Today we look at a way to use the bitcoin you’ve collected from a number of free bitcoin faucets from around the web. Alternatively you can buy bitcoin if you have some extra cash, but either way you’ll need some if you want to play on a Digital Currency Exchange.
I’ll use an exchange called Cryptsy but there are a number of other exchanges that buy and sell bitcoin. However, today’s focus is on the money you can make trading alternate digital currencies.
Yes, bitcoin is not the only digital currency out there, and each alternate digital currency has their own communities working away to make their digital currency as popular as bitcoin. The potential is huge.
Let’s take a look at the video and see how to make easy money on a digital currency exchange…
OK, if you’ve been following this blog series and already learnt about bitcoin then hopefully this made sense to you. However, if you haven’t then I’d suggest reading the previous post as an introduction to bitcoin. How to Get Free Money from a Bitcoin Faucet
How to Get Bitcoin
Well as I previously explained you can collect it for free but if you don’t have the time you can purchase it directly from an exchange.
Here is a couple of places where you can sign-up and trade your $USD for bitcoin
Alternatively you can turn up to a bitcoin meetup and buy bitcoin directly from someone there, just ask around and someone will help you out. If you are looking for a bitcoin meetup then search for them here:- http://bitcoin.meetup.com/
But either way you choose you’ll need to have bitcoin before you can trade in alternate digital currencies.
How to Make Easy Money on a Digital Currency Exchange
So in the video I used a website called Cryptsy because they’ve been around for a while and trade many different types of digital currencies. They also do $USD to BTC trades so should cover most of your needs.
A digital currency exchange works on the same principles as a traditional stock market, in that you have buyers and sellers and the demand for a particular alternate currency determines the price.
When the demand goes up, so does the price and similarly when the demand goes down the price heads south.
You don’t really need to fully understand what makes each alternate digital currency special, but it does help to know what the community is up to. Most altcoins as they’re called, use a forum to discuss new developments and record general community involvement.
You’ll find most altcoin information on this forum – https://bitcointalk.org/index.php?board=67.0
Just do a search for the altcoin you are most interested trading in.
Once you get setup and have bitcoin (BTC) to trade then check out the home screen to see which coin has the most activity. When there are plenty of buyers and sellers in the market you’ll see the price fluctuate and this is where you can make the most gains.
High Risk = High Reward
Obviously you’ll want to read the trend lines to see if the value of the altcoin is going up or down. Switching to a weekly or monthly view will help you see what’s really happening with each altcoin.
The aim is to buy low and sell for a moderate profit when it peaks. In the diagram, buying around 80 satoshis and selling over 90 satoshis is a nice 10% profit over a few days.
#1 – Don’t spend what you can’t loose – As with all investments you shouldn’t trade with more money than you have. Just try playing around with $10 worth of BTC until you fully understand the cycles and trends.
#2 – Sell towards the end of a week – If you watch the trends of most altcoins you’ll see they dip at the end of the week. This is because some traders don’t like leaving their money in the exchange while they’re taking the weekend off. Consequently, you’ll usually see a dip at the end of the week. If you want to sell your altcoins then, Thursday and Friday could be your best days.
#3 – Buy on the weekend – Usually after the day traders have exited for the weekend, the price dips until the new week starts again. Buying when the price is low over a weekend is one way to make easy money.
#4 – Do your research – Plenty of daily activities happen in the Alternate Digital Currency world, so be sure to do your research on the altcoins you want to trade to make sure your investment is sound.
#5 – Don’t get greedy – As you’ll see in the video I’m only looking for small 10% gains which isn’t a lot, but if you are able to do this on a daily basis then it soon compounds.
NB: These tips are not given as investment advice but rather act as a trading guide, and you should seek proper advice from a financial advisor if you intend trading large amounts of money.
This was only intended to be an introduction to Digital Currency Exchanges to make you aware they exist and the potential opportunities for making easy money. The low trading volumes make for a volatile environment so it’s as easy to lose money as it is to make money. Fo further information of Digital Currency Trading head over to Google and start searching.
Making small gains on a Digital Currency Exchange can be fun and beats clicking on ads to make a living. The volatility will either work for you or against you so proceed with caution. Try playing around with a small amount of BTC until you fully understand how it works. This money making idea won’t be for everyone, but will certainly pique the interest of people who already trade on traditional stock markets.
Earning Potential: 5-MONEYBAGS
Time Required: 30+ mins