How to Trade Bitcoins: A Detailed Guide
Bitcoin has become one of the most popular cryptocurrencies in the world. Since it was introduced into the digital currency ecosystem, demand for BTC has been gaining traction over the years. To trade Bitcoin, you simply have to create an account on a cryptocurrency exchange platform.
Trading bitcoin is like buying an asset, holding then check out the rise and fall of the price. You can later sell it out when the price goes up. The key element of trading BTC entails buying and holding Bitcoins then selling out when the price goes up. The highly volatile cryptocurrency presents an interesting twist in the forex industry.
Besides trading Bitcoins based on exchange, you can choose to trade based on price movement via CFD trading. In this case, you predict the prices of Bitcoin on whether it is likely to fall or go up. When trading BTC, traders are likely to reap big from shifts in prices. This is what contributes both to high risk and appeal factors.
However, various forex brokers accept trading Bitcoin against fiat currencies. This makes Bitcoin one of the most popular digital currencies. So, how do you trade Bitcoins? This article gives insight to individuals who’d want to learn how to trade Bitcoins.
Methods of trading BTC
Bitcoin trading is grouped into two main categories. The first category entails buying bitcoin when the prices go down with an expectation of selling when the prices go up. This process can be unreliable since it predicts the rise and fall of prices based on Bitcoin exchange matching servers.
The second process relies on forecasting the price shifts without necessarily owning the currency. This approach is mainly done via a CFD trading account.
Trading Bitcoin during the day
Day trading is a trading system where traders buy Bitcoins and sell within the same day. In this case, traders trade on a short-term basis expecting to leverage on price predictions to make a profit. Generally, day traders close down all their trading activities done during the day to ensure no trading is carried out at night.
Typically, day trading is one of the most ideal options for traders interested in building a solid career trading currency. Though a bit technical, new trader can easily learn the ropes through mentorship. Day trading can be perfect for dedicated traders willing to spend time to analyze price fluctuations.
Swing trading Bitcoin
This trading system is where BTC traders purchase and sell out Bitcoin based on the prevailing market conditions. In such a scenario, a trader buys and holds BTC and only sells when the prices go up. Unlike trading during the day where a trader closes all the trades at the end of the day, swing traders can hold the assets as long as possible till the prevailing situation changes. Visit bitcoin-equaliser.com to start investing in bitcoins.
Traditionally, swing traders capitalize on existing market conditions to make a profit. Traders who prefer this type of approach mainly invest time in technical analysis of the price trends than analysis of market data.
On the contrary, day traders are likely to make a profit than swing traders since they hold their assets for longer periods than their day counterparts. This makes swing traders prone to incurring losses in the process.
This is a trading strategy where traders place trades over a shorter period. These types of traders tend to leverage on small market movement to make quick profits. On the flip side, Bitcoin scalping requires urgent attention to price movement to exit and avoid losses.
However, the danger of this type of trading method is that it exposes your assets to high risk since you may end up losing all your investment.
How do you start trading?
New traders may find Bitcoin trading a bit challenging. The following are a few steps you can follow to venture into BTS trading to kick start your trading venture.
1. Create a CFD CMC account
To start trading via CFDs, you simply have to create an account on the CMC markets platform. It is advisable to start trading with a demo account before going live.
2. Layout a trading strategy
Carry out in-depth research to understand how you are going to trade. This will help you come up with an informed trading strategy.
3. Define your trading strategy
It is vital to define your trading plan. This helps you make objective decisions based on what you gathered before you started trading.
4. Monitor the market
While trading, it is necessary to monitor the market conditions to understand how best to trade. Exercise a great risk management strategy by closing trades that are likely to make losses.
Trading Bitcoin can be complex and challenging for beginners. Mastering the art of trading is ideal to help you minimize chances of making losses. Therefore, the concepts highlighted in this article are crucial in helping you have an adventurers Bitcoin trading experience.