Ask HN: What is a good way to get into trading cryptocurrency as a developer?
I have limited knowledge about trading cryptocurrency, so obviously I need to educate myself about that first (feel free to suggest some resources). I do have a strong CS background thus specifically I'm looking for advice/resources that could show me how to utilize my CS knowledge in cryptocurrency trading.
I'm assuming you're talking about algorithmic cryptotrading here since you'd like to utilize your CS skills. No need to inform you that trading by bots is extremely risky, i'm sure you already know it.
Well here you go:
Grab some foreknowledge of cryptocurriencies from https://github.com/Xel/Blockchain-stuff.
Sound knowledge of Quant,Stats and Economics in general. Also grab the Black Swan by Nassim Taleb if you can.
Learn a bit of technical analysis: Familiarize yourself with indicators
You'd need to spend some time on exchanges that have APIs, play around with the system a bit.
Learn about what kind of trading is allowed and what types of orders you can make.
Trade by hand just to get a feel of what trading is like. Some exchanges have demo trading in built when you sign up. Play around until you're comfortable
Find the trading strategy you're comfortable and begin to automate it.
Be prepared to lose lots of money!!!
Also join telegram chats of the various cryptogroups. Their analysis is so spot on, it sometimes feels like insider trading. Good luck
Can you suggest some good telegram chats?
Bitstash chat is a small community, but incredibly helpful
WhaleClubBTC
ICOcountdown - If you're into pump and dump for quick money. This is heartless way of making money IMO
TheCoinFarm
The top comment in this thread is very informative:
https://www.reddit.com/r/BitcoinMarkets/comments/1rhtv1/eli5...
The "pump & dump" dynamic is extremely important in cryptotrading.
I'm not too sure that CS knowledge would be that applicable (for trading) at least. Trading cryptocurrency for profit is speculation - essentially the same as trading a stock on the stock market. Unless you're working in HFT or trying to build out an algo to trade for you, besides some basic math skills, I can't see how CS knowledge would apply.
Trading stock is not pure profit speculation, there are a number of alternative strategies including for example statistical arbitrage. Much of this requires simple statistics understanding for the basics, and a Phd to be particularly useful.
I found Cryptotrader [1] interesting years ago, & found myself wishing I knew how to code so I could get in on maybe making some money there.
Was using a minimal bot that came as a Chrome extension called "Butter-Bot", but it stopped working right after that one Thanksgiving when it broke $1k- when the market started going sideways. The developer was building a newer version called "Butter-X", which looked promising, but was never completed after money ran out.
[1]
1. Go to bank.
2. Withdraw large pile of cash.
3. Put it in a metal garbage can, away from any flammable materials.
4. Light the cash on fire.
This will get you to the same destination, only much faster.
Why? If cryptocurrencies have value, the value will likely increase in the future. So why not buy?
> If cryptocurrencies have value, the value will likely increase in the future.
That's not axiomatic. You really want to do more to prove this is indeed the case.
As long as there is a limited supply, speculators and draconian governments and crime it'll keep going up. I'll bet it'll keep going up.
Threats are hacks, quantum computers and crypto currency competition.
You absolutely can make money with bots in cryptocurrency - there are times when different exchanges have $100 differences in the price of bitcoin. During times of volatility you can have bots making money off arbitrage.
At least circa whenever it was that BTC broke $100, the state of exchanges' APIs was such that arbitrage wasn't practical. I remember reading about it on an old bitcointalk.org thread when the Butter-Bot developers were soliciting feedback regarding what direction their paid customer base wanted them to go.
The only working arbitrage software I ever saw was this short-lived one with a circular UI (IIRC), & it wasn't fully automated.
I'd be interested to learn the current state of affairs on the subject.
It's not really pure arbitrage when the prices are so volatile and every transaction takes ~30 minutes to confirm. I'd say he's going to have better luck with smaller crypto trading pairs.
Start with this
never forget to only play with what you're willing to lose