Therefore, buying and selling of bitcoins has become one of the most
lucrative and efficient methods of investing in virtual currency. Below is a step-by-step
guide that will be offered to the new trader to enable him or her trade Bitcoin
to make it easy for him or her.
What is Bitcoin Trading?
Buying and or selling Bitcoin with the view of making a profit from the
conducted transaction is referred to as Bitcoin trading. The conventional stock
exchanges work in accordance with a specific schedule of the trading period
within a single day, and the Bitcoin is traded over the Internet, which means
that the implementation of transactions can be done at any time of the day.
Below are some of the ways that traders can use to trade in Bitcoin; day
trading, swing trading, and investing in the asset in the long run.
Why Trade Bitcoin?
1. High Volatility: The cost of a given bitcoin is not fixed
and it changes from one time to the other which is very much suitable for
trading purposes.
2. Market Accessibility: Here it is important to note that
Bitcoin market is quite active and anyone is allowed to trade at any given time
because the market is an open one.
3. Potential for High Returns: This process of Bit coin
trading is very beneficial if one is conscious of the procedure to follow in
the process.
Steps to Start
Bitcoin Trading
1. Educate Yourself
Before one can physically go into trading of Bitcoins, one is advised to
spend some time and find out what a Bitcoin is and what a blockchain is. Some
of the articles, videos and courses that may be of help in the process of
gathering information are;
2. Choosing an Exchange to Trade With
In the case of defining a Bitcoin exchange one can say that it is an
online platform or an application where the process of trading Bitcoin takes
place between two parties; two people or between one person and a program. Some
of the most popular exchanges include: Here are some of the most popular ones:
Coinbase: It is defined by having an intuitive and simple
interface and very efficient settings concerning the security issue.
Binance: It provides the trading of a large number of
cryptocurrencies and has many characteristics of the trading process.
Kraken: It is also known for its affordable prices and that
the clients’ information is saved.
Before choosing an exchange there are some factors that one has to
consider and these include; the level of security, the fees that are charged,
the interface, and the number of cryptocurrencies that are available.
3. To sign up for the Website and Disprove the Statement That You are a robot.
Now, that you have decided the exchange you are going to trade with you
have to open an account for the exchange you have selected. This Typically
requires the user to input their email address, create a password and then
confirm his/her identity through the identification scan. This is a condition
that is put in place to ensure that any and every legal aspect concerning your
account has been observed as well as ensuring the security of your account.
4. Deposit Funds
The next step after confirming the account is funding the account as this
is the only way one can be able to trade in the account. It is common for
almost every exchange to allow the depositing of funds in fiat money such as
the US dollars, Euros, and Great British Pounds. Real money account allows a
player to make deposits using a bank transfer, credit card or any other method
that is available in the payment options list.
5. Choose a Trading Strategy
There are several trading strategies you can employ, depending on your
risk tolerance and investment goals: In trading, there are single techniques
that may be effective at a certain time depending on the client’s risk
tolerance level and other objectives:
Day Trading: This is the process of buying and selling of
securities in the same day in an attempt to make a profit from the variation in
the price.
Swing Trading: This entails having positions that may perhaps
take several days or even weeks before one can get a return on his investment
due to the medium-term price trends.
Holing: This is what is referred to as the buy and hold
strategy where one takes a position in bitcoin and holds on to the position as
an investment regardless of the short-term price swings in the bitcoin.
6. Start Trading
Once the money has been put in the account and the strategy of operation
chosen, one can proceed to the trading process. Here are a few tips to keep in mind:
What you should always keep in mind is:
Start Small: For the beginner it is suggested that he or she starts
trading with a small amount of money that he or she can afford to lose.
Use Stop-Loss Orders: This will help in prevention of loss;
they will place the stop loss orders at which the Bitcoin will be sold at
automatically.
Stay Informed: That is why it becomes important to be in a position
to understand what is going on in the market to be in a position to trade
well.
7. Record Keeping of Your Trades and How to Tweak the System.
Bitcoins can be exchanged and when this exchange is in progress one has
to pay attention and very often switch strategies. This is why it is
recommended for the trader to document all the trades he or she makes and also
be ready to change the strategy used when the market changes. The following
tools are expected to be quite helpful; Technical analysis, Market indicators,
Trading signal.
Conclusion
This is a rather exciting form of trading in bitcoins and one can make a
lot of money in the process. In other words, if people receive proper
information, choose a good exchange platform to trade, and design a proper
plan, they will not commit some common trading mistakes. First of all, one has
to make sure that they are informed at the same time switch their strategy as
and when the market changes in order to be in a position to get as much as
possible from the said market.