How to Trade Bitcoin - Learn Bitcoin Trading

If you have been following the news you will know that bitcoin is one of the most sought-after cryptocurrencies. Bitcoin, the first cryptocurrency has come a long way since its launch in 2009. The price has seen many fluctuations which can be attributed to several reasons.

How to Trade Bitcoin

However, if you wish to make a fortune, then you need to trade bitcoin. If you are new to this, it is vital that you know the basics of bitcoin dealing as well as the factors that might affect the price, and trading strategies before you venture into deep waters of bitcoin trading.

What can cause the bitcoin price to change?

Movement of the value of cryptocurrency bitcoin offers a great way to make some money. However, to make a profit you need to know how and when can the price change. 

Moreover, the price change is often sudden and dramatic. Since the bitcoin market operates 24x7, this can occur anytime, making dealing with bitcoin a thrilling as well as challenging thing.

Unlike other currencies that are affected by the economic and political conditions prevalent in the country, the value of bitcoin is not changed due to these factors. The reasons for any movement in the bitcoin prices can be attributed to the following facts.

  • Bitcoin supply – There are 21 million bitcoins which will be mined by 2040. Since there is a limit to the number of bitcoins, their availability fluctuates depending on the rate at which they enter the market as well as what the owners of these bitcoins do with the cryptocurrency.
  • Market cap – The value of the cryptocurrency depends on how valuable people think it is. Thus, it can be easily influenced by traders, who can short it as well as create an inflated bubble.
  • Bad press – Public perception can change the fortunes of any currency and bitcoin is no exception.
  • Industry’s response – Currently, the cryptocurrency is not favored by most businesses across the world. Integration of the currency into the payment system and crowdfunding platform (like traditional currencies are used) will go a long way in enhancing the worth of bitcoin, especially in a corporate setting.
  • Major events – Any major changes in policies across the globe like security breaches, regulation changes or macroeconomic setbacks can have an effect on the value of the cryptocurrency.

Different Bitcoin trading strategies

If you wish to deal in bitcoin, there are two ways to do it; either buy it in order to sell it at a profit or guess its value without investing in it. The latter is how CFD works, You can also try BTC SuperStarThe various strategies involved in bitcoin trading include.

  • Day trading –This is based on short term movement of the cryptocurrency where you close at the end of the trading day. This is beneficial if you wish to make the most of the short-term opportunities in the bitcoin trading market.
  • Swing trading – This involves catching hold of the trend and holding your position till the trend continues or signs of reversal are seen. This is the best strategy if you wish to capitalize on market gains.
  • Scalping – As the name specifies, you make frequent intraday trades and gain from minor price movement. This technique works well for people who wish to make continuous profits rather than wait for a major breakout.
  • Automated trading – You can automate the trading process to cater to changing market conditions. This works well for passive traders who do not have the time to follow the upheavals of the market.

How to Trade Bitcoin?

A bitcoin exchange works in a way like traditional exchanges. Investors can buy or sell the cryptocurrency from one another. However, unlike traditional exchanges, these lack proper regulation and public records.

Additionally, the servers and matching engines are unreliable, and they impose a fee restriction on funding and withdrawing from your exchange account. The various steps involved in bitcoin trading are.

  • Opening an IG trading account
  • Building a trading plan as per the strategies mentioned above depending on your financial goals and acceptable risks.
  • Research before investing your money in the cryptocurrency. It is better that you know the latest in bitcoin news to assess price trends before placing a trade.

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