Trading Cryptocurrencies: A Beginner’s Guide – Bitcoin, Ethereum, Litecoin (Trading Cryptocurrencies) is a modest, slim book of some 70 pages (an additional 15 pages are devoted to marketing services and other books by the author Clem Chambers). Priced at £7.99 for the paperback and £4.99 for the ebook version, it is expensive.
Don’t be deceived. Its modesty hides common sense as applied to trading cryptocurrencies. It is easy to read and to absorb multiple lessons, of which the principle one concerns the need for diversification (other wise known as portfolio management).
The golden rules
Trading Cryptocurrencies opens with six ‘golden rules’. These are not original but matter:
- Rule 1: Any fool can make money buying in a bull market
- Rule 2: All you have to know is which way the market is going
- Rule 3: Don’t confuse your brains with a bull market (see Rule 1)
- Rule 4: Trees don’t grow to the sky. Things don’t go up forever
- Rule 5: Up like a rocket, down like a rock
- Rule 6: Risk = reward.
Chapter 2 then dives into ‘getting started’ – remember this is a book about how you can trade cryptocurrencies. Arguably Chapter 8 (entitled ‘The Technical Stuff’) should come before Chapter 2. If you do not understand cryptocurrency terminology, and concepts like the blockchain, you run the risk of further bafflement in an already baffling and fast moving set of market places.
Once you know how to start, the ensuing chapters are self-descriptive:
- Investing in Cryptocurrency
- Trading Cryptocurrency
- Advanced Investing
- Mining Cryptocurrencies
- The Technical Stuff.
As the book’s title suggests, the focus is how a ‘player’ might can exploit cryptocurrencies to make money. It is good at separating how an investor is different from a trader or a miner. It suggests tools for each and leaves the reader to make his or her own decision as to the value of playing.
Trading Cryptocurrencies mentions Bitcoin, Ethereum and Litecoin in its title. The description of Bitcoin is sensible. That said, the mentions of Ethereum and Litecoin are passing ones.
Yet the role of Ethereum, in particular, as an ‘oil’ which facilitates ICOs and other trading activities has minimal discussion. This seems like a significant omission, especially when Bitcoin valuations seem outrageous (though Mr Chambers speculates that the limited number of Bitcoins might reach a value of US$100K each – not US$10K each).
What does this mean
Trading any form of cryptocurrency is not for the faint hearted. Nevertheless this is a useful book which is both an introduction to the topic and a guide as to what to do if you insist on proceeding.
As the author says of ICOs “Anyone looking at an ICO with a view to invest must understand they will lose all their investment in nine out of ten (opportunities)… From a stock market point of view, most ICOs are a joke. Anyone trying it on in this sort of way with a listed company would be thrown off the market and probably into jail.”
Trading Cryptocurrencies should put you off trading cryptocurrencies. If it does not you will obtain the initial pointers and tools to assist you to risk – and probably lose – all, with appropriate warnings from Mr Chamber as you proceed.