Trading is not a simple task to do especially when it is the case of bitcoin a lot more factors include. For seasoned traders catching the new idea and various factors of BTC offer are easy but, for the newbies, it is a real hard job. You can go through some of the best trends from the financial experts and go through some of the websites to get the best value for money.
What is bitcoin trading?
Trading generally means the transfer of goods and services in exchange for value from one person to another. So, bitcoin trading means buying and selling bitcoins in exchange for fiat currency or other cryptocurrencies.
Bitcoin trading is actually investing in bitcoin for a short time. It is a short-term process or a middle-term process. In long term, it is more like an investment. Even, some trading methods also include several trades in a single day.
Bitcoin trading strategies
To become a good bitcoin trader you must know about the different strategies that experienced traders follow. A good strategy will always help you exit a trade with some extra income.
- Day trading: If you follow the price graph of bitcoin you can see bitcoin’s price is so volatile that it fluctuates within a day most of the time. Day trading is a strategy where traders use this intraday price fluctuation of bitcoin to make a profit. The duration of day trading closes over a single day, so you need to close the business fast within a day.
- Scalping: Scalping is a type of day trading but it is done in a very short time such as 1 minute or 5 minutes. This is more frequent trading where gains are smaller but the risk is also lesser than the day trading. Scalpers need to understand the market carefully and they always fix a suitable entry and exit point based on their understanding.
Range trading: This is a short-term trading strategy where experience plays a good role based on which traders like to analyze two factors such as resistance and support. Resistance in an upper level above the current price up to which bitcoin’s price can go.
- High-frequency trading: This trading strategy would be easier for advanced traders than beginners because they need knowledge about algorithms, mathematics, computer science, and an understanding of complex market concepts. Traders develop such algorithms that help them quickly enter and exit a trade to avoid risk.
These are the four most used bitcoin trading strategies. Besides these, try to diversify your trading portfolio with other well-performing cryptos too to avoid maximum loss. It is generally advised not to spend anything in a large amount when you go for Bitcoin trading.
Trading guideline: Let’s know about the bitcoin trading guideline with quick and easy steps.
- Registering: The first thing you need to do is to find a good trading platform by researching their reviews and reputation. If you want an easy but popular platform you can go for the Bitcoinx Software This state of the art software makes it easy for you to trade in cryptocurrency. You cannot undermine the effectiveness of news and updated Info of the crypto market. With this app you can trade and also get all the updates on the trading market. Once you find the best platform register here by going through a small ID verification process.
- Opening trade account: When you are done with registration a bitcoin trading account will be opened where you will trade.
- Fund the account: Now you have to link the trading account with your bank account and transfer some initial money to the trading account so that you can buy your first bitcoin.
- Buy bitcoin: once you have a balance in the trading account you can select a buy order. You will have two options such as market order and sell order. You can choose any of them to buy bitcoins. Or, if you are trading in peer-to-peer platforms you can directly buy from any seller.
- Sell bitcoin: After buying you need to hold the bitcoins until the price goes high. It can be a minimum holding period like scalping trading. Then you can sell the bitcoins with the same process you bought them, you just need to select the sell order.
Bitcoin trading is easy for those who practice it with small steps and analysis. One must thing every new investor needs to know is that the entry and exit points are vital. You must enter the market when the price is low and exit it when you see a price hike so that a profit can come.