Poloniex is a digital asset exchange based in the US. With Bitcoin, Ethereum and Monero markets, margin trading, and crypto lending, Poloniex offers a more anonymous service than regulated competitors such as Coinbase and CEX.IO, a fully responsive mobile site, and multiple-owner accounts. On the downside, the Bitlicense regulations prevent New York residents from using the exchange, and users cannot deposit or withdraw fiat currencies.
This guide will walk you through all the important site functions, from setting up your account to depositing funds, using them for day trading, margin trading, and lending, and withdrawing your profits to external wallets.
Opening an Account
Registering with Poloniex – for which you’ll have to use the desktop version of the site – is much like opening an account on any website.
- Click the link in the confirmation email sent by the site.
- Complete your profile for verification. Poloniex uses Jumio’s Netverify service to check identities and comply with Anti-Money Laundering (AML) and Know Your Customer (KYC) legislation. You must provide a name, address, telephone number and SSN (for the US), plus scanned ID – a passport, ID card or driver’s license for the US – that Jumio can verify.
- For security, set up 2FA (two-factor authorisation) from the tools menu (the wrench icon).
You need can’t trade or lend until you have money in your account. Poloniex only accepts crypto deposits at the time of writing, so you’ll need bitcoins or altcoins from a wallet, a third party or some other source.
- Click Deposits & Withdrawals on the Balances menu.
- Choose the asset to deposit.
IMPORTANT: crypto wallets only work for their own coins – you can’t send BlackCoin or Bitcoin Cash to a Bitcoin address. You will lose coins sent to the wrong wallet, so double-check before sending!
- Send funds to the displayed address.
- Wait. You have to wait for your deposit to be mined and confirmed, like any other crypto transaction. Wait times depend on which asset you’re depositing and the current state of the blockchain – Litecoin will confirm before Bitcoin, for example.
Withdrawing funds works the same way, sending your desired amount of the selected asset to a wallet address, whether it’s on your device or another exchange.
Poloniex uses up to three wallets for each asset.
- Click Transfer Balances on the Balances menu.
- You’ll see a table of crypto assets with three columns for the different wallets: Exchange, Margin, and Lending. The other table is for margin trading (see later).
- Exchange wallet funds are for day trading.
- Margin wallet funds are for margin trading.
- Lending wallet funds are for loaning to margin traders (for interest).
You can only move available funds. Assets on loan or tied up in orders are locked.
You can only move between wallets of the same currency (i.e. you can’t move assets from your Bitcoin wallets to your Monero wallets).
Now that you have funds in your account, you can get to the good stuff – trading!
- Click the Exchange menu.
- Choose your trading pair tab. Poloniex offers Bitcoin (BTC), Ethereum (ETH), Monero (XMR) and Tether (USDT) pairs.
- Watch the trading pair display’s flashes of color as the exchange rates fluctuate. A red highlight indicates falling value; green indicates a rise. The yellow highlight is your current pair selection.
- The chart shows your selected asset’s progression over time, with today’s last price and 24-hour change, high, and low above, and further analysis tools below.
- Scroll down to the buying and selling options.
- Buy Asset is a simple trade: set your price and how much to buy. When someone sells at that price (shown in the Sell Orders table), the trade completes. There’s no time limit, so you can set low buys and wait for the price to drop, though you’ll lock the buying funds in your exchange wallet until the purchase completes or you cancel.
- Stop-Limit is a way to protect yourself against crashes and take advantage of rebounding assets. It’s quite complex, but Poloniex has an excellent page explaining the concept.
- Sell Asset is a simple sale: set your price and how much to sell. When someone offers to buy at that price (shown in the Buy Orders table), the trade completes. Again, there’s no time limit, though you can’t move assets on sale to another wallet.
Margin Trading is speculative trading with other people’s money, offered through the Lending option.
- You move funds into your margin wallet.
- You “go long” when prices will rise. Fill out a Buy Asset order on the Margin Trading page.
- How much you can borrow – your Tradeable balance – depends on your funds, market conditions and your open trades.
- Choose how much to buy and the highest daily interest rate you’re willing to pay. You’ll automatically take loans at the lowest possible rate.
- Place the margin buy order.
- You buy more of the asset than you can afford, with borrowed money. The price goes up and you sell, repay the loan, pay fees and keep the rest as more profit than you’d make using your own funds on simple trades.
- If the loan expires before you sell – the minimum lending period is two days – your interest rate may change as it auto-renews, so be careful!
The opposite is to “short” an asset, when you believe prices will fall. You sell assets you don’t own at the current price (borrowing them from lenders), then buy them back at the lower price, pocketing the difference as profit.
The Lending option allows you to offer your assets to margin traders in exchange for daily interest. Poloniex has systems in place that make lending far less risky than other forms of trading, though there is still a tiny possibility of losing everything if the whole crypto market crashes dramatically!
For the safe player, margin funding is a great way to build on existing assets without taking any of the day trading risks.
- Move your asset to the lending wallet.
- Go to the Lending page.
- Choose your asset from the My Balances table.
- Fill out the form: daily interest rate, how much to lend and for how long (2-30 days).
- Mark Auto-renew to automatically offer your funds every time they’re repaid.
Like any good exchange, Poloniex provides a full history of every transaction. You can check your history from two separate options:
- History on the Balances menu shows all your deposits and withdrawals, for any asset, with export options for your external bookkeeping.
- My Trade History & Analysis on the Orders menu shows all your asset trades. Poloniex offers excellent data controls on this screen, from date, asset and activity filters to automatic analysis of your activity and exports for trades, lending and borrowing.
This is a very brief overview of the complex functionality Poloniex offers. For experienced traders, the site displays all the necessary data to make informed decisions. For the newbie, the interface makes getting involved smooth and easy. Explore all the options, make use of the excellent support resources, and enjoy your foray into the world of crypto trading. Here’s to your profits!