Ok. Thanks for your reply. I just have 1 key question
Say you buy your 1st bitcoin off bitstamp for 650usd. You then go and list it on localbitcoin, but the going price is now 600usd. So you sell it on localbitcoin for 600 and then immediatley go to bitstamp and buy another btc for say 580. You then put it onto localbitcoin but the going rate is 550. So you sell it for that and then buy more on bitstamp
If this was to happen I think you would lose money (?). Is this correct or is there a way around this?
Many thanks
I would hold off until you can make a profitable trade, unless you're going to write up your loss as "trust building" for feedback.
E.g. if you have already got 1 BTC which cost US$650 then use a localbitcoin price equation of something like max(665,bitstampusd_ask*1.05) and just wait. The *1.05 part is adding a 5% margin to the current ask price on bitstamp, you can set this to whatever you like. You make your own equation based on multiple price calculations see:
https://localbitcoins.com/guides/equation-howtoPut US$650 (or more) into your bitstamp account and have it ready to purchase more when you get a trade. Never sell at a loss unless you're exiting Bitcoin forever never to return.
Your risk is that you might end up holding onto bitcoin for awhile. Most sellers don't mind this as they believe the price will continue to rise.