STEP 3 – Create a bitcoin trade advertisement

You can do this right away or wait until you have been verified by Coinbase. On LocalBitcoins, click “post a trade” in the menu. The form is pretty self-explanatory, but there are a few suggestions:

Payment method. I did my experiment using cash deposit. It’s very safe and deposits show up instantly on your account Premium. the easiest way to set your price automatically based on a Bitcoin exchange is to use this field. For instance if you put 5%, your price will be set at 5% more the current exchange rate on Bitstamp. If you decide to use this I suggest you to stay around 5% premium. Price equation. this is what I used to set my price. I experimented with a few formulas and I think the one that performed best was (mtgoxusd+bitstampusd+btceusd)/3*1.02 (2% premium over the average of the exchange rate of Mt. Gox, Bitstamp and BTC-e). Your goal is to sell at least 5% more than the exchange rate on Coinbase, since by doing so you’d have a

3% net profit (both Coinbase and LocalBitcoins have a 1% transaction fee). Min. amount. I’d set this at least $100 to avoid small wasting time transactions. I ended up setting my at $300 but at the beginning you’ll need those $100 transaction to build a positive history.