Lately more and more people have been contacting or asking me how to get into trading or how I personally trade. I suppose that's because of COVID-19 as people are looking at different ways to fill their time now that we've all got more of it. Either that or they're looking for ways to earn a side income, or perhaps both. I guess that with cryptocurrencies, trading is something to take an interest in as it's possible to make money in, you can do it in your own home, on your own time, and you you can easily get started within minutes.
When people ask me which Canadian crypto exchange they should use, they become surprised and puzzled when I don't recommend any of them. I first tell them that it's not because I've got something personal against Canadian crypto exchanges, because I don't. I then tell them that I don't use them for a variety of reasons. Canadian crypto exchanges, from my experience, have a mix of:
- expensive trade fees
- low liquidity in the order books
- lack of charting features that work within Tradingview's website
- wide bid and ask spread
- lack trading tools such as stop losses
- high withdraw fees
- only a handful of coins to trade
Immediately after, I talk about how the goal of trading is to make money (obviously) and that by paying as little as possible in fees means that there's more in your pocket at the end of the day. As a side note, this is why low cost index funds are so popular and highly talked about by a lot of investors. I also address how a greater percentage return is needed to be made than the percentage loss in order to profit. Not sure how that works? Let's take a look at this table and an example with some numbers to get a better understanding of what I mean.
EXAMPLE: I just bought $1,000 worth of Bitcoin at a price of $10,000. Shortly after, the price of Bitcoin plummets to $5,000, i.e. 50% (like it did in March of this year). That $1,000 then becomes $500. Now in order for the value of my Bitcoin to get back to a break even of $1,000, the price of Bitcoin would need to go up 100% excluding fees.
Next, I go on to explain how I first buy stablecoins from Newton to then send off to Binance to trade. Lastly, I mention how PayTrie can be a good alternative as well if they're going to buy at least $200 worth of stablecoins (because of their $2 minimum and 1% fee) and if they need the coins immediately.
To put it in perspective from a numbers point of view with Newton and PayTrie, here's a comparison showing the fees associated with money coming out of my bank account to money going back in from trading on Binance:
As you can see there's a difference of about 1.2% - 1.4% in fees between Newton and PayTrie. Essentially, think of that fee as a convenience fee. This is why I always recommend using Newton first to those who are able to wait the 4 business days (pretty much 1 full week) for the funds to clear from the time you make a deposit on their platform. I personally don't mind waiting the 4 business days to receive my stablecoins but to each their own. Sometimes speed is worth more than the savings.
So pretty much that's how I personally trade. Buy stablecoins from Newton and then send them to Binance as I have yet to find a cheaper alternative to this method in Canada. It'd be great to have a one stop shop crypto exchange in Canada but unfortunately they can't compete with the bigger players in the space. Until the Canadian crypto exchanges get their act together and satisfy my needs, you know where I'll be trading.
One last note though, be mindful of the amount of crypto you leave on ANY exchange, including Binance. Only leave what you're willing to lose on whichever exchange you use.
Here are some additional videos on Newton, PayTrie, and Binance.
For those who prefer a video about this, here's one for you.
If you're interested in signing up with any of the platforms mentioned, click below:
Get $25 after purchasing $100 worth of crypto on NEWTON
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*I want to state that this post is based solely on my personal experience. You may have a different experience or opinion from that of mine which is fine. When I say BEST in the title, I mean that it's the best for myself and that I'm just writing this post as my personal opinion and that what I do may not be best for you.*