How to Trade Bitcoin: All You Need to Know

You have probably heard the name “Bitcoin” more than once in recent years, guess what? It was only created back in January of 2009. It is a cryptocurrency, meaning that it has no physical form. It is a virtual currency that follows the principle set by Satoshi Nakamoto.

The transactions made each day by bitcoins are recorded on a public ledger, which is the main driving force of the Bitcoin market. What makes bitcoins great is that it charges low transaction fees. Learn how you can trade with this cryptocurrency here.

How Does the Bitcoin Market Work?

The innovation of Bitcoin has introduced many other similar currencies in the crypto market. But unlike them, the market of Bitcoin is open for trade 24/7. Many fundamental and technical factors drive the price of Bitcoin upwards and downwards. The volatility of Bitcoin price is barricaded by two barriers: resistance barrier and support barrier.

If you want to do good in Bitcoin trading, you need to understand these terms. When it comes to support barriers, the cost of one Bitcoin won’t go under the price of the support barrier, which was set by the market. The same goes for the resistance barrier. The value of these barriers is mainly set by the supply and demand of Bitcoin.

So, if you know the value of these two barriers in the current market, you can easily predict where your Bitcoin projection will hit its peak and make profits out of it. That is how people trade.

If you look closely into the Bitcoin market, you will see two kinds of people: Investors and Traders. Investors invest in Bitcoins and traders trade with Bitcoins.

Aside from that, Bitcoin is not offered by any governmental body. It has decentralized authority. The Bitcoin authority is a set of computers around the world that runs Bitcoin codes and keeps its blockchain. Blockchain mainly refers to the collection of ledgers. Each block contains several transactions. Together, these blocks create a blockchain.

What is Bitcoin online Trading?

Bitcoin online trading is a short term strategy. Traders buy and sell Bitcoin in the short run whenever a profit can be made out of the trade. On the other hand, Bitcoin investors buy and hodl (hodl means holding Bitcoins in your wallet) Bitcoin for the long term.

Another main difference in the ideology between traders and investors is that investors think bitcoin will rise in value no matter how long it takes and traders do not care about how the bitcoin market is doing. They just do their technical analysis and do some short term trade for making instant profits.

Bitcoin trading can be divided into three categories based on their techniques: Day trading, Scalping, and Swing trading.

Day tradings are those trades that are opened and closed on the same day.

Scalping is a part of day trading that specifically focuses on short term trading that lasts from seconds to minutes. Day trading can take place for hours.

Swing trading is done by predicting the natural flow of price. The support barrier and the resistant barrier are parts of it. If you have managed to point out the starting of a swing by determining its support barrier and do the same for its resisting barrier, you will make a huge profit with this technique.

In this technique, you enter the market when the swing begins and exits it right before it reaches its peak. It can take days or weeks.

Advantages of Bitcoin Trading

The reason why people are engaging in Bitcoin trading is because of its volatility. Bitcoin value rises and falls many times in a day. These patterns are easily predictable using technical analysis. This means, you can make a decent amount of profit daily if you manage to anticipate them by just looking at the price chart.

Another advantage of Bitcoin trading is that the risk of trading is scaled down to a great level. So, if you accidentally incurred a loss in one trade, profits from other trades will cover up this loss for you. Bitcoin Investment doesn’t have the scope of making up losses instantly.

The Bitcoin trade market is open all the time, which is another advantage because you can enter the market whenever you want. For example, you are on a lunch break. You can just log in to your broker account using your mobile trading app and make some money with Bitcoin trading in moments.

How Do You Get Involved in Bitcoin Trading?

Now that you know the basics and advantages of Bitcoin trading, let’s see how you can get involved:

  • Open an account

The first thing you need to do is to open up a brokerage account that lets you trade with Bitcoins. Your criteria for selecting a broker should be the amount of fees they charge, the type of facilities, and leverages they are providing. Then deposit the minimum amount of money needed to buy Bitcoins.

There is an alternative method of buying Bitcoins, which is to use your wallet. There are a lot of trusted Bitcoin sellers like Coinbase and Coinmama. You can buy Bitcoins from them and deposit them in your brokerage account for trading.

  • Pick a trading strategy

As mentioned before, Bitcoin trading has three strategies: Day trading, Scalping, and Swing trading. You should take a look at the procedures thoroughly and pick the one best suits you.

  • Develop a plan

Nothing can be accomplished without a plan. If you don’t have a proper plan, you are not likely to get any profit from Bitcoin trading at all. Bitcoin trading plan should be based upon your strategy. Two basic things need to be set first: how much will you invest and how much will you earn?

Remember, always invest the amount that you are comfortable to lose. Because the crypto market is so volatile, you might even lose everything. Also, make sure to set a realistic profit target. Don’t give in to greed!

  • Invest and monitor

After devising a proper plan, it’s time to invest. In Bitcoin trading, you need to monitor the market all the time. Make sure that things don’t go south. You can use stop-loss, if available, to prevent huge financial losses.

  • Close trade and enjoy profit

If everything goes as planned, you will reach your target price quickly. Whenever it reaches there, close your trade and withdraw the money into your bank account. It’s considered safe to withdraw the money unless you intend to invest in your brokerage account again.

Follow these steps and you will make a good amount of profit out of Bitcoin trading.

Final Verdict

Bitcoin trading has a lot of advantages. It has reduced risks and instant profits. But that doesn’t mean you can enter Bitcoin trading blindly. Always remember to do your research and devise a proper plan. Remember to invest the amount of money that you are comfortable with losing!

Company Name: Flow Bank

Contact Person Name: Suchi

Country: India

Email: suchikoli98@gmail.com

Website URL: https://www.flowbank.com/en/research/should-i-try-online-trading