It is not an easy task to start bitcoin trading. You cannot just sit in front of your computer and order some BTC online; you have to take steps first. The following paragraphs will explain this step by step, but a few things still have to be done before starting with the real trade. In this article, we will discuss how you can start bitcoin trading.
Let’s get started.
What is bitcoin trading?
Bitcoin trading is the process of buying and selling bitcoin for other currencies. It is trading because you exchange one currency for another, thus creating a type of trade where you essentially turn one piece of currency into another. And it’s called bitcoin trading because it’s the most popular way to buy bitcoins (which is what altcoin traders use to acquire all kinds of cryptocurrencies).
It does not mean that you’ll be buying and selling cryptocurrency yourself, and you will likely need to go through a site or service which can help connect buyers with sellers and vice versa. Bitcoin prime is one of the top trading platforms that you must use for bitcoin trading.
Steps to start bitcoin trading
- Learn the bitcoin’s pricing movement
Learn from those who have been successful in trading or are currently making money out of bitcoin trading. Learn the basics that you need to know about how bitcoins work. You can read blog sites that write articles on how bitcoins work and what you should understand before starting bitcoin trading. Financial experts also write books if you want an intensive course on currencies.
- Pick a bitcoin trading style and strategy
There are two main styles of trading cryptocurrency, day trading, and swing trading. The former means buying and selling coins each day for profit; the latter means making an entry after a downtrend and exiting after a sign of reversal. Swing traders use charts with multiple timeframes to ensure profits are targeted. What timeframe you trade on depends on what your goals are.
Cryptoassets are not correlated, so investing in one doesn’t automatically mean it’ll go up when another goes down. This makes having multiple positions popular since you can have long-term ones that follow fundamentals, then others that only last days/weeks because they’re being traded alongside shorter-term trends.
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- Know how you want to get exposure to bitcoin
There are two basic ways to get exposure to Bitcoin; you can trade them on an exchange like Bitstamp using other crypto or fiat currency, which is the approach taken in this tutorial; or you can “mine” new bitcoins using your computer’s power, and either sell these freshly mined coins on an exchange for USD/EUR, etc. or hold onto them and hope that their value increases over time.
- Set your limits and stops
Most brokers will provide you with the option to set your limits and stops. When trading a new asset, I usually prefer a tight stop and a take profit not too far from my entry price. The logic here is that if I get in at $400, but the price drops to $390 quickly, it might make sense to cut my losses sooner rather than later.
- Monitor and close your position
You need to keep a close eye on the price of Bitcoin, and you can track it in regular intervals. Once the trade is closed, you will want to transfer your bitcoins back into your wallet and perhaps start trading other cryptocurrencies. This way, if the trade goes wrong, you’re not left with nothing but loss.
We hope you’re now aware of bitcoin trading and ways to start trading bitcoin in the best possible way.