Cryptocurrency: How to Make a Lot of Money Investing and Trading in Cryptocurrency 2017

Summary:

• Cryptocurrency: How to Make a Lot of Money Investing and Trading in Cryptocurrency by Aimee Vo is an informative guide for those interested in investing and trading cryptocurrency. The book provides readers with the necessary knowledge, tools, and strategies needed to make informed decisions when it comes to investing or trading cryptocurrencies. It covers topics such as understanding the basics of blockchain technology, how to buy and sell cryptocurrencies on exchanges, different types of wallets available for storing digital assets, risk management techniques for traders, tax implications associated with cryptocurrency investments/trades, and more.

  The book begins by introducing readers to the concept of blockchain technology – what it is and how it works. It then explains why cryptocurrencies are so popular among investors today before delving into details about buying/selling them on exchanges. This includes information about setting up accounts on various platforms (such as Coinbase), depositing funds into these accounts using fiat currency or other digital assets like Bitcoin or Ethereum, placing orders on order books (limit orders vs market orders), etc.

  The next section focuses on different types of wallets that can be used for storing digital assets securely. This includes hot wallets (online) versus cold storage solutions (offline). The author also discusses security measures that should be taken when dealing with online services such as two-factor authentication.

  Risk management techniques are discussed next which include diversifying one’s portfolio across multiple coins/tokens; setting stop losses; taking profits at certain levels; hedging against volatility through derivatives markets; etc. Tax implications associated with cryptocurrency investments/trades are also covered in this section.

  Finally, the book concludes by providing some tips from experienced traders who have made money from their trades over time. These include having patience while waiting for good opportunities; being aware of news events related to specific coins/tokens; not getting too emotional during trades; learning from mistakes made along the way; etc.

Main ideas:

• #1.     Understand the Basics of Cryptocurrency: Cryptocurrency is a digital asset that is secured by cryptography and can be used as a medium of exchange. It is decentralized, meaning it is not controlled by any government or central authority. Understanding the basics of cryptocurrency is essential for successful investing and trading.
  
  

  Cryptocurrency is a digital asset that has become increasingly popular in recent years. It is secured by cryptography and can be used as a medium of exchange, meaning it can be exchanged for goods or services. Cryptocurrency is decentralized, meaning it is not controlled by any government or central authority. This makes it attractive to many investors and traders who are looking for an alternative to traditional investments.

  Understanding the basics of cryptocurrency is essential for successful investing and trading. Investors need to understand how cryptocurrencies work, what factors affect their value, and how they interact with other financial markets. They also need to know about the different types of cryptocurrencies available, such as Bitcoin, Ethereum, Litecoin, Ripple etc., so they can make informed decisions when selecting which ones to invest in.

  Traders should also familiarize themselves with the various trading platforms available for buying and selling cryptocurrencies. These include exchanges like Coinbase Pro and Binance where users can buy/sell coins directly from each other; brokers like eToro where users trade CFDs (contracts-for-difference); over-the-counter (OTC) desks where large orders are filled without going through an exchange; decentralized exchanges (DEXs) which allow peer-to-peer trades on blockchain networks; automated market makers (AMMs) which use algorithms instead of humans to match buyers/sellers; and more.

  Finally, investors should stay up-to-date on news related to cryptocurrency regulations around the world since these could have a major impact on prices. By understanding all these aspects of cryptocurrency investing/trading one will be better equipped to make profitable decisions when dealing with this new asset class.

• #2.     Research the Different Types of Cryptocurrency: There are many different types of cryptocurrency, each with its own unique features and characteristics. It is important to research the different types of cryptocurrency to determine which ones are best suited for your investment goals.
  
  

  When researching the different types of cryptocurrency, it is important to consider factors such as market capitalization, liquidity, and volatility. Market capitalization refers to the total value of all coins in circulation. Liquidity measures how easily a coin can be bought or sold on an exchange. Volatility measures how much a coin’s price fluctuates over time.

  It is also important to research the technology behind each type of cryptocurrency. Different cryptocurrencies use different technologies for their underlying infrastructure and consensus mechanisms. For example, Bitcoin uses a proof-of-work system while Ethereum uses a proof-of-stake system.

  Finally, it is important to understand the risks associated with investing in any type of cryptocurrency. Cryptocurrencies are highly volatile investments that can result in significant losses if not managed properly.

• #3.     Develop a Trading Strategy: Developing a trading strategy is essential for successful investing and trading in cryptocurrency. It is important to understand the different types of trading strategies and how they can be used to maximize profits.
  
  

  A trading strategy is a set of rules and guidelines that traders use to determine when to buy, sell, or hold cryptocurrency. It can be based on technical analysis, fundamental analysis, or a combination of both. Technical analysis involves analyzing the price movements of cryptocurrencies over time in order to identify patterns and trends that may indicate future price movements. Fundamental analysis looks at factors such as news events, economic data releases, company announcements and other information related to the underlying asset.

  When developing a trading strategy it is important to consider risk management techniques such as stop-loss orders and position sizing. Stop-loss orders are used to limit losses if the market moves against you while position sizing helps ensure that your trades are not too large relative to your account size. Additionally, it is important for traders to understand how different types of strategies work in different market conditions so they can adjust their approach accordingly.

  Finally, it is essential for traders to backtest their strategies before implementing them live in order to assess whether they will be successful over time. Backtesting allows traders to simulate real-world scenarios using historical data so they can evaluate how well their strategies would have performed under certain conditions.

• #4.     Utilize Technical Analysis: Technical analysis is a method of analyzing price movements and trends in order to make informed trading decisions. Utilizing technical analysis can help investors identify potential trading opportunities and maximize profits.
  
  

  Technical analysis is a powerful tool for investors looking to maximize their profits in the cryptocurrency market. By utilizing technical analysis, investors can identify potential trading opportunities and make informed decisions about when to buy or sell. Technical analysis involves studying price movements and trends over time in order to gain insight into future price action. This type of analysis can be used to identify support and resistance levels, as well as chart patterns that may indicate an upcoming trend reversal.

  In addition to identifying potential trading opportunities, technical analysis can also help investors determine appropriate entry and exit points for trades. By analyzing historical data such as volume, open interest, moving averages, oscillators, momentum indicators and other technical indicators, traders can better understand how prices are likely to move in the future. With this knowledge at hand they can then decide when it is best to enter or exit a trade.

  By combining fundamental research with technical analysis techniques such as these, investors have the opportunity to increase their chances of success in the cryptocurrency markets. Utilizing both types of analyses together will allow them to make more informed decisions about which coins they should invest in and when they should enter or exit positions.

• #5.     Understand the Risks Involved: Investing and trading in cryptocurrency is risky and it is important to understand the risks involved. It is important to understand the potential risks and rewards associated with investing and trading in cryptocurrency.
  
  

  Investing and trading in cryptocurrency is a high-risk endeavor. It is important to understand the potential risks associated with investing and trading in cryptocurrency before taking any action. The most common risk associated with investing and trading in cryptocurrency is market volatility, which can lead to significant losses if not managed properly. Additionally, there are other risks such as security threats, regulatory uncertainty, liquidity issues, and more that should be taken into consideration when making decisions about investing or trading in cryptocurrency.

  It is also important to understand the rewards of investing or trading in cryptocurrency. Cryptocurrency has seen tremendous growth over the past few years due to its decentralized nature and potential for long-term gains. Investing or trading in cryptocurrencies can provide investors with an opportunity to diversify their portfolios while potentially earning returns on their investments.

  In order to make informed decisions about investing or trading in cryptocurrencies it is essential that investors take time to research the different types of coins available as well as familiarize themselves with how exchanges work. Additionally, understanding the various strategies used by traders will help investors better manage their own investments.

• #6.     Diversify Your Portfolio: Diversifying your portfolio is essential for successful investing and trading in cryptocurrency. It is important to diversify your portfolio by investing in different types of cryptocurrency and different types of trading strategies.
  
  

  Diversifying your portfolio is an important part of successful investing and trading in cryptocurrency. By diversifying, you can spread out the risk associated with any one particular asset or strategy. This means that if one investment fails, it wont have a major impact on your overall portfolio.

  When diversifying your portfolio, its important to invest in different types of cryptocurrencies as well as different types of trading strategies. For example, you could invest in both long-term investments such as Bitcoin and Ethereum, as well as short-term trades such as day trading or swing trading. You should also consider investing in altcoins (alternative coins) which are smaller market cap coins that may offer higher returns but come with more risk.

  Its also important to remember that no matter how diverse your portfolio is, there will always be some level of risk involved when investing in cryptocurrency. Therefore its essential to do thorough research before making any decisions about where to allocate funds.

• #7.     Utilize Stop Losses: Stop losses are an important tool for managing risk when investing and trading in cryptocurrency. Utilizing stop losses can help investors limit their losses and maximize their profits.
  
  

  Stop losses are an important tool for managing risk when investing and trading in cryptocurrency. By setting a stop loss, investors can limit their potential losses if the market moves against them. This is especially useful for traders who are looking to take advantage of short-term price movements or those who want to protect themselves from large swings in the market.

  When setting a stop loss, it’s important to consider both your entry point and exit point. Your entry point should be based on your analysis of the current market conditions and your exit point should be set at a level that you feel comfortable with losing up to if the trade goes against you. It’s also important to remember that stop losses don’t guarantee profits; they simply help limit potential losses.

  Utilizing stop losses can help investors minimize their risks while still allowing them to capitalize on profitable opportunities in the cryptocurrency markets. Stop losses provide an additional layer of protection by helping investors stay disciplined and focused on their long-term goals rather than getting caught up in short-term fluctuations.

• #8.     Understand the Tax Implications: It is important to understand the tax implications of investing and trading in cryptocurrency. It is important to understand the different types of taxes that may be applicable to cryptocurrency investments and trading.
  
  

  Understanding the tax implications of investing and trading in cryptocurrency is essential for any investor. Cryptocurrency investments are subject to different types of taxes, depending on the type of investment or trade being made. For example, capital gains taxes may be applicable when selling a cryptocurrency asset for more than its purchase price. Similarly, income taxes may be due if you receive payments in cryptocurrency as part of your business activities.

  It is important to understand how these various types of taxes apply to your specific situation so that you can make informed decisions about your investments and trades. Additionally, it is important to keep accurate records and track all transactions related to cryptocurrencies so that you can accurately report them on your tax returns.

  Finally, it is also important to stay up-to-date with changes in taxation laws regarding cryptocurrencies as they evolve over time. This will help ensure that you remain compliant with all relevant regulations while still taking advantage of potential opportunities presented by investing and trading in this new asset class.

• #9.     Utilize Leverage: Leverage is a powerful tool for maximizing profits when investing and trading in cryptocurrency. Utilizing leverage can help investors increase their profits while also increasing their risk.
  
  

  Leverage is a powerful tool for maximizing profits when investing and trading in cryptocurrency. By utilizing leverage, investors can increase their potential returns while also increasing their risk. Leverage allows traders to open larger positions than they would be able to without it, allowing them to take advantage of even small price movements in the market. This means that if an investor believes that the price of a certain cryptocurrency will go up, they can use leverage to increase their position size and thus maximize their profits.

  However, leveraging also increases risk as well as reward. If an investor’s prediction turns out wrong and the price moves against them instead of in favor of them, then they could end up losing more money than what was initially invested due to the increased position size from leveraging. Therefore, it is important for investors who are considering using leverage when trading cryptocurrencies to understand both its benefits and risks before making any decisions.

• #10.     Utilize Automated Trading: Automated trading is a powerful tool for investors and traders who want to maximize their profits. Utilizing automated trading can help investors and traders take advantage of market opportunities without having to manually monitor the markets.
  
  

  Automated trading is a powerful tool for investors and traders who want to maximize their profits. By utilizing automated trading, investors and traders can take advantage of market opportunities without having to manually monitor the markets. Automated trading systems are designed to identify profitable trades in real-time, allowing users to capitalize on these opportunities quickly and efficiently. These systems also provide an additional layer of security by reducing the risk associated with manual trading.

  In addition, automated trading allows users to set up rules that will automatically execute trades when certain conditions are met. This eliminates the need for constant monitoring of the markets as well as reduces potential losses due to human error or emotional decisions. Furthermore, automated trading can be used in conjunction with other strategies such as technical analysis or fundamental analysis which can help increase profitability.

  Overall, automated trading is a great way for investors and traders alike to maximize their profits while minimizing risks associated with manual investing and trading. With its ability to identify profitable trades quickly and accurately, it provides an invaluable tool for those looking to make money from cryptocurrency investments.

• #11.     Utilize Trading Bots: Trading bots are automated programs that can be used to trade cryptocurrency. Utilizing trading bots can help investors and traders take advantage of market opportunities without having to manually monitor the markets.
  
  

  Trading bots are a great way to take advantage of the cryptocurrency markets without having to manually monitor them. They can be programmed with specific trading strategies and rules, allowing investors and traders to capitalize on market opportunities quickly and efficiently. Trading bots can also help reduce risk by automatically executing trades when certain conditions are met, such as price movements or technical indicators. Additionally, they can be used for arbitrage trading, which involves taking advantage of price discrepancies between different exchanges.

  Using trading bots is not without its risks though; if the bot is not properly configured it could lead to losses instead of profits. It’s important that users understand how their chosen bot works before using it in order to maximize their chances of success. Additionally, users should always keep an eye on their investments even when using a trading bot as markets can change rapidly.

• #12.     Utilize Trading Signals: Trading signals are indicators that can be used to identify potential trading opportunities. Utilizing trading signals can help investors and traders take advantage of market opportunities without having to manually monitor the markets.
  
  

  Trading signals can be used to identify potential trading opportunities in the cryptocurrency markets. By utilizing these signals, investors and traders can take advantage of market movements without having to manually monitor the markets. Trading signals are generated by analyzing price action, volume data, technical indicators, and other factors that may indicate a change in market direction or sentiment. These signals can provide insight into when it is best to enter or exit a trade.

  In addition to providing an indication of when it is best to enter or exit a trade, trading signals also help investors and traders manage their risk exposure. By using stop-loss orders and limit orders based on the signal’s analysis, investors and traders can protect themselves from large losses if the market moves against them. Furthermore, they can use trailing stops which will automatically adjust their position as the market moves in order to lock in profits.

  Utilizing trading signals is an effective way for investors and traders to gain an edge over other participants in the cryptocurrency markets. With careful analysis of these signals combined with sound money management techniques such as setting stop-losses and taking profits at predetermined levels, investors and traders have greater control over their investments while still being able to capitalize on profitable opportunities.

• #13.     Utilize Margin Trading: Margin trading is a powerful tool for maximizing profits when investing and trading in cryptocurrency. Utilizing margin trading can help investors increase their profits while also increasing their risk.
  
  

  Margin trading is a powerful tool for investors and traders looking to maximize their profits in the cryptocurrency market. By utilizing margin trading, investors can increase their potential returns while also increasing their risk. Margin trading allows an investor to borrow money from a broker or exchange in order to purchase more of an asset than they would be able to with just the funds available in their account. This leverage can help amplify gains when prices move favorably, but it also increases losses if prices move against them.

  When using margin trading, it’s important for investors to understand how much leverage they are taking on and what kind of risks that entails. Investors should always have a plan for managing any losses that may occur due to unfavorable price movements and ensure that they do not exceed the amount of capital available in their account. Additionally, investors should consider setting stop-loss orders which will automatically close out positions at predetermined levels if prices move against them.

  By understanding how margin trading works and properly managing risk associated with it, investors can use this powerful tool as part of their overall strategy for investing and trading cryptocurrencies.

• #14.     Utilize Arbitrage: Arbitrage is a powerful tool for maximizing profits when investing and trading in cryptocurrency. Utilizing arbitrage can help investors take advantage of price discrepancies between different exchanges.
  
  

  Arbitrage is a powerful tool for investors to maximize their profits when trading and investing in cryptocurrency. By utilizing arbitrage, investors can take advantage of price discrepancies between different exchanges. This means that they can buy low on one exchange and sell high on another, thus profiting from the difference in prices.

  For example, if Bitcoin is priced at $10,000 on Exchange A but only $9,500 on Exchange B then an investor could purchase Bitcoin from Exchange B and immediately sell it for a profit of $500 on Exchange A. This type of arbitrage opportunity may not last long as prices tend to fluctuate quickly so it’s important to act fast when taking advantage of these opportunities.

  In addition to taking advantage of price discrepancies between exchanges, investors can also use arbitrage strategies such as triangular or conversion arbitrage which involve buying and selling multiple cryptocurrencies across multiple exchanges simultaneously. These types of strategies require more advanced knowledge but can be very profitable if done correctly.

• #15.     Utilize Hedging: Hedging is a powerful tool for managing risk when investing and trading in cryptocurrency. Utilizing hedging can help investors limit their losses and maximize their profits.
  
  

  Hedging is a risk management strategy that can be used to protect investors from losses in the cryptocurrency market. By using hedging, investors can limit their downside exposure and maximize their potential profits. Hedging involves taking an offsetting position in another asset or currency to reduce the risk of loss on an existing investment.

  For example, if you have invested in Bitcoin and are worried about its price dropping, you could hedge your position by buying Ethereum as well. If Bitcoin’s price drops, then Ethereum’s price may rise and help offset any losses incurred from the drop in Bitcoin’s value. This way, you will still make some profit even if Bitcoin’s value decreases.

  Another way to use hedging is through derivatives such as futures contracts or options. These instruments allow traders to speculate on future prices without actually owning the underlying asset. For instance, a trader could buy a call option on Bitcoin with a strike price of $10k which gives them the right (but not obligation) to purchase one BTC at $10k before expiration date.

  By utilizing hedging strategies like these, investors can minimize their risks while still having opportunities for gains when trading cryptocurrencies. It is important for all crypto traders and investors to understand how hedging works so they can properly manage their investments and take advantage of market movements.

• #16.     Utilize Options Trading: Options trading is a powerful tool for maximizing profits when investing and trading in cryptocurrency. Utilizing options trading can help investors take advantage of market opportunities without having to manually monitor the markets.
  
  

  Options trading is a powerful tool for investors looking to maximize their profits when investing and trading in cryptocurrency. By utilizing options, investors can take advantage of market opportunities without having to manually monitor the markets. Options allow traders to buy or sell an asset at a predetermined price on or before a certain date. This allows them to hedge against potential losses while still taking advantage of any potential gains.

  When using options, it’s important for traders to understand the different types available and how they work. There are two main types: calls and puts. Calls give buyers the right but not the obligation to purchase an asset at a specific price within a certain time frame, while puts give sellers the right but not the obligation to sell an asset at a specific price within a certain time frame.

  Traders should also be aware of other factors such as expiration dates, strike prices, premiums paid/received, margin requirements and more when considering options trades. It’s important that traders have knowledge about these topics before entering into any option trades so that they can make informed decisions.

  Options trading is one way for investors looking to maximize their profits when investing in cryptocurrency. With careful consideration and understanding of all aspects involved with this type of trade, it can be used effectively by those who know what they are doing.

• #17.     Utilize Futures Trading: Futures trading is a powerful tool for maximizing profits when investing and trading in cryptocurrency. Utilizing futures trading can help investors take advantage of market opportunities without having to manually monitor the markets.
  
  

  Futures trading is a powerful tool for investors looking to maximize their profits when investing and trading in cryptocurrency. By utilizing futures contracts, investors can take advantage of market opportunities without having to manually monitor the markets. Futures contracts allow traders to buy or sell an asset at a predetermined price on a future date, allowing them to lock in profits before the market moves against them. This type of trading also allows traders to hedge their positions by taking both long and short positions simultaneously.

  In addition, futures trading provides leverage which enables traders to increase their potential returns with less capital outlay than traditional spot trades. Leverage can be used strategically as it magnifies gains but also increases losses if not managed properly. Therefore, it is important that investors understand how leverage works and use it responsibly.

  Finally, futures trading offers greater liquidity compared to other types of investments such as stocks or bonds due its 24-hour nature and global reach. This means that there are always buyers and sellers available in the market regardless of time zone or location.

• #18.     Utilize Short Selling: Short selling is a powerful tool for maximizing profits when investing and trading in cryptocurrency. Utilizing short selling can help investors take advantage of market opportunities without having to manually monitor the markets.
  
  

  Short selling is a powerful tool for investors to maximize their profits when trading in cryptocurrency. By utilizing short selling, investors can take advantage of market opportunities without having to manually monitor the markets. Short selling involves borrowing an asset from a broker and then immediately selling it on the open market at its current price. If the price of that asset drops, you can buy back the same amount of assets at a lower price and return them to your broker, thus making a profit.

  The key benefit of short selling is that it allows traders to make money even if prices are falling. This means that traders can capitalize on bearish trends by taking advantage of downward movements in prices while still protecting themselves against potential losses due to sudden spikes in prices or other unforeseen events.

  In addition, short sellers have more flexibility than traditional long-term investors because they don’t need to wait for extended periods before realizing gains from their investments. They also don’t need as much capital upfront since they only borrow assets instead of buying them outright.

  However, there are some risks associated with short selling such as margin calls and counterparty risk which should be taken into consideration before engaging in this type of trading strategy. Additionally, it is important for traders to understand how different exchanges handle fees related to borrowing assets so they know what costs will be incurred when entering into these types of trades.

• #19.     Utilize ICOs: Initial Coin Offerings (ICOs) are a powerful tool for raising capital when investing and trading in cryptocurrency. Utilizing ICOs can help investors take advantage of market opportunities without having to manually monitor the markets.
  
  

  Initial Coin Offerings (ICOs) are a powerful tool for raising capital when investing and trading in cryptocurrency. Utilizing ICOs can help investors take advantage of market opportunities without having to manually monitor the markets. By participating in an ICO, investors can purchase tokens that represent a stake in the company or project being funded by the offering. These tokens may then be traded on exchanges, allowing investors to benefit from price movements as well as any dividends or other benefits associated with holding them.

  In addition to providing access to potential profits, ICOs also offer diversification benefits. By investing in multiple projects at once, investors can spread their risk across different sectors and industries while still taking advantage of potentially lucrative returns.

  Finally, utilizing ICOs allows investors to get involved early on in projects they believe have potential for success. This gives them an opportunity to capitalize on growth before it is widely recognized by other traders and speculators.

• #20.     Utilize Security Tokens: Security tokens are a powerful tool for raising capital when investing and trading in cryptocurrency. Utilizing security tokens can help investors take advantage of market opportunities without having to manually monitor the markets.
  
  

  Security tokens are a powerful tool for raising capital when investing and trading in cryptocurrency. By utilizing security tokens, investors can take advantage of market opportunities without having to manually monitor the markets. Security tokens represent ownership of an asset or company, such as stocks, bonds, real estate investments, and other financial instruments. They provide investors with access to liquidity through secondary markets where they can buy and sell their holdings.

  Security tokens also offer greater transparency than traditional securities because all transactions are recorded on the blockchain ledger. This allows investors to track their investments more easily and accurately while providing them with additional security against fraud or manipulation. Additionally, security token offerings (STOs) allow companies to raise funds quickly by issuing digital assets that are backed by tangible assets.

  Utilizing security tokens is a great way for investors to diversify their portfolios while taking advantage of new investment opportunities in the cryptocurrency space. With increased transparency and liquidity provided by these digital assets, it’s no wonder why many people have turned towards this form of fundraising.