Year: 2018

What Is Margin and How to Use

Trading on margin can be profitable but also, extremely risky.

By Guy Avtalyon

The simple answer on question what is margin could be: it is a loan from your brokerage to buy more stocks than you otherwise would be able to purchase using the amount of cash you have on hand.

The dictionary defines margin as an extra amount of something (such as time or space) that can be used if needed. Two key things are important to us in that definition: extra and if needed.

It is the difference between the full value of your position and the funds lent to you by a broker or leverage provider. It is an amount of money needed to open a leveraged trading position.

There are two types: initial and maintenance margin. The initial is the deposit required to open the position, often called just the deposit. When you open your position, you might need to add more money if your trade starts to make a loss and your deposit is no longer enough to keep the position open. If this happens, your provider will place you on a margin call, and you’ll be required to top up the funds in your account. This additional capital is known as the maintenance margin.

What is the margin?

It is the deposit necessary to use leveraged products. Using leverage can provide you to get full market exposure by putting up just a fraction of a trade’s full value. The amount of margin ordered will usually be presented as a percentage.

All of the assets in your account, as well as your personal guarantee, are held as assurance that you will repay the debt. There is no matter what happens in the trading account itself. Even if the account blasts, you are obliged to pay. No payment plan. Or negotiating terms. If you don’t pay, the broker can tow you into court. You will start getting verdicts to confiscate your other holdings. Your destiny will depend on the mercy of a bankruptcy judge. Meanwhile, your credit score plummets. Well, not always but it can happen.

What is the margin in Forex?

It is one of the most important concepts of Forex trading. In Forex it is basically a good faith deposit that is needed to maintain open positions. It is not a fee or a transaction cost, but instead, a portion of your account equity set aside and assigned as a margin deposit.

Trading on a margin can influence your trading experience both positively and negatively, with both profits and losses potentially. Your broker takes your deposit and then pools it with someone else’s margin Forex deposits. Brokers do this in order to be able to place trades within the whole interbank network.

It is often expressed as a percentage of the full amount of the chosen position. The most Forex margin requirements are estimated to be around: 2%, 1%, 0.5%, 0.25%. You can calculate the maximum leverage you can use in your trading account.

How does margin work?

In the same way that a bank can lend you money if you have equity in your house, your brokerage firm can lend you money against the value of certain assets in your portfolio. The borrowed money is known as a margin loan. It can be used to purchase additional securities or to meet short-term financial needs.

Each brokerage company can define, within certain guidelines, which stocks, bonds, and mutual funds are marginable. The list usually includes securities traded on the major stock exchanges. Hence, keep in mind that you can not borrow funds in retirement accounts or custodial accounts. Investors can use margin to purchase potentially double the amount of marginable stocks than they could use cash. Few investors borrow to that extreme. The more you borrow, the more risk you’ll take on. Margin uses the value of your marginable securities as collateral in your portfolio. If your portfolio goes up, your buying power increases. If your portfolio falls in value, your buying power decreases.

Which securities can trade?

Almost every security can be traded on margin. It may be stocks, futures, commodities, or currency. For the cash market, generally, brokers provide and charge nominal interest for the same. While for the Futures market, the exchange provides the margin and there is no interest charged. Every broker has a different margin policy.

Short-term stock traders often use it in the hope of improving their stock market returns. But, it is usually avoided by long-term investors as over an extended period, a greater return would be necessary just to break even.

Traders often target stocks with more volatile price swings. As they focus on shorter time spans than investors, short-term traders need to use margin to magnify the size of those price swings to try and make a profit.

Trading is risky

Frankly speaking, when someone asks what is margin, the first thought is – it is the risk. Because it can be a dangerous beast. Of course, it can’t ever turn a bad investment good, but it can turn a good investment bad. Simply piling margin onto an investment with a small return doesn’t transform it into a good idea. It has a darker side from a value perspective as well: it has the potential to turn a good investment into a bad one! It can limit your staying power and transform a temporary impairment into a permanent impairment of capital.

A margin loan can be used to meet short-term lending needs not related to investing. Moreover, margin can also be used for investment purposes to magnify your profits as well as your losses.

This strategy can be profitable when your stocks are going up. But, the increasing effect works the other way as well. Buying stock on margin is only successful if your stocks increase enough to pay back the loan with interest. Contrary, you could lose your major capital if your stocks go down too much. However, used wisely and prudently, a margin loan can be a valuable tool in the right circumstances. If you decide it is right for your investing strategy, consider starting slow and learning by experience.

13th November 2018
Stock Options Everything You Need to Know

The stock options give the holder the right, but not the obligation, to buy (or sell) 100 shares on or before the options expiration date.

By Guy Avtalyon

Stock options are financial instruments. That can provide the investor with the flexibility need in almost any investment situation.

Stock options are contracts that convey to its holder the right, but not the obligation, to buy or sell shares of the underlying security at a specified price on or before a given date. After this specified date, the option stops to exist. The seller of an option is, in turn, obligated to sell (or buy) the shares to the buyer of the option at the specified price upon the buyer’s request.

The stock options give the holder the right, but not the obligation, to purchase (or sell) 100 shares of a particular underlying stock at a specified strike price on or before the option’s expiration date. The seller of the option is one who grants this right.

You can recognize two kinds of stock options: American and European. American options are different from European options. The European options permit the holder to exercise the option only on the date of expiry.

How do stock options work?

All options are derivative instruments. That means that their prices are derived from the price of another security. More precisely, the underlying stock price will determine the options price, it is derived from the stock price.

As an example, let’s say you purchase a call option on shares of Intel (Nasdaq: INTC) with a strike price of $40 and an expiration date of April 16. This option gives you the right to purchase 100 shares of Intel at a price of $40 on or before April 16th. Of course, the right to do this will only be valuable if Intel is trading above $40 per share at that point in time.

Every stock option represents a contract between a buyer and a seller. The seller has the obligation to either buy or sell stock to the buyer. Of course, at a specified price by a specified date. The buyer, on the other hand, has the right but not the obligation, to execute the transaction. On or before a specified date. If it isn’t in the best interest of the buyer to exercise the option when it expires, the buyer has no further obligations. The buyer has bought the option to execute a transaction in the future. Hence the name – option.

What is underlying security?

The particular stock on which an option contract is based is usually known as the underlying security. Stock options are categorized as derivative securities because their value is derived in part from the value and characteristics of the underlying security. A stock option contract’s unit of trade represents the number of shares of underlying stock which are covered by that option. The stock options unit of trade is 100 shares. This indicates that one option contract signifies the right to buy or sell 100 shares of the underlying asset.

What is the strike price?

The strike price, or exercise price, of stock options, is the specified share price at which the shares of stock can be bought or sold by the holder, or buyer, of the option contract. To exercise your option is to exercise your right to buy or sell the underlying shares at the specified strike price of the option.

The strike price for an option is initially set at a price that is reasonably close to the current share price of the underlying security.

What is the stock options contract?

A stock options contract is defined by the following elements: type (put or call), style (American, European and Capped), underlying security, a unit of trade (number of shares), strike price, and expiration date. All stock options contracts that are of the same type and style and cover the same underlying security are referred to as a class of options. All stock options of the same class are referred to as an option series. They have the same unit of trade at the same strike price and expiration date

Stock vs stock options

The difference between stocks and stock options is that stocks give you a small piece of ownership in the company, while stock options are contracts that give you the right to buy or sell the stock at a definite price by a particular date. There are always two sides to every option transaction: a buyer and a seller. For every call or put option bought, there is always someone else who is selling it. Many traders think of a position in stock options as a stock surrogate that has a higher leverage and less required capital. They can be used to bet on the direction of a stock’s price, just like the stock itself. But stock options have different characteristics than stocks. And there is a lot of terminologies that options traders must learn.

What are Put and Call?

A call is the option to buy the underlying stock at a predetermined price by a predetermined date. The buyer has the right I explained above. The seller of the call who is also known as the call “writer” is the one who has the obligation. If the call buyer decides to buy, the call writer is obliged to sell shares to the call buyer at the strike price. A call option contract grants its holder the right to buy a certain but specified number of shares of the underlying stock. That right has to be executed at the settled strike price on or before the date of the expiry of the contract.

For example, you bought a call option on ABC company with a strike price of $40, expiring in two months. That call buyer has the right to exercise that option, paying $40 per share, and receiving the shares. The writer of the call would have the obligation to deliver those shares and receive $40 for them.

Put options are the options to sell the underlying stock at a predetermined strike price. Until a fixed expiry date. That put buyer has the right to sell shares at the strike price. And the put writer is obliged to buy at that price.

Calls and puts, individual, or in combination, can provide different levels of leverage or protection to a portfolio.

What are employee stock options?

Many companies issue them for their employees. When used appropriately, these options can be worth a lot of money for you. With an employee stock options plan, you are offered the right to buy a specific number of shares of company stock.

All employees’ options have a vesting date and the expiration date. It’s impossible to exercise these options before the vesting date or after the expiration date.
You’ll recognize two types of stock options companies issue to employees:

NQs – Non-Qualified Stock Options
ISOs – Incentive Stock Options

With a non-qualified type, taxes are taken from your gains after you exercise the options. However, keeping too much company stock is considered risky. For example, if the company has financial problems, your future financial security could be in danger.

When long-term investors want to invest in a stock, they usually buy the stock at the current market price and pay full price for the stock. An alternative is to use stock options. Buying them allows you to leverage your purchases. Far more than is possible in even a margined stock purchase. In several investment situations, it might make sense to invest in stock options. Hence, rather than the underlying stock. Note, the basic fact of stock options trading. You are highly leveraging your investment. And it means your investment risk is also substantially increased.

12th November 2018
Types of Trade
3 min read
- Study your previous trades and recognize the types of trade you were entering.
Regardless of personal experience in trading, conversations and exchange of views with other traders are valuable. In one of such conversations, the topic was the types of trade. After many hours and a lot of coffee, we had one conclusion: There are 3 types of trade.

I need your attention for a minute. Let me explain this.

True is, whatever measure, guide or indicator you are looking for, whatever the time frame, there are only 3 types of trade.
I meet a lot of people thinking they’ve mastered trading. The problem is they didn’t understand the differences between the trades they took.

Sure thing is, it will be easier for you if you know the ultimate goal and what can you expect from the trade you took. And it is possible if you know the type of trade you just implemented. This is very important because your knowledge is what determinate where to place your stop loss and your take profit.

When a professional trader enters a trade, he knows exactly what he’s trading. And my trading friends and me, we can recognize 3 types of trade.
1. Reversal trade
2. Breakout trade
3. Pullback trade
Each of those trades has some special characteristics (I’ll tell you more about each of them). Depending on the market you’re trading, the success of each type of trades may be different. In Forex trading, the 3 types of trade work good.

Some traders are attracted to trade all of those types for a limited number of currency pairs. But others are specialized in only one of those trades. When a professional trader enters some trade, he must know what he is trading.

REVERSAL TRADE as the type of trade

A lot of traders think that implementing Reversal trades is composed of “calling a top” or “calling a bottom”. This isn’t quite true. Actually, the entry price of a reversal trade is often in a previous zone of support or resistance. Reversal trades are among the most popular types of trade because of their ability to be easily spotted. They take place in a ranging market.

As you can see the buyers were very aggressive on the chart above because they pushed the price up all the way to point 1 from an original support zone.

But, once the price hit a resistance zone (marked as 1), buyers started to take profit. And several traders began to short the currency pair and got more aggressive. They took control of the market. This had for the result to create a strong rapid decrease in price.

At point 2, the same result came, which was a good opportunity to enter a Reversal trade. The sellers placed their orders at that level and the buyers began to take profit because they knew the price had reversed in the past at the same level.

The stop loss would usually be placed above the highest point (A) and the take profit somewhere below the resistance zone. It is tolerable to expect a risk-to-reward of 1:2.

BREAKOUT TRADE as the type of trade

Breakouts trades as one of the types of trade are usually made by a strong continuous movement in a direction. Some traders call it an acceleration because the movement is fast.

As you can see, the main resistance zone is marked by green.

This is a typical example of Breakout trade.

Take a look, the bulls were confident and kept pushing the price higher and higher to point 1. At that price, the sellers became more aggressive and took control of the market until the buyers showed even more power. The level pointed with a 2 shows a price at which bears are known to get more aggressive in the market. But, they were not aggressive when the price reached that level.

Because there were no traders wanting to sell the currency pair aggressively, more and more traders went long, thus pushing the price higher and breaking through the resistance level.

The stop loss on that trade would usually go slightly below the resistance zone that was broken and the take profit somewhere above the zone. It is tolerable to expect a risk-to-reward of 1:2.

PULLBACK TRADE as one of the types of trade

Pullback trades are usually more solid because the retracement back to a previous price level represents a certain confirmation. ( Retracement is a temporary reversal in the direction of a stock’s price that goes against the prevailing trend. A retracement does not signify a change in the larger trend.)

As you can see, a pullback trade is characterized by a retracement, often to the previous support or resistance zone.

Take a look to the chart above, the price kept ranging between a support and resistance zone. At point 2, no one was aggressive enough to move the price significantly higher or lower.

Once the price broke above the resistance zone at point 3, several traders began to feel excited about their profit so far. Most of them thought that this high price might be a good opportunity to take a profit. But, as more and more people took profit on long trades, the price slowly decreased.

When the price got back to the previous resistance zone, some traders began to feel that this price was too low. Those traders then bought the currency pair once again (at point 4) to push the price up.

The stop loss on that trade would usually go slightly below the resistance zone that was broken and the take profit somewhere above the zone. It is tolerable to expect a risk-to-reward of 1:2.

But there are some other styles of trade speaking about styles of trade.

RUNAWAYS

A stock that goes up or down too fast has a greater potential for a short counter-trend. This is caused by investors who take profits. If you bought a stock and make a very good return in a short amount of time, you will likely want to exit the trade to lock in profits.

One type of trade is to play this process, shorting a stock that goes up too quickly or buying a stock that goes down too fast. This trade goes against the longer term momentum of the stock and is only a short-term trade. For savvy traders, it can be a lucrative move.

ANTICIPATIONS

Some chart patterns show a mood but lack a trend. For example, those familiar with charts will know that ascending triangles show optimism and descending triangles pessimism. However, they are consolidation patterns, which means the price, in general, is going sideways over time.

One of the types of trade is to anticipate a breakout by buying stocks in ascending triangles or shorting stocks in descending triangles. Since price volatility is low, the risk of the trade is less and the upside greater if the stock does what we expect of stocks in these patterns, breakout. This is for advanced traders.

How to use all these types of trades?

Look at the top of this post. When a professional trader enters a trade, he knows exactly what he’s trading.
But do you know too?

Study your previous trades and recognize the types of trades you were entering. Then ask yourself this simple question:
”Did I make this as well as I could?”

If you get YES as the answer, you are a very good trader. But if your answer is NO this will help you to make progress.

Risk Disclosure (read carefully!)
11th November 2018
Tricks of The Trade

Don’t eve try to find or use tricks in the trade, here is why.

By Guy Avtalyon

There are no tricks of the trade. You will find no hacks or cheat-sheets. All you can find are countless strategies to choose from depending on your trading style and many wise practices to follow.

In short: Learn before earn. Whenever it seems something is very obvious, first see how the market is behaving before making up your mind to go long or short. Start with paper trading. Learn Technical and Fundamental analysis. Access your risk ability and only take positions in which you are comfortable with possible loss.

After many hours and a lot of coffee, we had one conclusion: There are 3 types of trade. You have to choose your strategy. If you make the right pick and learn a lot you have a chance to become a master in it.

At first, you should get theoretical knowledge about the market.

Educate yourself and read special books. Read blogs. You can find a good piece of advice there. Make out a trading strategy or taking an already working one (find it on the Internet), test it, and see how it works. Try to master it. But don’t go away from its rules (you can change the rules, of course).

Practice. You need practice. Start with a demo account. All of them are free and you can get even several accounts from different brokers to compare them and find the best one for you. Then continue with trading real money, decide what strategy is yours, and start making money!

Remember, that you should keep in mind all the tips or tricks of the trade which you will learn from literature. You will have to make all your decisions logic and automatic. After some time, when you’ll be experienced enough, you should feel the ground. Meet your losses and wins as a lesson.

Define your goals and choose a trading style

It is important to have some idea about where are you going. You have to have clear goals. Then check your trading method is capable to achieve these goals. Each trading style has a different risk profile. That requires a certain attitude and approach to trade successfully.

You have to be sure your character fits the style of trading you deal with. The mismatch will lead to stress and definite losses. Learn and practice.

It is better than trying to find tricks of the trade.

Take this small tip regarding calculating expectancy:

Expectancy is the formula you use to determine how reliable your system is. You should go back in time and measure all your trades that were winners versus losers. Then determine how profitable your winning trades were versus how much your losing trades lost.

Take a look at your last 10 trades. If you haven’t made actual trades yet, go back on your chart to where your system would have indicated that you should enter and exit a trade. Determine if you would have made a profit or a loss. Write these results down. Total all your winning trades and divide the answer by the number of winning trades you made.

Choose an appropriate trading platform

Choosing an online broker seems like a simple process. But in reality, it can be a nightmare because finding the right broker is not easy. In the very beginning, you want to be sure that the broker has the right credentials, understands the market, has similar wealth-building beliefs as you do. The most important question is about what type of trader you want to be. Are you an active trader or buy-and-hold investor? Whatever you are, it will affect your choice of broker. If you are a buy-and-hold investor and invest in index funds, making a few trades per year, fund selection may be more important to you than low transaction fees. If you like to trade off of Fibonacci numbers, be sure the broker’s platform can draw Fibonacci lines. These are the best tricks of the trade.

Choosing a respected broker is of main importance. Researching the differences between brokers will be very helpful. You must know each broker’s policies.

Have a plan before executing a trade

You don’t need a million bells and whistles to make money, just one simple tactic that works. One of the biggest problems a trader faces is bridging the gap between trade planning and execution. Getting from a strategy looking good on paper to real-world trading performance is what it’s really all about. Without question, all the planning in the world will not do you any good if you can’t execute and reap the benefits of your work. Wins and losses come in a random distribution. It is not unreasonable to sit through a series of losing trades even if you did everything according to plan. One issue to consider is that people aren’t particularly confident in what they’re doing and this can be rectified with a little guidance.

Understanding what it is that you are trying to achieve and what constitutes reasonable results can go a long way towards settling nerves and allowing a trader to execute how they have planned to do so. Clarity of mind and consistency of approach will help you to start to realize the potential of your strategy.

OK, there is one trick of the trade: “one punch, one kick.”

The idea is to accomplish the job as quickly as possible with very minimal effort. Find your edge in the market, a technique that works and sticks to your plan. If you don’t have a strategy then you shouldn’t be on the battlefield. Traders who execute random orders without a plan usually lose their money. Who needs a flying roundhouse kick, when a straight stomp to the knee will incapacitate your opponent with one simple move.

Trade quality over quantity

One general mistake is the need to always be in a trade. Some traders get whiplash by chasing the market during choppy conditions. Advanced traders are very picky about when to pull the trigger.

Most of the time the markets produce a 50/50 possibility for success. You want to be patient and wait for trades that have a higher probability than a coin toss. The trick of the trade is to find good trade setups not treat the markets as a roulette table.

That said, even quality trades have an element of chance, therefore you always need to have an exit strategy to manage risk.

Traders tend to make money when the markets are inefficient unless you’re running an algorithm that scalps a flat market, stay away from choppy or stable price action. Only trade in market conditions that are conducive to your particular trading strategy.

As we said before, there are no tricks of the trade. Trading is an art. The only way to become skilled is through consistent and disciplined practice. That’s the trick of the trade.

9th November 2018
Stop Loss Order – What is It?

2 min read

A Stop Loss is a type of closing order to automatically close a trade once prices hit a specific level in the market, normally for a loss It is one of the most popular tools for traders to minimize their risk

A Stop Loss order is automatic – so you don’t have to manually monitor your positions. This provides a certain level of control and comfort.

Experienced traders will testify that one of the keys to achieving success in financial markets over the long term is prudent risk management. Utilizing a stop loss is one of the most popular ways for a trader to manage their risk, around the clock.

What is a Stop Loss order?

A stop loss is a type of closing order. It allows the trader to specify a specific level in the market where if prices were to hit. The trade would be closed out by systems automatically, typically for a loss. This is where the name Stop Loss appears because the order effectively stops your losses.

In simple terms, Stop-Loss is an automatic order to buy or sell an instrument once its price reaches a specified level, commonly known as ‘the Stop Price’. The order is executed automatically, which saves you having to constantly monitor your deals. It also serves as protection from excessive losses.

When it comes to a market as volatile as a cryptocurrency, the hardest part is to reduce your losses. Many novice investors have quickly learned the importance of controlling losses. Some may have, sadly, had to learn it the hard way.

A stop-loss order is an order placed with a broker to sell a security when it reaches a certain price. They are designed to limit an investor’s loss on a position in a security. Most investors associate a stop-loss order with a long position. But it can also protect a short position. In this case, the security gets bought if it trades above a defined price.

How does a Stop Loss order work in practice?

The concept of a stop loss is quite flexible in terms of application in practice. In fact, there are a variety of applications to the concept of stop loss. Firstly, you can use it to keep a check on the risk of your trading positions. This is the basic role of a stop loss. Secondly, you can also apply this concept when the stock price is rising and use the concept of stop-profit or trailing stop losses to constantly keep upping your targets with inbuilt risk management.

The price at which a stop loss order is placed is a personal decision and depends on the trader’s risk tolerance. Traders should consider not setting their limit too low. Doing so would result in the orders getting filled too fast, even with normal market volatility. The price at which stop orders are placed should allow room for a currency pair to rebound in a favorable direction while providing protection from excessive loss.

What this means is that stop loss is not meant to eliminate all risk. The price should be set far enough into the ”loss” territory or at a place from where a return to profitability for that trade seems unlikely. A Stop Loss helps to manage your risk and keep your losses to an acceptable and controlled minimum amount.

How to set up a Stop Loss order

Setting a Stop Loss order is very easy. When you open a deal, you will see an option to ‘Add Stop-Loss’. Simply choose an amount you are willing to lose on the specific deal. Alternatively, set an exact in which the deal will automatically close.

The real challenge with Stop Loss is figuring out which rate to set, but with a bit of practice, you will discover that automatic orders are extremely useful.

Do stop losses provide complete protection?

They are one of the best ways to ensure your risk is managed and potential losses are kept to acceptable levels. Stop losses orders are great and can assist in a variety of ways including preserving your money, preventing your position to become worse or for guaranteeing profits. But they don’t provide 100% security.

They protect your account against adverse market moves, but they cannot guarantee your position every time. If the market becomes suddenly volatile and gaps beyond your stop level it’s possible your position could be closed at a worse level than requested. This is known as price slippage.

The advantages and disadvantages of the Stop Loss order

Novices will just bump the keyboard and hope their money is still there tomorrow. But not you. You’re ready to make some smooth love to the charts. Stop Loss order is an extremely important tool for traders. Experienced traders understand that Stop Loss orders are not a perfect solution. They should be used carefully because they can also limit potential profits by effectively closing a deal too soon.

The advantages: Stop order offers protection from excessive losses and enables better control of your account. It helps monitor multiple deals. Stop order is executed automatically, at any time and it’s easy to implement. And allows you to decide what amount you are willing to risk.

The disadvantages: Stop Loss order could result in deals closing too soon, hence limiting profit potential. Traders need to decide which rate to set, which could be tricky.

The bottom line

Having a losing position is certain, but you can control what you do when you are caught in that situation. The ultimate goal for online traders is to take advantage of price changes in order to profit. By carefully using Stop Loss order you can both minimize risks and maximize your profit potential.

Risk Disclosure (read carefully!)

8th November 2018
Initiative Q – What is It?
3 min read
- Initiative Q has adopted some of the worst elements of scammy altcoins
If you google Initiative Q and head to its website, you will find a giant page posture “tomorrow’s payment network”.

Social media’s got itself a new trend, it asks you to sign up to a new financial network called Initiative Q.

To attract signups, Initiative Q is using pyramid-style recruiting, aggressive social marketing. And it’s working: The project has been public since early summer, Google searches for “Initiative Q” have exploded since October 14.

You may have already been addressed by friends on Facebook or Twitter. And they told you there are only a limited amount of invites to join in on the next crypto, future bitcoin, that will potentially get you rich quickly. Despite that great interest, there is a concern that the operation might be a scam.

Initiative Q is a project led by veteran payments entrepreneur Saar Wilf, who contributed technology to Paypal, and George Mason University economics professor Lawrence H. White. They want to launch a digital currency but they’re very noisy about the fact that it’s not a cryptocurrency.

Initiative Q says it will be “tomorrow’s payment network.”

Wilf has started a viral social media campaign with this:

“Interested in a free $130,000 lottery ticket, which I estimate has a better than 1% chance to win?”

And below

It is evident they need to encourage mass adoption if they want success.

But, let’s put aside absurd and arrogant claims of their made-up “currency” being worth $2 trillion USD in the future. For now, they have a nice landing page. Anything can go in the world of marketing. But there are some reasonable questions we have to ask.

How could free units of a new digital currency end up being worth thousands or billions of dollars?

This is where things get interesting.

If you read through Initiative Q’s website and try to find how they got to their absurd $40,000 airdrop value you will find a long description, but here’s the summary of how they got there:

As you can see Initiative Q is different as it doesn’t ask you to invest any money. The free offering promises to collect a better financial reward if you secure one of the free slots. That means there should be no financial risk to you to join.

They are offering to set up a new payment network utilizing the very newest technology and then run a private currency ‘Q’ on that network, with a base of 2 trillion Q, which will be worth $1 per Q. This may make you think of a pyramid or Ponzi scheme, whereby a scammer will trick new investors, but no money has changed hands. Yet.

That, however, doesn’t change the fact that Initiative Q is in our opinion, a really bad idea. Initiative Q has adopted some of the worst elements of scammy altcoins, without even small simulations of technological innovation. It’s connected in general with risks.

Why does it look like a scam?

It’s premised on the hype

Initiative Q most resembles a crypto scam while active promoting of FOMO, or Fear of Missing Out. Its own marketing materials compare it to “getting free bitcoin seven years ago.”

Promoters spin estimates of the currency’s future value and they’ve built their marketing on “the earlier you join, the higher your reward.”

This rhetoric is created to attract the naive audience, and get them caught up in the excitement of easy money earning. Take a look at their Facebook profile. It also doesn’t seem like a coincidence that Initiative Q sounds like QAnon. It is a dangerous viral conspiracy theory that has taken over certain corners of social media in the past few years.

Let’s say, prop up scammers.

It’s not anonymous

Initiative Q is pointing out that they’re not selling anything. They’re just asking for your name and email address. They just want to keep you in the loop when the currency is launched. But, this trove of names and emails is a giant tank for hackers at the same time. A list of people interested in get-rich-quick schemes that could be extremely lucrative for more opened scammers. Where is the anonymity? The essence of crypto, P2P and blockchain!

Initiative Q seems to have missed the core source of the cryptocurrency enthusiasm they’re trying to use to leverage their really weird non-crypto. Data is valuable, and advertising companies will gladly pay heaps of money for access to good lists. Yes, they say in their privacy policy that they don’t sell our data! So does Facebook. That didn’t stop Cambridge Analytica from scraping illicit data and using it to advertise during the US 2016 election. If Initiative Q is sold to another company, they have every right to change the privacy policy. There’s no guarantee that your data is private. If there is no possibility of anonymous digital transactions what they are looking for in the world of crypto? Without the possibility of anonymous digital transactions, nobody would give a damn about cryptocurrency.

It has no technology

Initiative Q doesn’t have anything as yet, except the notion of ‘build a payment network and it’ll be awesome. Frankly, many of the things Q is promising to build already exist in the form of Apple Pay, Google Pay, AI fraud prevention, and smart card systems. What’s new? It looks like another payment app, just another payment processor. It’s utterly unclear what unsolved problem Q is meant to address. Keyword ‘unclear’! Fog! They have no idea but they want you to sign up. Smart! The most interesting thing about Initiative Q is its creators’ decision to pitch it as “sort of like a cryptocurrency, but definitely not a cryptocurrency.” So, what it is?

They have no product. Most ICOs or cryptocurrencies will explain how they plan to build their network. They ’ll draw up a whitepaper, going deep into the technical details.

What about Initiative Q? Nothing! No product, no details, no descriptions. There are some indications, signs but all unclear and obscured.

There’s an endless well of frustrated greed in the world. For a while, cryptocurrency was the vehicle and object for that greed. What Initiative Q’s creators seem to have missed is that there’s a lot more to it than that. Greed isn’t the main subject.

Its marketing is scary

Initiative Q’s authors have presented their plans to the world with all the aspects of a scam. Where’s the evidence for this?

Here! You can only join Initiative Q if you’re recruited, and each new joiner gets five invites to send out to friends. Recruiting others rewards you with more Q currency in the future. OK, there is no buy-in price, but that’s literally a pyramid scheme.

Initiative Q has been aggressive in using barrel-scraping content marketing tactics like MLM. But, unlike the MLM businesses, Initiative Q isn’t asking you to buy anything. They’re just making incredible promises about the value of the free coins they’re handing out.

Our concern is that when “get rich quick” schemes like this go viral on social media, they rust the image of cryptocurrency. They can cause confusion among the general audience. Even if Initiative Q does work out as a new system of payment, their marketing has been misleading. That “by invite, only” system for early adoption makes a false sense of exclusivity. At the same time, it can encourage people to spam their social media feeds with the Initiative Q saga.

Initiative Q is centralized

Initiative Q is a digital currency that’s not blockchain-based. According to creators, it is a payment network with a smartphone app, instant payments, and better fraud prevention than credit card companies. In fact, it links its fraud prevention specifically to the idea that it’s centralized.

They are establishing “patterns of appropriate and inappropriate behavior,” and Initiative Q will build “more reliable fraud assessment.”

What does it mean?

It is just an enhanced version of what banks and credit cards do. And that’s exactly the problem: Q isn’t an actual innovation. Initiative Q creators really just want to build a centralized payment network. And they want to take their piece of cake.

Q will be a private currency and you won’t control the money you receive. The network could shut down, the admins could move your money into someone else’s account. There is no guarantee the Q would avoid legal intervention that destroyed earlier centralized digital currencies.

Should you sign up to Initiative Q?

We won’t tell you what to do with your money. But be very cautious when it comes to Initiative Q and online promises of quick wealth.

It’s possible that Initiative Q is not a scam. It’s possible that they’re just a company orchestrating a brilliant viral marketing campaign. Nothing is wrong with that. PayPal, CashApp, Payoneer, offer referral programs to attract new users.

So, where the problem lies? There are so many ways to make money, especially in the crypto area. People are wasting their time on gambles like this.

Initiative Q’s affiliates promote this possible scam instead to do something that’s actually profitable. True wealth never comes by waiting for random internet companies to hand deliver you $40,000.

Risk Disclosure (read carefully!)
7th November 2018
Ripple Cryptocurrency – latest review
2 min read
- What is the future of the Ripple cryptocurrency?
First of all, it should be explained that Ripple is not a cryptocurrency in the usual sense of the word. In fact, this is a settlement system that has become a faster, more transparent and secure alternative to the existing ones. For example, the SWIFT system used by banks. Ripple cryptocurrency is a combination of currency exchange and a money transaction company.

XRP, the so-called Ripple coins is used to facilitate transfers in different currencies. In existing settlement systems, the basis for the conversion is usually US dollar. That process is associated with additional costs and lasts for a long time and bank transfers between countries, often last up to 3 days.

Converting payments to XRP instead of dollars, the system saves inventory costs, and transaction processing takes a few seconds.

XPR token

XRP is a token used for representing the transfer of value across the Ripple Network. The main purpose of XRP is to be a mediator for other – both cryptocurrencies and fiat – exchanges. The best way to describe XRP is ‘Joker’. Not the creepy Batman enemy, but the card that can be any other card. If you want to exchange dollars to the euro, it can be dollar with dollars and euro with euros to minimize the commission. As highlighted above, the transaction cost on Ripple is $0.00001.

After the transaction, the amount of $0.00001 ‘disappears’ from the platform and can’t be replenished. With every transaction, the world becomes $0.00001 poorer. It is designed that way to prevent spammers attacks.

Basically, Ripple wanted to be a cryptocurrency built for enterprise and banking use. It wanted to enable fast cross-border payments, low transaction fees. And all of the other benefits of digital currencies. Most importantly, it wanted to do this with the goal of targeting enterprise and banks. The two groups that require extended features you won’t find on cryptocurrencies like bitcoin or Ethereum.

How Ripple cryptocurrency works

Ripple is a system that enables the execution of transactions by binding banks, digital exchanges and corporations in order to be able to send and receive money worldwide. The basic idea is to replace old principles like SWIFT. Ripple has licensed its blockchain technology to many banks. Furthermore, there is a lack of complete anonymity that most people value in cryptocurrencies. Relationship with the “enemy” i.e. the banks, rejects many. But what is most important is that Ripple is doing great on the market and that this connection with banks can even represent a measure of security.

Ripple: an exciting, feature-rich network

To understand Ripple’s place in the crypto universe, we have to value its contributions to the industry. In addition to being one of the most renowned digital tokens, it is also one of the most efficient payment networks for financial transactions on the planet.

The Ripple technology is, in fact, more widely known for its digital payment protocol. Then for being a cryptocurrency. The XRP (Ripple) is the associated cryptocurrency of the platform. It performs the part of a bridge currency to other tokens without discriminating between fiat and crypto, facilitating exchanges between different coins. The Ripple cryptocurrency; the XRP, has the power of liquidity by serving as a bridge between other means of payment, making the exchange more comfortable for all parties involved in a transaction.

Ripple is an official organization with the trust of many banks. It’s not another Blockchain startup from a no-name company.
No inflation. All the tokens are initially mined and already exist. The more banks use it as their transaction platform, the higher the value of XRP.

What is the future of the Ripple cryptocurrency?

Predicting a cryptocurrency course now becomes something really in trend. Lot’s of public places spot their thoughts, trying to guess what would happen next. And among the cryptos, nothing is taken into such consideration as Ripple.

Ripple still has some growing room left, but meteoric rises like seen at the end of 2017 will naturally be few and far between, and it’s safe to assume that the price changes will settle into more sustainable ranges. This is especially likely for a cryptocurrency like Ripple which can benefit from price stability.

They have a large supply

With its large supply and currently limited use, investors will want to be wary of readjustments following price rises. This is especially true for a coin like Ripple. It benefits from stable pricing and is designed more for corporate use than individual use.
Although there is a long list of very respectable banks that are planning to use Ripple. According to the Financial Times, most of them are still on the testing stage. The few who transact real money use the platform but not the token. So, perhaps banks “are not that into Ripple”.

Why is Ripple criticized?

However, there are some cons. Ripple cryptocurrency is highly centralized. The whole idea of cryptocurrency is to avoid centralized control. As the tokens are already mined, the Ripple developers can decide when and how much to release, or not to release. So, it is basically like investing in a bank.

In addition to centralization, today it is pretty much a monopoly as Ripple Labs owns 61 percent of the coins.
Yes, it is open source and very smart. But still, once the code is accessible there is a good chance many people will try to hack it. Some of them even might succeed.

And it can freeze your transactions.

The biggest example of this is when Jed McCaleb, founder of Ripple Labs, tried to sell more than a million dollars worth of Ripple. The transaction was reversed. There are rumors that McCaleb breached the contract. But even then, the very possibility of freezing a transaction is against basic cryptocurrency principles.

Samson Williams, CSO of Ireland-based fin-tech firm SeedUps said.

“Though not a cryptocurrency at all, it is the child of banks. So it’ll get the natural bump from the 2018 Recession.”

The bottom line:

Ripple/XRP still has room for growth. They have an impressive list of partners. It looks like many people have a vested interest in seeing Ripple succeed.

Is Ripple able to pull off its goal of being the preferred money transfer system for banks across the world? If the answer is YES, then we can see Ripple at least maintaining its position as the third most valuable cryptocurrency.

Risk Disclosure (read carefully!)
6th November 2018
Make Money Online Quickly

Nowadays is very easy to find a job and make money online. Here are some of Traders-Paradise’s suggestions.

By Gorica Gligorijevic

How many articles you can find on the internet about making money online? Thousands? Millions? Enough? But Houston, we have a problem. Too many of them are just sales steps to convince you to sign up for some seminar, webinar, or some other way to become an online millionaire.

They all give online money making a bad name. But it is possible to make money online. There are legitimate ways to make money online. Most of them require a lot of work and sometimes a lot of dedication before seeing a return on your time. But if you really want to make money online, you can do it. You can even earn money with apps if you don’t want to venture all the way to the computer.

At this moment we are talking about how to make money online fast. We want to share current methods that work in 2018 and have potential in 2019.

Without further ado, here’s the list!

Online market trading

The hard-to-break world of investing in stock markets and currencies has been wide open. Today there is no need to fund the yachts of Wolf of Wall Street-style stockbrokers and sharks. You can do it all yourself with the help of online market trading platforms.

We are having spent many hours researching this new opportunity. Actually, we have been experimenting with one of the biggest trading platforms out there. You can read more about our research here.

Searching the web

Are you interested in making money for doing what you already do online? This is one of the easiest ways of making money online without really any effort or change in your behavior. That’s really good!

This method rewards you for searching on Google, Bing, or Yahoo. The only thing you have to do is to install a simple add-on to your browser. When you conduct a search there may be a few sponsored results alongside your normal search. Each result has a cash reward attached. If you are interested in it simply click on it and collect your reward. The best thing is there is no minimum to cash-out. You also have the option to donate it to charity.

Sign up and start earning from your own searches.

No-risk matched betting

This is the quickest way to make a lot of money and without breaking the law. This technique is completely legal, risk-free, tax-free, and anyone can do it.

It works by taking advantage of free bets regularly offered by betting sites through ‘matching’ them at a betting exchange. Matched betting eliminates the risk (you are betting both for and against a certain outcome).

This leaves you being able to squeeze out the free bet, which can be as much as $300! Multiply this by how many betting sites there are and you can quite easily come away with a profit of a few hundred pounds. If you know of any better way to make $50 per hour sitting at home, let us know, please!

Online surveys and make money online

There are all kinds of websites that will pay you for various things, such as shopping, taking surveys, or testing products. These websites won’t make you a millionaire, but they are great for making money online.

This is the most popular way for students to make money is to fill out online surveys. And you can do it in your spare time. Research companies are always recruiting new members to answer surveys and test new products.

For a few minutes of form filling, you can make an amount that is paid as cash or rewards. You can bag up to $5 for some surveys!

Start an affiliate website

Are you interested in generating passive income? If yes, you need a website. It’s the way to make money while you sleep.
Starting a website with Bluehost takes less than 20 minutes, costs hardly anything, and can be done by an 82-year-old. You must be included on social media to get your first visitors. There are plenty of ways to monetize your site.

There are 4 parts to creating a website: domain name, hosting, content management, and design.

WordPress Bluehost WordPress is a free Content Management System (CMS) that allows anyone to make, design, write, and manage their own website.

Aside from publishing high-quality content, the most important thing is to get traffic to your website. How do you get visitors to your website?

Post on Twitter using hashtags, share links on Facebook groups, join Pinterest groups.

Review websites & apps for cash to make money online

If you’re pretty skillful with a web browser, so maybe it’s time to turn pro and browse websites as a paid and fun job!

Find a platform that pays everyday people to review all kinds of websites. Each review takes around 20 minutes and bags you $10 usually.

Simply sign up, complete a test review, and look forward to receiving websites in your inbox. This is a pretty good way to make money online and an easy one.

‘Get Paid To’ sites

Similar to making money from online surveys, GPT sites reward you in cash and vouchers for completing various offers or activities online.

Fortunately in the “gig economy,” there are plenty of ways you can earn a little extra cash for your time. Whether it’s market research surveys or focus groups or donating your plasma, there are a lot of places that will pay.

It’s possible to get paid hard cash just for searching the web. It just involves downloading an add-on that sits on your internet browser. You then search online as you normally would on Google, Amazon, eBay, Yahoo, Bing, and Tesco.

It is good for folks with the patience to click ads for a few bucks.

The most popular sites today are Toluna, Swagbucks, and InboxPounds.

Affiliate Marketing to make money online

Becoming a part of an affiliate network is an excellent strategy for bloggers looking to up their current income or even just to begin actually making money from their blog. This is one of the most popular ways people make money online. It is a strategy where partners with a business in order to make a commission by referring readers or visitors to a business’s particular product or service. But that is a simple context. To be really successful at making money with affiliate marketing there is a little more to it. If you’ve got a good presence on social media or perhaps you even have a blog or website, you can start making money online immediately by promoting all sorts of companies, products, services, and offers online. Sign up as a publisher, browse the merchant listings to find something you think your friends would be interested in, grab your affiliate link, and share it. If someone buys using your link you’ll make a nice commission.

To take it a step further, set up a website or a topical Facebook page, and invite all your friends to join it and post your affiliate offers on there.

Publish a Kindle eBook

If you are good at anything, it’s researching and writing. Right? With the Amazon Kindle store, anyone can publish an eBook and make money.

And the Kindle app is now available on almost any device: laptops, iPads, smartphones, and yes, Kindles! Well, your global market looks pretty huge!

List your book for $2 – $5 and you earn 70% of the sale, that is a fantastic deal. Amazon is the ultimate selling machine. Remember people are looking to spend and you are looking to make money online.

Freelance work

Maybe you enjoy writing, managing Facebook pages, or doing a little bit of graphic design in your spare time. There are so many freelance jobs out there that require simple skills or just time that someone else might not have.

The best thing about freelancing is that you can work for clients around the world with just an internet connection from home. Or from some other place.

A great place to start is with the leading freelance site Upwork.com.

Wondering how to make money online in 2018 and 2019? Perhaps you’ve already tried, but haven’t had any success. We’ve tried to include every legitimate online earning method. And what we found is that some methods can make you a millionaire.

But others are only good for a pocket change. In many cases, the income potential is virtually impossible to give. So don’t take these potentials too seriously. They only serve as a general guideline.

Remember, your online income takes time to grow. You need to be willing to devote the time and energy required to get your idea off the ground. And you need something very solid to stick with it even if your journey is slow when you first start out. But it is worth it.

5th November 2018
Fibonacci retracement – Know When to Buy and sell

2 min read

Fibonacci numbers are 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, etc. The sequence occurs by adding the previous two numbers (i.e. 1+1=2, 2+3=5). The main ratio used is .618. This is found by dividing one Fibonacci number into the next in sequence Fibonacci number (55/89=0.618).

The logic by Fibonacci based traders is that Fibonacci numbers occur in nature. And the stock, futures, and currency markets are creations of nature – humans. Therefore, traders can apply the Fibonacci sequence to the financial markets.

There are many Fibonacci tools such as Fibonacci Retracements used by traders.

In finance, Fibonacci retracement is a method of technical analysis for determining support and resistance levels. They are named after their use of the Fibonacci sequence. Fibonacci retracement is based on the idea that markets will retrace a predictable portion of a move. After which they will continue to move in the original direction.

Use Fibonacci Retracements to Enter a Trade

First of all, no indicator should be used in isolation. But by combining it with trend analysis it helps highlight logical areas for entering trades.

Fibonacci Retracements are considered a predictive technical indicator as they attempt to identify a future exchange rate. The theory is that after a rate spike in either direction, the rate will often return or retrace. Part way back to the previous price level. Before resuming in the original direction.

When the price of an asset pulls back, it typically has a mathematical relationship to the price wave that preceded it.

Moves lower off a recent high, or moves higher off a recent low.

This relationship is based on the “Golden Ratio” and a series of “Fibonacci Numbers” that help define the numerical relationship of one thing to another.

Interpreting Fibonacci Retracements

Given their popularity and widespread usage by technical analysts, it is good to know how to interpret Fibonacci retracements. However, as with any indicator, it is wise to seek confirmation from additional sources. Just to bolster Fibonacci analysis before basing a large trade.

Once an impulse wave has occurred, the price will quite often move to and stall at one of the Fibonacci Retracement levels. If the price falls through one level it will likely proceed to the next level. Sometimes, a price may stall at one level, then proceed to the next, stall and proceed to the next and so on.

During such periods it is important to have some guidelines. To know on which levels are likely to be most important in certain market conditions. This will require a lot of practice reading price action.

When there are strong trends, what to do?

In a very strong trend, you should expect shallow pullbacks, to 23.6, 38.2 and sometimes 50. In regular trends, or during the middle of a trend expect a pullback to the 50 or 61.8 levels. Early in the trend, late in the trend or during weak trends expect retracements/pullbacks to reach the 61.8 or 78.6 levels.

We can’t know in advance which Fibonacci level will reverse the pullback. Since there are multiple levels, which one it stops can be random. This is why we need some other tools to help make trading decisions. If we opt to use retracement levels.

When it comes to using Fibonacci Retracements as a technical indicator, trader discretion is advised.

The Fibonacci tool works best when the forex market is trending.

Fibonacci retracements provide some areas of interest to watch on pullbacks. They can act as a confirmation if you get a trade signal in the area of a Fibonacci level.

The idea is to go long (or buy) on a retracement at a Fibonacci support level when the market is trending up. And to go short (or sell) on a retracement at a Fibonacci resistance level when the market is trending down.

Fibonacci Retracements are ratios used to identify potential reversal levels. These ratios are found in the Fibonacci sequence.

The most popular Fibonacci Retracements are 61.8% and 38.2%. Note that 38.2% is often rounded to 38% and 61.8 is rounded to 62%. After an advance, chartists apply Fibonacci ratios to define retracement levels and forecast the extent of a correction or pullback. Fibonacci Retracements can also be applied after a decline to forecast the length of a counter-trend bounce.

These retracements can be combined with other indicators and price patterns to create an overall strategy.

Unlike moving averages, Fibonacci retracement levels are static prices. They do not change. This allows for quick and simple identification. And allows traders and investors to react when price levels are tested.

Because these levels are inflection points, traders expect some type of price action, either a break or a rejection. The 0.618 Fibonacci retracement, that stock analysts like to use, approximates to the “golden ratio”.

Basic Fibonacci Retracement Strategy

Fibonacci Retracements are a guide; don’t expect the price to stop exactly at a certain level. For example, the price slightly overshoots at the 61.8 level. It is typical for the price to stall just above or below a Fibonacci level.

Buy when the price pulls back and stalls near one of the Fibonacci retracement levels. And then begins to move back to the upside. Place a stop loss below the price low that was just created. Or below the lower Fibonacci retracement level to give more room. In perfect position, the retracement level you buy at is one that the asset has a tendency to reverse it.

Look for some sort of trade trigger to occur near the Fibonacci level. For example, the price is up and the price has pulled to near a key Fibonacci level. You should wait for the price to consolidate. And then break out of that consolidation to the upside. This adds a second layer of confirmation. Also, you can watch patterns to trigger a trade.

Without this trigger itis hard to trade Fibo levels on your own.

How to apply

In a downtrend, sell when the price pulls up and stalls near one of the Fibonacci retracement levels. And then it begins to move back to the downside. Place a stop loss just above the price high that was just created. Or above the higher Fibonacci retracement level to give a bit more room.

Again, add in a trade trigger or some other element of confirmation.

Looking at how strong the trend is can help determine which Fibonacci levels are most likely to stall and hopefully reverse the pullback.

The bottom line

You can apply Fibo to any time frame, including ticks charts, 1-minute charts or weekly charts. Also, you can use retracement levels on any liquid market. And can be applied to individual price waves or multiple price waves.

You might also like:

>>> Best Trading Strategy Without Indicators In Forex

>>> How to Use Technical Indicators to Analyze Stocks?

>>> MACD Indicator – Moving Average Convergence Divergence

>>> Indicator Trading And How To Use It

>>> P/E Ratio An Quick Method to Value a Stock

2nd November 2018
What is Bitcoin Wallet and How to Open It?

The bitcoin wallet is a collection of private keys

By Guy Avtalyon

The answer is simple, a Bitcoin wallet is a collection of private keys. It may also refer to client software used to manage those keys and to make transactions on the Bitcoin network.

But there is also the technical definition. The Bitcoin wallet is a software program that stores your private and public keys (they come in pairs). It enables you to send and receive coins through the blockchain, as well as monitoring your balance.

How to open a Bitcoin wallet?

The exchanges automatically create a bitcoin wallet for new accounts, almost all of them. All you’ll have to do to be able to use a bitcoin wallet is to load it with bitcoin or some altcoins. However, as wallet providers will charge fees for any outside transaction, it may be cheaper to examine the benefits of a non-managed opportunity.

It’s easy to find plenty of free wallet options. When using a web-based wallet that means, you’ll have to share your private key with a third party. For the new users of crypto, this is maybe the easiest way to start using a bitcoin wallet. On the other hand, this isn’t suitable for privacy-minded users.
Keeping your coins in an exchange can be risky. There is a potential of losing them all. Why? Simply because you do not technically “own” the coins you’ve bought in exchange. Exchanges operate like a bank. It represents a third-party service provider and you must trust they are able to keep your coins safe. Still, there is always a chance that exchange can be shutting down or be hacked. The result could be you end up in a loss of your coins. Given the lack of regulatory frameworks on exchanges and cryptocurrencies as a whole as well as the infancy of the industry, the best way to keep your coins safe is to have total control of your coins.

How does the Bitcoin wallet work?

Ownership of your private keys gives you total control over the funds associated with your matching public keys. That’s why it is vital to make sure you keep your private keys secretly hidden so that only you know your private keys. It is important to have a back-up of your private keys.

Digital, and in the same way bitcoin wallets are different as compared to your physical wallet. Digital wallets don’t store real money, instead, they store private and public keys. Private keys are like your PIN number to access your bank account, while public keys are similar to your bank account number. When you send Bitcoin, you’re sending a value in the form of a transaction, transferring the ownership of your coin to the recipient. For recipient is important that his/her private keys must match the public address you used to send Bitcoin. Of course, if that one wants to spend transferred Bitcoin.

Why would you need a Bitcoin wallet?

Bitcoin, as a difference from traditional money, is digital money. Hence, access to this currency is totally different. Especially when it comes to receiving and storing it. To be clear, Bitcoin doesn’t live in any tangible form, it can’t be stored anywhere. What owners can store is the private keys to have access to the public Bitcoin address. Key is also necessary to sign the transactions that need to be securely kept.
Only with this combination of recipient’s public key and your private key a Bitcoin transaction possible.

You’ll find several different kinds of Bitcoin wallets, that fit different requirements and differing in means of safety and security, comfort, or convenience.

By using the wallet software, you are able to send and receive Bitcoin. If you want to receive Bitcoin, a wallet is all you need. This means that you personally can send the Bitcoin to the address of your wallet.

In case you want to send Bitcoins, you will need to have them first. To buy Bitcoin you’ll need to subscribe to one of the online exchanges. to authenticate yourself, you’ll need some ID card and proof of residence. When it is done, you can start to send money to that exchange and in return to receive Bitcoin for fiat money. The rest is simple. Just send the bought Bitcoin to your digital wallet. Never keep Bitcoin or any other digital currency for a long time. In fact, as long as your Bitcoin is stored on exchange it isn’t really yours. The exchange could be hacked or closed. Well, you’ll lose all your funds.

What is needed to open it?

Because Bitcoin is decentralized, you cannot just open an account and put money in and out. To put your digital coins somewhere, you’ll need a wallet or at least a Bitcoin address and a private key. On an elementary level, the address operates like a bank account number. The private key is actually similar to your signature or password to a netbank. To confirm the possession of your digital money you need a private key. Never ever share it with anyone!

Okay, but how will you access your coins? You have to download a digital wallet on your computer/phone. Cryptocurrency wallets store your address and private key, they’re functioning like a netbank. You can receive and send amounts.

It’s difficult to choose from the millions of Bitcoin wallets. Do some research and find the best for you. Maybe the most comfortable way is to add a wallet extension to your browser.

1st November 2018