How to Protect Yourself

Trading bitcoin can be extremely profitable if you do it safely.

Remember the basics

• Learn as much as possible before you invest.
• Never invest more than you are willing to lose.
• If you invest borrowed money ("margin", "leverage", "gearing"), you can lose more than your initial investment.

After you have those down

• Carefully check and regularly monitor the reputation of any exchange where you decide to do business.
• Make sure all software on your system gets automatic updates.
• Spread your risk over different exchanges.
• Use limit orders.
• Start with small transactions.
• Never give all your capital to a single exchange.
• If you need to buy or sell a large amount, do it in parallel at different exchanges.
• If you must use a single exchange for a large amount, do it in smaller increments.
• Before you send or receive a large amount, always move a small amount first using all the same data. If things don't go perfectly, everyone will be calmer.
• Leave as little as you can on deposit at any exchange.
• Consider a reputable escrow agent for larger amounts.
• Don't trade derivatives.
• Don't trade with borrowed money.
• Keep it simple. More complexity means more risk.