A lot of people are intimidated by the idea of Bitcoin trading. It’s like a fluke you avoid once it comes up in conversations. But, it’s not really as daunting as it seems.
Looks can deceive. Bitcoin trading is actually very simple. It’s a very straightforward and no-brainer process. It’s also very volatile which has enticed a lot of investors, traders, and even heightened media interest into the crypto space.
In effect, each time the Bitcoin price would go up, new speculators and investors would want to dip in. Anyone can do Bitcoin trading but how do you win it like a pro?
This Bitcoin trading guide is created to simplify how it’s done and refine your trading agility so you can amplify your wins and reduce losses.
Why Trade Bitcoin?
Bitcoin is the first of its kind. There are so many factors that make Bitcoin the king of Cryptocurrency and it’s not just because it’s the originator but it’s because of these facets that make it irresistible to any smart trader or investor.
Exchanges Operate 24/7
Unlike the stock market operations that depend on the working hours of each location, Bitcoin exchanges are open 24/7. Literally, the sky is your limit! You can buy and sell or trade Bitcoin at any time of the day or night as you wish.
It’s Not Equal to Fiat
The very reason why Bitcoin was created was to disrupt and challenge the status quo or limitations of fiat money. Bitcoin has no boundaries and no single entity has control of the digital currency. Bitcoin’s price and value are hedged on different events.
Highly Volatile Nature
A lot of experts refer to Bitcoin as the “purest form of speculation” because its store of value is erratic or highly volatile. It’s the adrenaline rush or Bitcoin belief system that impacts the price of Bitcoin.
The prices move up and down at a rapid pace. The frequent and fast price movements allow traders to make that quick buck!
What are the Best Ways to Trade Bitcoin?
There are many ways to trade Bitcoin and other digital tokens. Your choice would depend on your financial goals or what you aim to get from your investments as well as the time you want to allocate for Bitcoin trading.
If you want to trade looking to hit the jackpot with short-term trading opportunities then this is for you. Daily events can shake Cryptocurrency or Bitcoin pricing and these patterns are what you should be paying close attention to.
Day traders are usually able to open and then close trading positions in a single day.
Market momentums should be your core. With this trading strategy, you get to focus on the micros or the small gains in short-term opportunities while cutting the losses.
Swing traders would usually look at the timing or trends in the price movements. They would hold onto it and then trade when the trends makes reversals or shifts.
This strategy suits traders who want to do it as a primary trading strategy or as a supplement to your existing strategy with the aim to diversify.
To do this, you have to make several day trades on cue with small price movements so that you make small yet frequent profits and then compound them.
This is a great fit for traders who want to buy and hold for long-term. Unlike abobe types of trading, this one would involve trading or buying and selling that last for many days, weeks, months, or could even take several years.
Understanding Fundamental Analysis vs. Technical Analysis
If you are new at trading or a seasoned trader, you should keep these crucial tools handy.
The key here is to look at the macro or the big picture rather than focus on the micro like price movements. So, you should basically look at the following:
- What are the current or ongoing developments for the project? Take a dive into the developers’ activities or schedules.
- Basically, if there is a mainstream company or platform that would be integrating Binance then that would also impact the price. Significant world events can alter the price of the cryptocurrency as well as have been already discussed in this guide.
- Keep yourself in the loop of current events which will serve a solid baseline for your fundamental analysis.
This looks at the price of Bitcoin as unfazed by the current events or trends that are happening around the world. This method helps traders to predict the future price movement of Bitcoin which is deemed to be both a dynamic process.
A lot of crypto enthusiasts tend to overtrade at some point to beef up their chances of gains. However, do note that Bitcoin Trading is pure speculation and it’s not an exact science.
Mastering the trading process of Bitcoin can help scale your finances but only if you are willing to take calculated risks. In this way, you will know when to trade and when to stop yourself from trading without the right strategies in place.