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Learn valuable Bitcoin trading skills and any information you may need about cryptocurrency. You should be aware of all the basics if you want to become a Crypto investor.
The Complete Guide to the Basics of Bitcoins Trading
Bitcoin is not a new thing for us. It was created in 2009 and was the first cryptocurrency to be used to make secure transactions. Over the past few years, it has managed to gain popularity as a digital currency that can be used to make payments anonymously. Due to the increasing popularity, like in casinos and other industries, its demand keeps growing, resulting in more people having an interest in trading. Most people look at it as an easy and fast way to make money, but it comes with risk of losing money as the bitcoin can lose its value at any time. This can lead to you to losing your money rapidly.
What is bitcoins trade?
Bitcoin trade is the process of monitoring and making assumptions on expected shifts in the cryptocurrency price. This process involves crypto traders speculating on when the price of a Bitcoin would be favorable and safe to trade in order to make the most profits.
Bitcointrading can also be done through purchasing bitcoins for exchange, having the hope that the prices will rise in the market and you sell the cryptocurrency for a profit.
How to monitor and make speculations
Most bitcoin traders use financial derivatives like CFDs and others. CFDs work by enabling a trader to speculate the changes in the price of a Bitcoin at a particular time.
is it safe to take part in cryptocurrency trade?
Since it is just like any other investment, it can prove to be very risky. But if done correctly with a good risk management strategy in place, one can make a lot of money by trading at the right time. The trade requires one to be always keen on the rise and fall of the price. To become successful in this trade, you need to learn its basics and how to get past the risks that come with it. With the bitcoin getting so much plug all around and the promise of making so much profit should not influence you to get more bitcoin because retail investor accounts lose alot of money when the price falls.
What causes the changes in prices of the bitcoin?
● The press: When the press says something about bitcoins, it can affect the market prices significantly, depending on the perception they give the people. Negative news leads to lower prices because a lot of ivestors try to selling bitcoin rapidly due to leverage
● Bitcoin supply: With the finite number of bitcoins currently available (approximated to be about 21 million), which is expected to be exhausted by 2040, there might be an increase in bitcoin prices in case the demand rises over time.
● Its adoption and integration: As bitcoin continues to be adopted by businesses as a new payment method, this will increase the public’s demand for cryptocurrency. It is projected that its demand will increase in the coming future, which will lead to a positive increase in its price.
● Changes in critical events: Changes in regulations since the government and banks do not regulate the cryptocurrencies may affect the prices. Also, announcements on various aspects of the cryptocurrency like its security and how it performs may impact its value, either a positive or a negative change.
How to trade Bitcoins
If you want to take part in crypto trading successfully, there are some critical decisions and steps one needs to undertake in order to get the most suitable trading platform. And the first thing you need to figure out is how to buy the bitcoins.
Choosing the method of bitcoins trade
There are only two major ways you can trade bitcoins, and the first one is buying bitcoins through an exchange to sell later for profit and trading through the bitcoin derivatives. This involves making speculations of the shift in prices without owning the bitcoin.
Acquiring bitcoin through the exchange
Here, you take direct ownership of the bitcoin with the aim of holding it till the price rises so as to trade with a profit. Through this method, one can come across problems like;
● Cybertheft: Theft and hacking are widespread in cryptocurrency exchanges, and very many investor accounts lose money when hackers get their access.
● Bitcoin exchanges don’t have proper regulations, thus resulting in scams.
● Unreliability of the exchange servers and matching engines leading to exchange markets being suspended.
Trading through bitcoin derivatives
This involves using bitcoin CFDs. CFDs are complex instruments used in speculating the prices without having to own the bitcoin. This method is very advantageous as CFDs are traded with leverage, where you only pay the deposit, and you get to explore the full market. This can be seen as a good idea, but it comes with the risk of losing money rapidly due to leverage.
Choosing a suitable trading strategy
When choosing a trading strategy, there are some things you need to consider, like your experience level, the amount of capital invested, and the free time one has. Depending on your reasons for starting, one needs a strategy that suits them without causing any inconveniences on their routine. Below are some of the commonly used strategies.
● Day trading: If you are looking to gain from the short-term price movements, this is the strategy for you. This is where one makes the bitcoin trade during the day and closes all their positions when the trading day comes to an end. It leaves you not exposed to the market overnight and greatly helps to avoid overnight charges on your position.
● Trend trading: This is where one sticks and holds to a current position trending on the market until there is a change in the trend. If you are using this trend, you can hold on to a position for days or even weeks and sell your bitcoin when it changes. This strategy has a higher risk of losing than day trading.
● The bitcoin hedging strategy: This is the strategy to take if you are looking to reduce your risk exposure. If you are worried about the market not going your way, you can take the opposite position to the one you already have open.
● Scalping bitcoin: This strategy will enable you to take advantage of the small changes by placing many trades over short periods.
You finally monitor and trade in the bitcoin market.
Benefits of cryptocurrency trade
● One can start with low deposit amounts.
● It is very secure to trade in bitcoins as you don’t need to expose your personal information to transact using bitcoins.
● Very few or no restrictions since bitcoins are not regulated by the government and banks.
● Bitcoins are a form of digital assets
Disclaimer: This article is not investment advice or an investment recommendation and should not be considered as such. The information above is not an invitation to trade and it does not guarantee or predict future performance. The investor is solely responsible for the risk of their decisions. The analysis and commentary presented do not include any consideration of your personal investment objectives, financial circumstances or needs.
Risk Warning: Our products are traded on margin and carry a high level of risk and it is possible to lose all your capital. These products may not be suitable for everyone and you should ensure that you understand the risks involved.