Bitcoin trading is not rocket science if you know how to go about it. Once you learn the simple tricks you can easily make profits through trading Bitcoins. The cryptocurrency has a history marked by price volatility that has actually drawn more and more investors and media interest in this ecosystem. To start trading in Bitcoins, it is important to first decide how you wish to deal Bitcoin, study the factors influencing its price, select a Bitcoin trading strategy, and then make the first trade.
Dealing with the Bitcoin:
You can use 2 ways to deal with the Bitcoin; you could either buy it with the ultimate hope of selling it for profits, or you could speculate on the value. The CFD will allow you trade contracts based upon prices; so, you can make a minimum deposit at first and then gain or lose more. If you trade Bitcoin CFDs, you will not interact with exchanges. You will simply buy or sell prices that are obtained from different exchanges for you.
Bitcoin exchanges will run similar to traditional exchanges and allow investors to buy from it and sell it to another. If you can remove them from the equation you can gain many advantages. These exchanges do not have proper rules, infrastructure and public records to react fast to requests. Their servers may be unreliable and this can suspend the markets. They will charge fees and impose limits on funding or withdrawals from the exchange.
Factors affecting Bitcoin price:
Bitcoin is volatile and that makes it attractive for investors. At the same time, it is risky and the prices can go up or down drastically. Since it is decentralized it is not bound by political or economic concerns, like the traditional currencies. You must remember that Bitcoin has a finite supply of 21 million and all of this will be mined by 2040. The BTC market cap will influence traders as they will look at it to cash in on a swelling opportunity. Since all currencies are affected by media and press reports, the Bitcoin is no exception. This is why its security and longevity has always been under the scanner. Bitcoin has still not been accepted by businesses all over the world, and this will have a big impact on its status. The invention of automated trading applications speeds the process of trading; for an example read this bitcoin billionaire review which is one such automated software. Any key event like security breach, regulation changes, or macroeconomic setbacks will affect its price. Whether Bitcoin gets integrated into the new payment systems and crowd funding platforms are going to have an effect also on their price.
Trading strategies:
- Day trading is when you take a position depending on expected short-term movements and close at the end of the day.
- Scalping is when you place frequent intra-day trade on the minor price changes.
- Swing trading is catching the moment these form, and then holding onto this position till this trend runs its entire course.
- Automated trading is for automating processes in order to respond to market changes in your absence.
These are the few steps to get started with Bitcoin trading. Once done, you can open an account, select a trading plan that highlights your trading goals, determines your risks, identifies the markets for trade etc. You can then do research, analyze Bitcoin charts to predict price behavior, to start trading. Finally, you must place a trade once you have determined your position. You enter the amount that you wish to stake and define close conditions.