'Traders' create advertisements with the price and the payment method they want to offer 'Users' respond to these advertisements, and if they both agree, a transaction completes There are more than 60 different payment methods available and that makes LocalBitcoins an easy solution for everyone wishing to buy Bitcoins You can store your Bitcoins at LocalBitcoins or use an external wallet The LocalBitcoins team recommends the Electrum Wallet, which is free -Buy/Sell Bitcoin for fiat currency -LocalBitcoins requires no verification ■ SUPPORTED COUNTRIES: 248 COUNTRIES ■ FIAT CURRENCIES: NO RESTRICTIONS (ALL CURRENCIES) ► The LocalBitcoins Exchange 73 / 87 «Trading the Decentralization of the Financial System» LIVECOIN ■ TYPE: WIDE CRYPTO EXCHANGE ■ WALLET: YES ■ HEADQUARTERS: UNITED KINGDOM (UK) ■ ONLINE SINCE: 2013 (DELTA E-COMMERCE LTD) ■ CUSTOMER SERVICE: EMAIL | CHAT SERVICE ■ LANGUAGES: ENGLISH | SPANISH | RUSSIAN | CHINESE | PORTUGUESE | FRENCH | ITALIAN | INDONESIAN INFORMATION ABOUT THE LIVECOIN EXCHANGE Based in the United Kingdom, LiveCoin is a multi-functional Bitcoin/Altcoin exchange offering a very wide crypto asset index LiveCoin support the exchange of 125 altcoins for FIAT currency ■ SUPPORTED COUNTRIES: ALL COUNTRIES (EXCEPT US) ■ FIAT CURRENCIES: USD | EUR | RUBLE ► Visit the LiveCoin Exchange 74 / 87 «Trading the Decentralization of the Financial System» BITBAY ■ TYPE: BITCOIN/ALTCOINS EXCHANGE ■ WALLET: YES ■ HEADQUARTERS: POLAND (EU) ■ ONLINE SINCE: 2014 ■ CUSTOMER SERVICE: EMAIL | CHAT SERVICE ■ LANGUAGES: ENGLISH | RUSSIAN | POLISH INFORMATION ABOUT BITBAY Operating since 2014, BitBay is a large Polish cryptocurrency exchange Bitbay offer the exchange of BTC, LTC, ETH, DASH, and a few more crypto assets by accepting USD, EUR, and PNL BiBay support credit credits and offer additional funding solutions such as the Bitomats ATMs and the BitBay Mastercard The BitBay platform is user-friendly and provides a full set of trade orders, including stop-orders, and 'Fill-or-Kill' orders ■ SUPPORTED COUNTRIES: 240 COUNTRIES ■ FIAT CURRENCIES: EUR | USD | PNL ► The BitBay Bitcoin Exchange 75 / 87 «Trading the Decentralization of the Financial System» PAXFUL ■ TYPE: PEER-TO-PEER MARKETPLACE ■ WALLET: YES ■ HEADQUARTERS: USA, DELAWARE ■ ONLINE SINCE: 2015 (Paxful, Inc.) ■ CUSTOMER SERVICE: EMAIL | PHONE {+1 (865) 272-9385} ■ LANGUAGES: ENGLISH INFORMATION ABOUT PAXFUL PaxFul is a Peer-2-Peer Bitcoin exchange similar to LocalBitcoins Paxful operates as a decentralized marketplace trading only Bitcoin via a network of more than 1,200 vendors The marketplace operates as a mediator between Bitcoin traders and vendors and provides the framework for its users to interact and to exchange Bitcoins for FIAT currencies Paxful offer the wider selection of payment methods in the market (300+ methods) plus an escrow service for the maximum security of Bitcoin transactions ■ SUPPORTED COUNTRIES: Almost all countries ■ FIAT CURRENCIES: All Major currencies ► Visit the PaxFul Bitcoin Exchange 76 / 87 «Trading the Decentralization of the Financial System» COINMAMA ■ TYPE: BITCOIN MARKETPLACE ■ WALLET: NO ■ HEADQUARTERS: SLOVAKIA, ISRAEL ■ ONLINE SINCE: 2013 ■ CUSTOMER SERVICE: EMAIL | TELEPHONE (+1-800-261-6932) ■ LANGUAGES: ENGLISH INFORMATION ABOUT COINMAMA Founded in 2013, Coinmama is not a traditional Bitcoin exchange, as it sells Bitcoin and Ethereum out of a personal inventory Transactions are always between the trader and Coinmama Currently, traders can only buy (not sell) crypto -The marketplace does not offer a wallet Account Verification To place an order at Coinmama, you need to have your account verified Once you get verified, you can buy in total up to 10,000 USD worth of bitcoin by using credit/debit cards ■ SUPPORTED COUNTRIES: Most Countries, including 24 US States ■ FIAT CURRENCIES: Many currencies but pricing is always displayed in USD or EUR ■ REGISTERED: Coinmama is registered with FinCEN (US) ► The Coinmama Bitcoin Exchange 77 / 87 «Trading the Decentralization of the Financial System» BITMEX ■ TYPE: PEER-2-PEER CRYPTO EXCHANGE (LEVERAGED PRODUCTS) ■ WALLET: COLD WALLET ■ HEADQUARTERS: SEYCHELLES ■ ONLINE SINCE: 2014 (HDR Global Trading Limited) ■ CUSTOMER SERVICE: EMAIL | TICKETING SYSTEM ■ LANGUAGES: ENGLISH | CHINESE | RUSSIAN | KOREAN | JAPANESE INFORMATION ABOUT BITMEX BitMEX (Bitcoin Mercantile Exchange) is an innovative trading platform that offers access to the global cryptocurrency markets using margin-trading (trade leverage) on all of its products Note, that you can only deposit Bitcoin to Bitmex as no FIAT currency is supported Perpetual Contracts The marketplace operates with Perpetual Contracts A Perpetual Contract is a product similar to a traditional Futures Contracts in how it trades but does not have an expiry, so you can hold a position for as long as you like Perpetual Contracts trade like spot, tracking the underlying Index Price closely Bitcoin trades are offered in Spot and Futures trading options Be extremely careful if you decide to trade Perpetual Contracts and use trading leverage (especially if you are a beginner) ■ SUPPORTED COUNTRIES: Many Countries (but not the USA) ■ FIAT CURRENCIES: NONE ► The BitMex Bitcoin Exchange 78 / 87 «Trading the Decentralization of the Financial System» APPENDIX: Trading Orders & Website Resources (i) Trading Orders Cryptocurrency traders can place classic market orders but also pending orders and try to buy/sell crypto at best possible rates These are the main orders for trading crypto: Market order: Buying/selling a cryptocurrency at the current market level The great advantage of a market order is the speed of execution, as you execute your trade almost immediately The great disadvantage is slippage, and that means get a worst price that you expected Executing market orders in non-liquid assets may prove a bad idea Especially as concerns volatile sessions, slippage on order execution can grow significantly In overall, market orders are effective only for trading liquid assets and only if the market conditions are not choppy Limit order: Placing an order for buying/selling a cryptocurrency in a specified price There are two outcomes: (i) it will be filled by someone else’s order at this specified price, and (ii) it will stay unfilled The advantage of a limit order is the protection that it offers against slippage and choppy market conditions In overall, limit orders are ideal for volatile and non-liquid markets Stop-loss order: Placing an additional order to limit the potential loss A stoploss order activates only if a specified price level has been reached Once this stop level has been reached, the position is automatically closed Stop orders can be used as a shield to limit the losses of a portfolio in case the market moves in the unfavorable direction Take-profit order: Placing an additional order to guarantee profits As in the case of a stop-loss, a take-profit order activates only if a specified price level has been reached Once this take-profit level has been reached, the position is automatically closed This type of order aims to protect your profit when the market is very volatile 79 / 87 «Trading the Decentralization of the Financial System» (ii) Important Websites for Crypto Traders These are some essential websites for cryptocurrency traders: □ Market Data: https://coinmarketcap.com/ https://www.coingecko.com/en □ Cryptocurrency News: http://www.coindesk.com/ https://cointelegraph.com/ https://www.ccn.com/ □ Experts on Twitter: https://twitter.com/VitalikButerin https://twitter.com/brian_armstrong https://twitter.com/rogerkver https://twitter.com/dan_pantera https://twitter.com/jgarzik https://twitter.com/bobbyclee https://twitter.com/ErikVoorhees 80 / 87 «Trading the Decentralization of the Financial System» □ Forums: https://bitcointalk.org □ Reddit Threads: https://www.reddit.com/r/icocrypto/ https://www.reddit.com/r/CryptoCurrency/ https://www.reddit.com/r/crypto/ https://www.reddit.com/r/CryptoMarkets/ https://www.reddit.com/r/Bitcoin/ https://www.reddit.com/r/altcoin/ 81 / 87 «Trading the Decentralization of the Financial System» REFERENCES ■ Wikipedia, the Free Encyclopedia: The History of Cryptocurrencies https://en.wikipedia.org/wiki/Cryptocurrency ■ Bitcoin.org: Bitcoin: A Peer-to-Peer Electronic Cash System https://bitcoin.org/bitcoin.pdf ■ Coinmarketcap: Compare the Market Capitalization of Cryptocurrencies https://coinmarketcap.com/coins/views/market-cap-by-total-supply/ ■ ExpertSignal.com: Comparing Crypto Exchanges http://expertsignal.com/index.php/cryptocurrencies/bitcoin-exchangescomparison Cryptocurrencies -Frequently Asked Questions http://expertsignal.com/index.php/cryptocurrencies/cryptocurrency-faq ■ HackerNoon.com: Delegated Proof of Stake https://hackernoon.com/explain-delegated-proof-of-stake-like-im-5888b2a74897d ■ Medium.com: Cryptocurrency https://medium.com/topic/cryptocurrency ■ TradingCenter.org: Trading Leverage Formula http://tradingcenter.org/index.php/menu-training/training-online/theleverage-formula 82 / 87 «Trading the Decentralization of the Financial System» ■ Digital Coins (Official Websites): Bitcoin.org Ethereum.org Ripple.com Stellar.org Neo.org EOS.io Tron.Network Cardano.org IOTA.org Litecoin.com ■ SEC: Initial Coin Offerings (ICOs) https://www.sec.gov/ICO ■ Bloomberg: Bitcoin Trading Signal https://www.bloomberg.com/news/articles/2018-02-06/bitcoin-tradingsignal-that-returned-1-152-is-flashing-sell ■ “Trading World Markets Using Phi and the Fibonacci Numbers” ebook by George Protonotarios (2016) 83 / 87 «Trading the Decentralization of the Financial System» BIBLIOGRAPHY (1) Harmonic Trading, Volume One {Scott M Carney}……………………………………………………… (2) The Wave Principle {Ralph Nelson Elliott}…………………………………………………………………… (3) The Elliott Wave Principle: Key to Market Behavior {Robert Prechter}…………………………… (4) Elliott Wave Principle {A.J Frost and Robert Prechter}………………………………………………… (5) Market Wizards: Interviews with Top Traders {Jack D Schwager}………………………………… 84 / 87 «Trading the Decentralization of the Financial System» © George M Protonotarios 2018 85 / 87 «Trading the Decentralization of the Financial System» CRYPTOCURRENCY TRADING GUIDE «Trading the Decentralization of the Financial System» © George M Protonotarios 2018 COPYRIGHT INFORMATION ALL RIGHTS RESERVED No part of this eBook (including text, information, tables, analysis, resources and images) may be copied, reproduced, mirrored or sold DISCLAIMER AND LEGAL NOTICE The information presented in this eBook represents the view of the author Every attempt has been made by the author to verify all information included in this eBook, but there is no guarantee about the accuracy and the reliability of any information presented in this eBook This eBook is not intended for use as a source of financial or investment advice In addition, this eBook includes affiliate links 86 / 87 «Trading the Decentralization of the Financial System» RISK WARNING There is considerable exposure to risk when trading Cryptocurrencies, Forex, Futures and Options Trading Cryptocurrency, Forex, and other leveraged products involves a significant level of risk and is not suitable for all investors Before undertaking any such transactions you should ensure that you fully understand the risks involved and seek independent advice if necessary The possibility always exists that you could sustain a substantial loss Never trade with funds that you may need in the future Past performance is not necessarily indicative of future results Any opinions, suggestions, brokers, systems, services, software, reviews, promotions, bonus, rebates, links, and web-sites mentioned on this eBook are provided as general market commentary, and not constitute investment advice in any way RISK WARNING ON CRYPTOCURRENCIES -Warning: Please be careful with your money When sending funds to an exchange or other counterparty you are trusting that the operator will not abscond with your bitcoins and that the operator maintains secure systems that protect against internal or external theft It is recommended that you obtain the real-world identity of the operator and ensure that sufficient recourse is available Exchanging or storing significant funds with exchanges is not recommended RISK WARNING ON CFDs Trading in cryptocurrency CFDs involves significant risks Cryptocurrency CFDs are an extremely high-risk, speculative investment You should be aware of the risks involved and fully consider whether investing in cryptocurrency CFDs is appropriate for you Major Cryptocurrency Risks Price volatility Leverage Charges and funding costs Price transparency Cryptocurrency Trading Guide -Copyright © April 2018 George M Protonotarios ©-All rights reserved Distribution by Qexpert.com ExpertSignal.com 87 / 87 «Trading the Decentralization of the Financial System» ... ExpertSignal.com / 87 Trading the Decentralization of the Financial System CRYPTOCURRENCY TRADING GUIDE « TRADING THE DECENTRALIZATION OF THE FINANCIAL SYSTEM » - TABLE OF CONTENTS PREFACE... traders understand the behavior of the cryptocurrency market and explain the extreme fluctuations of cryptocurrency asset prices / 87 Trading the Decentralization of the Financial System Graph-1:... comparing the volume activity of multiple crypto coins: □ Ratio = (Volume/Market Capitalization) % -The greater the ratio, the better 21 / 87 Trading the Decentralization of the Financial System