6 Simple Steps + 1 to Start Cryptocurrency Trading Right Now (Episode 15) - Crypto Beginner: Starting Virtual Currency Trading from Zero - Navi+ - GogoJungle | Auto Trading - Market Analysis

This is a basic summary of "Starting from Zero: Cryptocurrency Trading."

Now, the basic flow for cryptocurrency trading…

Open accounts with domestic exchanges and, if necessary, major overseas exchanges, and summarize the concrete steps for purchasing and transferring cryptocurrency, trading, and participating in ICOs (Initial Coin Offerings in the crypto world).

This page is a little long, but it includes image explanations, so by reading this you should roughly understand the basic buy/sell procedures.

Table of Contents
1. Open an account at a domestic exchange!
2. Try buying Bitcoin on a domestic exchange!
3. Try trading cryptocurrencies on a domestic exchange!
4. Open an account at the world's largest exchange, Poloniex!
5. Try sending Bitcoin to Poloniex!
6. Try buying/selling cryptocurrency on Poloniex!
Bonus: Participate in ICOs!

1. Open an account at a domestic exchange!

First, open an account at a domestic exchange and prepare to purchase cryptocurrency by depositing Japanese Yen.

We will introduce three representative exchanges.

bitFlyer（BitFlyer）
The administration screen is very easy to use, and there are various Bitcoin (BTC) usage and earning programs through integration with other industries. There is also a Quick Deposit service that allows deposits on weekends.
Although there are restrictions, you can start with an economy class that only requires mobile phone verification or Facebook linkage!

Zaif（Zaif）
Among core crypto traders, it is one of the most popular exchanges.

The available currency pairs are not only BTC, but also many others like XEM, XCP, BCY, SJCX, MONA, and more. It supports coin stacking services and credit card payments. You can purchase coins in as little as 5 minutes from free registration.

This exchange has a strong relationship with NEM (XEM), which is gaining attention domestically and internationally after Bitcoin and Ethereum.

Coincheck（コインチェック）
The simple features are very user-friendly. Currency pairs include BTC, ETH (Ethereum), LISK, Factom, and more. Purchases with a credit card are also possible。

Two-factor authentication is mandatory!

Two-factor authentication (2FA) adds security by requiring a token (passcode) displayed on your smartphone in addition to your normal login. It can be a bit of a hassle, but to protect your assets you should definitely enable 2FA.

2. Try buying Bitcoin on a domestic exchange!

※ Screen shown is from bitFlyer

Once your Japanese Yen deposit is completed, first try buying Bitcoin.

Besides trading Bitcoin itself, you can use it for trading coins that will be bought and sold on overseas brokers introduced later.

To buy Bitcoin, you can either buy directly from the exchange's sales desk or buy on an exchange that matches buyers and sellers.

If you won't trade for a long time, move to an external wallet

As with any cryptocurrency, if you buy coins and won't trade frequently (such as long-term holdings for years), it's recommended not to leave them on the exchange, but store them in an external wallet that you control.

This helps protect your assets from exchange hacks. For details about wallets, see「The 10th Column」.

3. Try trading cryptocurrencies on a domestic exchange!

※ Screen shown is from Zaif

Besides Bitcoin, other cryptocurrencies like Ethereum (ETH) and NEM (XEM) are now traded on the market.

Some of them can be bought and sold on domestic exchanges, so research what each currency is intended for and, if you find future potential, try trading.

Generally, spot trading is recommended, but some exchanges offer margin trading with leverage.

There are various cryptocurrencies traded worldwide

If the cryptocurrency you want to trade is not available on domestic exchanges or the order book is thin, try a lively overseas broker.

Since you would be transferring Bitcoin bought domestically, you don’t need the troublesome deposits or account openings like FX; you can start quickly. This is a major advantage of cryptocurrency.

4. Open an account at Poloniex, the world's largest exchange!

Poloniex is one of the most comprehensive and high-volume US cryptocurrency exchanges, with an extensive range of trading pairs.

When using overseas brokers for FX, deposits and withdrawals in JPY can be troublesome, but here trades are basically Bitcoin-denominated against other cryptocurrencies, so if you have Bitcoin, you can start trading in minutes—roughly a few minutes to 10 minutes.

Note that all information is in English, so be careful.

First, go tohttps://poloniex.com/.

Click Create your account.

Enter the required information.

For example, if your phone number is 090-1234-5678, enter +819012345678.

Finally, click Create Account.

You will see a message saying, “We've sent a confirmation email, please check it.”

You should receive an email with the subject Confirmation. Click the long URL in it or copy/paste it into your browser to access.

Account setup is complete. Log in with your email address and password.

Logged in successfully! Congratulations.

Check your account type

From the top-right user icon, go to “MY PROFILE.”

Initially, the membership type is “Level1,” and daily withdrawals are limited to2,000 US dollars worth per day.

In Level2, it rises to7,000 US dollars per day. If you register your address and date of birth, the limit is lifted, but residents of Japan are not eligible (as of 2016.8), so apply for Level3 next.

In Level3, the limit rises to25,000 US dollars. You must enter your passport number for SSN/Passport ID and attach a scanned or photographed copy of the passport pages, held in an opened state, to verify identity. A combination of driver's license and its photo has also reportedly passed verification.

If you need a higher withdrawal limit, you should contact them directly.

Setting up two-factor authentication is mandatory

Be sure to do this.

First, install the Google Authenticator app on your smartphone. You can find it by searching for “Google Authenticator” in Google Play or the App Store.

From the wrench icon at the top-right of Poloniex, go to “TWO-FACTOR AUTHENTICATION.”

Under the QR code, you must note and secure the16-digit key. Once set, it will no longer be displayed!

This is a security system using your smartphone, and the 16-digit key is a crucial code you may need to present to Poloniex if you lose your phone for identity verification.

Also, when disabling two-factor authentication (2FA), you will need to input this 16-digit key. After disabling, that key becomes invalid, and a new 16-digit key will be issued when you set it up again.

After entering your password, use Google Authenticator to scan the QR code, enter the displayed code into Code, check “I have backed up my 16-digit key,” and click Enable 2FA to complete the setup.

From the next login on, you will see this after the normal login.

Open Google Authenticator on your smartphone to display a code that updates every 30 seconds; enter it correctly to complete two-factor authentication.

5. Try sending Bitcoin to Poloniex!

Basically, Poloniex uses Bitcoin (BTC) to buy other cryptocurrencies, so first try sending BTC you bought on a domestic exchange to Poloniex.

Go to the top-right and select BALANCES → DEPOSITS & WITHDRAWALS.

From Actions, choose Deposit to display the next screen, then show the Deposit Address.

Send from a domestic exchange or wallet to the shown address. It should arrive in a few minutes to about 10 minutes, but other coins may take longer.

Deposit methods vary by coin. For example, with NEM (XEM), you can attach a custom message when sending; on Poloniex you must enter the code shown in “Your NEM Message” in the message field.

Withdrawals

To withdraw BTC, use Withdraw. Enter the withdrawal address and amount, then click Withdraw. If you have 2FA enabled, you will be asked for a code, and then you will receive a confirmation URL by email to complete the process.

This is how it looks for NEM.

If you’re nervous at first, start with a very small test transfer.Be careful not to send to the wrong address, as it cannot be returned.

GOX risk

Whether domestic or international, if an exchange is hacked by external or internal parties and coins are stolen or the company goes bankrupt, users who entrusted funds can suffer significant losses.

This is called counterparty risk, and is sometimes colloquially referred to as “GOX.”

Understand these risks, be cautious about how much you entrust, and when not trading, keep assets in external wallets as much as possible—protect your assets through personal responsibility and management.

6. Try buying and selling cryptocurrencies on Poloniex!

Now, let's actually do spot trading of cryptocurrencies. Here, we’ll illustrate buying and selling XEM for BTC.

First, go to the top-left and select “EXCHANGE.”

Charts can display technical indicators, but we’ll use only Fibonacci levels, one SMA, two EMAs, and Bollinger Bands; the sub-window will only use MACD… it’s a bit sad.

Search for XEM in the top-right under the “MARKET” tab to narrow quickly. Click XEM to change the chart.

Scroll down, check the order book, and try trading.

What happens to profits from cryptocurrency trading, and taxes?

Some people keep profits in Bitcoin, while others want to convert to Japanese Yen, which is common.

Cryptocurrencies are not currencies, money, foreign currencies, or securities; in 2014 they were described as not other things but as a new category of “value records.” In June of the same year, it was also described as not a currency but a “value record.”

Currently, profits from selling cryptocurrencies like Bitcoin for Japanese Yen are taxed as miscellaneous income (not separate taxation) and are taxed as comprehensive income.

For details, see “Bitcoin and Income Tax,” but future developments should be watched.

Bonus: Participate in ICOs!

ICO is like an IPO in stock markets. It is also called crowd sales or simply token sales.

Projects raise development/operational funds by selling tokens (coins) at a low price before listing.

For example, from late 2016 to early 2017, many ICOs were planned → “ICO approaching storm! A summary of Ethereum-based projects and ICOs planned in the future 12 items.”ICO approaching storm! 12 Ethereum-based projects and ICOs planned”

Whether projects are already well progressed or not, what the future vision is, and what the token issuance cap will be are all factors to consider when deciding to participate with a long-term perspective.

Even if prices are cheap, it does not guarantee that post-listing prices will rise, and there is no guarantee they will rise for sure.

Of course, like Ethereum and NEM, there is a possibility of significant gains from early prices, and there is also a possibility of scams. Be aware.

Some investors wait for post-listing price drops and buy, but there is no certainty that prices will definitely fall.

Discerning opportunities is important (Ethereum was once ridiculed as a scam), but if you incur losses, risk control to minimize pain is more important.

If you’re interested in projects and want to dream bigger, you may participate in ICOs or wait to buy after listing!

Enjoy cryptocurrency trading!

The simple steps to cryptocurrency trading are above.

Whether you trade technically, gather information and decide on coins to invest, or invest with a style that suits you, enjoy a realistic trading approach with careful money management!

New series “It seems the cryptocurrency market is getting serious” offers even deeper crypto trading information, ICO information, and buy/sell signals!

TrendStream
TrendStream, an FX trader and FX information site, operates and develops EAs. In its seventh year of FX in 2016, it began exploring the strong potential of cryptocurrency investments.
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