This is a comprehensive guide to Bitcoin trading
In this guide, you will learn about this popular trading instrument, including:
So if you want to benefit from Bitcoin trading, this guide is for you.
Let’s jump right into it.
If you want to get rid of the complicated crypto wallet headache, you can make yourself relaxed by trading Bitcoin CFDs.
All you need is register a free account from Mitrade and access buy or sell Cryptocurrency CFDs easy, secure and straightforward.
Bitcoin trading means speculating on the movement of the price of Bitcoin.
A trader can use a Contract for Difference (CFD) broker or buy and sell the real coins through a credible exchange.
In both cases, the aim is to gain potential profit from the price differences.
When trading Bitcoin through a CFD broker, the coin is traded as a derivative. This means that rather than own real coins. The potential profits come from the value (price) volatility.
To do this, you just need an account with a credible CFD broker then you can buy (go long) if you think the value of Bitcoin will increase, or you can sell (go short) if you think the value will fall.
CFD trading carries some advantages such as trading on leverage where the trader only needs to deposit a raction of the required trading amount and the broker provides the rest. In this way, the trader can go long/short with more coins and make bigger potential profits.
Trading on leverage multiplies both profits and losses.
Trading Bitcoins via an exchange involves the buying and selling of the real coins.
You need to create an account on the exchange, decide the amount of coins you need, pay the full value of their worth, then store the cryptocurrency in a wallet until you are ready to sell them.
Exchange trading requires the trader to study the entire process before it can make sense to them.
Some exchanges might have expensive maintenance costs and a limit on how much you can transact.
Bitcoin is a decentralized cryptocurrency, the coins are free from many manipulative factors.
As such, many traditional traders are finding the price change of cryptocurrency might be more straightforward in certain extent compared to traditional trading instruments.
Bitcoin is one of the most volatile trading instruments today.
Traders know that where there is volatility, there are more trading opportunities.
Unlike traditional markets, the cryptocurrency market does not close on holidays and weekends. Note, traders who trade through Bitcoin CFD broker need to double check the trading period with the broker.
Therefore, Bitcoin trading offers more freedom to the traders in terms of choosing their trading schedule.
To get started in Bitcoin trading, you need to decide whether you are going to use a CFD broker or use an exchange.
This table summarizes the main differences between trading via a CFD trading platform and Bitcoin exchange:
If you are looking for a trustworthy and regulated trading platform, without involving the complicated crypto wallet, seeking opportunities from the price ups and downs, don’t hesitate to trade with a CFD broker.
Instant access to Bitcoin trading, anytime and anywhere.
GET STARTED FOR FREE
Bitcoin moves as per the availability of supply and demand. When there is too much demand, their prices increase, and if the supply increases, their prices decrease.
The advantage of Bitcoin is that they are decentralized, they are not affected by political and economic factors like fiat currencies.
Overall, here are some factors that might influence the movement of Bitcoin:
Bitcoin supply is limited and determined by the number of available coins, mined coins and destroyed ones. More demand is equal to a higher price while the price drops when demand falls.
The manner in which the media channels portray the coins can influence their movement. When the press creates a good perception of Bitcoin, more people buy it, thus increase in value.
The overall outlook of the Bitcoin market, and specifically how it appears to traders, influences the price. When the outlook is positive, the rate will increase. When the outlook is poor, the price will go down.
Events that directly affect coins can influence their values. For example, when macroeconomic shifts, security breaches and changes in regulations occur, they cause significant fluctuations in the price of Bitcoin.
The way that Bitcoin integrates with existing infrastructure such as fiat currencies determines its value. For example, if Bitcoin is considered the same as fiat currencies with e-commerce systems, more people will use Bitcoin and the demand increases, this results in the price increase.
Bitcoin has not been accepted by businesses around the world, as soon as Bitcoin becomes part of a business role, we’ll see a significant influence on the price.
Bitcoin, the first cryptocurrency in the world, and the king of all cryptos, has become a tough contender even amongst the biggest fiat currencies such as the USD, GBP, JPY and Euro.
However, even as it seeks to win this crown, it provides a lot of volatility on the way for traders to take advantage of. Here are three simple steps to get started trading Bitcoin:
Get started by knowing which approach to use in trading Bitcoin. If you prefer owning real coins, then you can only trade via an exchange.
Similarly, if you prefer the potential profits by predicting the price movement and also taking advantage of the other features outlined in the table above, then CFD trading through a broker like Mitrade is the way to go.
A suitable trading strategy will help you to make more profits trading Bitcoins.
Before you head on to Bitcoin trading, it’s very important to understand some mostly applied strategies for better trading.
Again, your goals in Step 1 determine the trading strategy for you.
With a satisfactory investing strategy and a reliable trading platform, it is time to put your strategy to the test.
Luckily, most CFD brokers provide traders with demo accounts where they can practice using virtual funds. It is recommended that one should test their strategy for at least 3 months before using a live account. This is enough time to know whether the strategy will be profitable or not.
If the strategy proves to be profitable in the long term, you can proceed to deposit in a real account and start trading on Bitcoin.
Once the testing proves successful, you can proceed to start buying and selling real Bitcoins using your preferred method. You need to deposit money to start real trading.
While at it, make sure to exercise proper risk management especially when using leverage since this feature multiplies both the profits and losses.
Trading cryptocurrencies is significantly different when compared to trading traditional markets like Forex and Stocks.
One of the reasons for this could be the massive volatility portrayed by these crypto asset classes.
Therefore, it is crucial to be careful while trading cryptos, and we believe the below tips would help you in successfully trading them and avoid the most common mistakes.
It is essential to know that protecting your capital is more important than making profits. Therefore, as a crypto trader, your focus must be on the former than the latter.
Make sure you use tools that mitigate risks like placing accurate stop-loss and take-profit orders.
If you are a novice crypto trader, we suggest not to use leverage in the very beginning. Because leverage will magnify your profits and losses.
When you have accumulated a certain amount of trading experience, you can use leverage to seek more opportunities in a highly volatile market such as cryptocurrency.
It is important to diversify your crypto portfolio to avoid risks. For instance, if your interest is to buy or sell Bitcoin, make sure to have smaller investments in other significant altcoins like ETH or XRP.
This will not only help you in mitigating the risks but also act as a potential hedging strategy.
Never let your emotions control your trading activities. Negative emotions like Fear and Greed can divert you from sticking to your plan and believing in your own strategy.
So, it is vital to gain control over those emotions to trade cryptos successfully.
Always believe in your trading strategy. It is crucial not to keep changing that strategy after a few failed trades.
Doing that will only make things worse as you won’t be sure of what to do when the market starts to act differently while using your new strategy.
But that won’t be the case when you stick to a single proven system because you will be well aware of the repercussions.
Many Bitcoin exchanges charge hidden fees which you will only get to know after placing your first trade.
So make sure to do extensive research on the exchange before signing up with them.
This will also help you in getting to know well about your exchange and the services they offer.
Over 270,000 registered clients have chosen Mitrade as their broker
REGISTER NOWComplete your account application
Deposit funds quickly in a variety of ways
Buying and selling Bitcoin and explore a world of trading opportunities
I hope you’ve enjoyed everything about Bitcoin trading.
Now, I’d like to over to you:
I hope you’ve enjoyed everything about Bitcoin trading.
Now, I’d like to over to you:
Feel free to share with us.
