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Crypto Moms => General Discussion => Guides => Topic started by: wiser on May 08, 2015, 05:40:56 AM

Title: Trading platforms: your key to all other cryptocoins
Post by: wiser on May 08, 2015, 05:40:56 AM
If you want to get into cryptocoins besides Bitcoin (and I really hope you do), trading platforms are going to become your friend. A trading platform is a market where buyers and sellers of a particular asset can meet to make a trade. You don't actually meet the person on the other side of your trade; you just know when your trade has executed.

There are literally hundreds of trading platforms in the cryptosphere. Some of them, like Coinbase, focus on trading fiat currencies such as US Dollars into Bitcoin and vice versa. Others trade Bitcoin into and out of other cryptocoins, known collectively as altcoins. A few of the major altcoins such as Litecoin and Dogecoin also trade directly with fiat on many of these platforms.

You want to register an account on at least one of these major trading platforms or exchanges: Cryptsy (, AllCoin (, Poloniex (, or BitTrex ( This list is by no means exhaustive. These trading platforms are known to be reputable and are a great place to begin.

Each platform will have a different look and feel, but they all do the same thing: trade Bitcoin for any of up to several hundred available altcoins. The actual list of available altcoins varies from trading platform to trading platform. When an altcoin gains traction it will trade on many exchanges. When an altcoin is brand new, it might only trade on one or two exchanges. In general, you register an account on the trading platform that carries the coin you want to trade. For the purposes of this tutorial I'm going to be using examples and screen shots from Poloniex. Once you get comfortable trading on one platform, you will have no problem trading on others as well.

Step one: Locate your wallets
Once you have registered your account, find the tab that says "wallets" or "balances" or similar. You are looking for the page which lists all your personal wallet addresses for each coin that trades on the exchange.


You will notice in the above screen shot that on Poloniex, all the altcoins are listed alphabetically. If you were wanting to trade XEM, you would have to scroll down pretty far down the list. You will also notice that you have to generate an address for each coin you are interested in first. Simply click on the [generate address] button. Poloniex allows you to hide information on coins with zero balance. A trick I sometimes use to keep my favorite altcoins at the top is to make sure that each wallet address always has a small amount of coin (is never zero) and then I hide all the coins I'm not interested in (and which carry a balance of zero).

Generate an address for your Bitcoin wallet. Then carefully copy that address, making sure you grabbed the entire string of letters and numbers. Then from your Bitcoin wallet, send some Bitcoin to the trading platform address you just copied. It may take up to an hour for the deposit to be available, but usually you should see it as a pending transaction within minutes of sending it.

Make your first trade
Once your Bitcoin deposit is available, it's time to spend it on the altcoin you intend to buy. For the purposes of this tutorial it's going to be DNotes.

Click on the tab that says "Exchange" or "Market" or similar. Poloniex automatically brings you to the last market you looked at, but you will have to find it the first time. Fortunately there is a search box so you don't have to scroll through two hundred different currency pairs. Enter "NOTE" in the search box, then click on "NOTE" in the markets box and it will come right up.


The picture above gives you all kinds of information about what's going on with the DNotes/BTC market. The chart is a simple plot which follows the DNotes price (in terms of Bitcoin) over a given period of time. You can quickly see if the DNotes price is trending upwards or downwards. Poloniex allows you to select from several time periods ranging from the last six hours to the entire time DNotes has traded there. The numbers on the top right of the chart tell you the last price, the high and low price over the last twenty-four hours and the volume.

Scroll down to just below the chart and you will find the buy and sell forms and the market depth tables.


To buy DNotes, complete the buy form. If you want to use your entire Bitcoin balance you can click on it to populate the form. The market buy price is filled in for you, but you can change it if you want. To sell DNotes you would complete the sell form in the same way. The Stop-Limit form in the middle is an advanced trading feature that you can ignore for the time being. Below the buy and sell forms are the market depth tables, also known as the orderbook. These are all the buy and sell orders that others have placed.

There are two main approaches you can take to buying DNotes. The most immediate one is to buy at the market price, which is going to be the price at the top of the sell market depth table. This is the cheapest price you will pay to buy DNotes right now. In the screen shot that price is 0.00004724 BTC. It's like walking into a store, picking an item off the shelf and paying full price for it. I recommend placing your first buy order at market rate using a small amount of Bitcoin just to get some experience with how it works.

The other approach is where you name your price. You complete the buy form as before, only instead of going with the default market price, you put in a lower price. This time when you click on the [Buy] button, it will add your order to the depth table. Then you have to wait until someone decides your price is a good price to sell at. This will only happen once all DNotes going for higher prices have been sold. In the above screen shot, you can see a buy order I placed several hours ago for 380.529... DNotes at 0.00004701 BTC. Since healthy markets tend to jump around a lot (as indicated by the red and green "candlesticks" on the visual chart above the buy and sell forms, it's likely a buy order that's lower than market rate will be fulfilled within a day or two as long as it's not too far below market price. If you have the patience to wait it out, you will be able to buy more DNotes by naming your price than you would buying at market rate. Once you've placed your buy order, the best thing to do is to log out of your account and then go do something else until the next day. You can see the buy order I've placed in the open orders table, just above the trade history table.


The trade history table tells you the price people have paid to buy DNotes or received from selling DNotes. It can tell you at a glance if more people are buying or selling in the most recent trades. The trade history is what gets plotted on the market chart. In the trade history table you get a snapshot of what's happening in real time.

Once your order fills--this will be immediate if you bought at the market rate, or sometime later if you placed a below market buy order--the DNotes will be added to your DNotes wallet. You can then withdraw them to a DNotes address of your choice. Trading platform withdraw features pretty much all work the same way across the board. You complete the withdraw form. If you want to withdraw your entire balance you can click on it and it will populate to the form. Be sure you copy/paste the destination address correctly. Once you submit the withdraw request you might be sent a confirmation email. You will have to open that email and click on the link to confirm the request.

Where trading platforms fit into the big picture
If you are following some advice I've seen on this forum which is to give up your cup of specialty coffee (or equivalent) once or twice a week and instead put the five dollars or so towards buying DNotes, the path you will take will go something like this:

1. You drive by the Starbucks (instead of stopping in) on your way to work.
2. You log into your
Coinbase ( account and buy five dollars worth of Bitcoin.
3. Once your Bitcoin is available, you send (withdraw) your Bitcoin to your trading platform Bitcoin wallet address.
4. You place a DNotes buy order.
5. The buy order fills, and instead of Bitcoin you now have DNotes in your trading platform account.
6. You withdraw the DNotes from your trading platform wallet to your DNotes vault wallet for safekeeping. You think about how much one day you'll be glad you gave up your morning coffee for this :)

In the path from fiat to DNotes (or whichever altcoin you want to get into) you have to make two currency exchanges. The first one is from US Dollars (or other national currency) to Bitcoin. This trade happens at Coinbase. The second exchange is from Bitcoin to DNotes. That trade happens on the trading platform, which we focused on in this guide. It may seem complicated at first. Who knew that you'd be trading currencies twice in one day without ever leaving the country? But if you just take the time to learn the steps and follow them a few times, it truly becomes second nature and doesn't seem so complicated any more. Start with small amounts of money (such as the price of one cup of coffee) and stick with small amounts until you are very comfortable with the process. Then you can work your way up to larger amounts. Regardless of the amounts you trade, all the standard investment advice such as do your homework and only invest what you can afford to lose applies.

Found this tutorial helpful? Tip my DNotes vault: DoQA9sja4vzPwV2MtuNweCh1miw5qHF2xc
Title: Re: Trading platforms: your key to all other cryptocoins
Post by: indiamikezulu on May 16, 2015, 12:31:33 AM
Tee hee . . .

my 'blog' over at the Crypto Kindergarten wanders over a range of stuff -- but we're doing Trading 101 at this second. Feel free to drop in there.

Mark (IndiaMikeZulu), Australia