Well, as many beginners would put it, if you want to get rich quickly, then go for bitcoin. But when they get there with that mind-set, they live to regret it. Just like any other market that involves currency, you got to make proper plans and working strategies before venturing into it. Bitcoin is arguably the most respected as well as highly traded Cryptocurrency in the world.
When it comes to Bitcoin trading, it refers merely to buying low and selling high. However, many people tend to confuse investing and trading. Comparing to the past years, bitcoin value today is increased a lot. To be precise, trading involves predicting price movements while investing in holding Bitcoin in the long run. The main reason why global traders love Bitcoin trading is because Cryptocurrency allows for maximum results when it is volatile. This happens because it has several ups and downs.
In a nutshell, Bitcoin trading ways include; opening an account on a Bitcoin exchange, verify your identity, fund the store and buy Bitcoin. The following are detailed four ways on how to trade Bitcoins:
Decide on how you want to deal with Bitcoins.
When you want to deal with Bitcoin, there are two ways to do that. You either decide to but the Cryptocurrency itself or speculate on its value without really owning the token. You can put a small deposit and later get a much more significant position. This is because a CDF, a leveraged product, enables you to trade a contract based on the market prices. That sounds interesting. Well, it’s never a sure bet since you can have your profits magnified and encounter the same effect on your losses. Whenever you choose to trade Bitcoin CDFs, then start to put a smile on your face since you don’t have to go through the stress of having to interact directly with an exchange. Bitcoin exchanges enable investors to buy or sell the Cryptocurrency from one another.
Search for factors that move Bitcoin price
The most important question here is to know what moves the prices. Since the Bitcoin market, unlike other markets, never closes, it makes it risky to speculate on. Its costs can shift suddenly at any time of the day. This is why it’s essential to learn about the factors that move prices and several risks. For more information, Crypto Head has a lot of helpful articles too. The following are factors that may affect the price:
a) Major events
Several key events occur, which may have a severe impact on the Cryptocurrency. These events include macro-economic setbacks, regulation changes, and security breaches, to mention a few.
b) Bitcoin supply
Usually, the supply of bitcoins expected to be mined in a particular period is likely to fluctuate with availability. This is due to the rate at which those bitcoins enter the market and the activity of those who hold them.
c) Bad press
Just like all currencies, Bitcoin is usually affected by the perception of the public. This is a significant factor that moves prices in the Bitcoin market.
Choose a Bitcoin trading strategy
Well, to be sincere with you, venturing into the Bitcoin market without a goal or strategy is like waiting for a ship at the airport. Here are three proven strategies that may help you trade bitcoins.
This is a form of market manipulation where you buy bitcoins immediately before recommending it to others, thus driving the price up.
b)Day trading Swing trading
Here you only go for this strategy if you want to take advantage of short-term opportunities in the bitcoin market.
c) Automated trading
In this strategy, you make sure your trading processes react to the switching conditions that exist in the market on your behalf.
Make your first Bitcoin trade
Are you wondering how to go about bitcoin trade for the first time? Well, scratch your head no more. All you need to do is follow the following steps keenly.
1. Open an account
Opening an account on a bitcoin exchange such as Bitstamp is always a step ahead. This can take you a few minutes to set. Make sure you verify your identity and also deposit money on your account. From there, you can buy or short sell. Remember, this does not apply to you if you were not to buy and sell bitcoin.
2. Build a trading plan
Make a trading plan essential in making sure that you set or make the right decisions while trading and help you meet your set objective. The steps to creating an action plan include;
- Be clear on what you want to achieve.
- Make sure you quantify your goal. How much are you anticipating to risk in specific?
- It is always good to set goals that are flexible and challenge yourself. Always pick a risk-reward ratio.
- Your goals should be able to fit within your ultimate plans while trading.
- Be specific on the particular period you want to achieve your goals in the bitcoin market.
3. Do your research
Before you venture into any trade, you ought to do thorough research about it. For you to understand what’s next for the cryptocurrency price, make sure you are well conversant with what’s going on in the bitcoin news and all that which it entails. Make the internet; your best friend is looking for past information about the market.
4. Place a trade
After you settle for your position, deposit the amount you want to trade with. Use stops and limits are good risk management in bitcoins trading. You can set a visit to end your position if the market goes or moves against your favour or a limit when it moves in your turn. When you expect the bitcoins to rise in value, you buy the market, and if you think it will fall, you sell.
In the Bitcoin market, many people go with a mind-set of getting quick money. These people stop trading after a short while, and the apparent reason is that they don’t successfully make any money. If you want to be successful in trading, you need to acquire the necessary skills and put all your efforts and time before venturing into it. Follow the above ways of trading bitcoins, and you will surely make it.