How to trade Bitcoin is a big subject and a good way to win or lose money, depends if done with knowledge or only with emotions. Bitcoin is one of the major inventions that can be truly appreciated by humanity in recent times. I mean being able to send any amount of money to anyone anywhere in the world conveniently without restrictions is indeed a welcome development, I mean there will not be any transaction fees to pay and no need to give out your real name and other personal information. However the buying and selling of bitcoins isn’t a walk in the park as investors in the crypto world need to have a w ell grounded knowledge base of the market before plunging into it or else you would run at a loss. You may also refer to our guide on how to choose a Bitcoin wallet.
Knowledge indeed is power because it keeps you 1 step ahead of and makes you prepared and knowledge of the cryptocurrency market before subscribing to it Is important, that way even if there are losses along the line you may have mastered a strategy that gives you more profits than losses. As you see it is very important to know how to trade Bitcoin. Open a free account today and start trading like a pro.
The need to be aware, educated, careful, well-grounded cannot be overemphasized as you are dealing with a market that can be best described as “turbulent and volatile” discipline and dedication are 2 indispensable prerequisites for success.
There are a host of online strategies to effective bitcoin trading but in all honesty, no one in the world including you and I can present you with full proof strategy to make profits in the bitcoin market. So don’t blindly trust people, do proper research, don’t make razz decisions and you could just survive the market and be on your way to earning a lot form this market.
Note: This article is only acting as a means of information and not a guarantee for state of the art steps to riches, every investment and bitcoin trading is risky, and the success story some investors should only act as a guide and motivation and not a guarantee. Invest what you can afford to lose and be responsible with your hard earned money
how to trade bitcoin
On that note we would like to share a few tips that can help both new and old investors in the bitcoin market that can assist in making the best out of the cryptocurrency world:
- Do a proper research; Understanding what you want to go into is important, no knowledge is lost and no man is an island. Learning is a day to day process and with a market as volatile as the bitcoin, knowing all there is to know is of utmost importance. The more you understand, the more cautious and careful you will be. Now amongst the things an investor in the bitcoin market needs to know, the “blockchain technology” is at the top of the list because it is the distributed ledger system that underlies all digital currencies. The decentralized and transparent nature of the blockchain is what makes it highly secure and almost impossible to hack, because to hack one ledger would cause a disparity in the entire network.
It is important to know how to research technologies and not only how to trade Bitcoin.
Practically, to hack the ledger one would have to hack all the computers on the network at the exact same time and for a currency like bitcoin that would mean millions of computers. However, since learning about Bitcoin can take quite some time, newer investors might benefit significantly from working with a mentor, one who has more experience in the market and is willing to guide you every step of the way.
As you see it is very important to know how to trade Bitcoin. Here is some more information about us.
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- Invest with caution; the bitcoin is still a new asset in the investment market and as we already know is more volatile than practically any other type of asset, gold, bonds and the stock market inclusive. Generally, risk in inherent when it comes to investment and investors should keep it in mind that cryptocurrency as a whole is still very much in its early stages of development and while experts believe that the overall trend for the bitcoin is upwards, trading this currency comes with considerable risks, so invest only money you can afford to lose, start small and invest a small portion of your capital. It isn’t advisable to chase bitcoin prices, decide on an entry point and stick with it, patience when trading with the bitcoin is a goldmine and must be treasured. So What do you need to learn in order to know how to trade Bitcoin?
- Learn about the top selling cryptocurrencies; Asides the popularly known bitcoin, the world of digital currency is gradually getting crowded up with many other altcoins. There are so many cryptocurrencies that sell for more than 1USD, these currencies fall under the penny-stock range and investors are advised to avoid these. It is important to note that the bitcoin account for more than 50% of the entire cryptocurrency market and has the highest volume making it the number and most important cryptocurrency. The other important currencies that fall in the list of top selling cryptocurrencies and should be paid attention to are; a. Ethereum b. Ripple and c. Litecoin. Here is a link to our cryptocurrency trading platform. You can open a new account for free and receive daily tips from professional traders.
- Spread your investment effectively; this simply means don’t put all your eggs in one basket. In the past few years, bitcoin has recorded a success rate with investors and there has been success stories in recent times of people becoming millionaires from investing in the asset. With the internet and other social media outlets have been a major vice in spreading of these success stories. Its only human to be within reach of these stories and want to be a part of it, now this is where some investors especially beginners would be tempted to put in all their money in bitcoin. No investment professional would advise you to put all your eggs in one basket, so by diversifying your assets into multiple crypto coins, you can decrease your risk because different cryptocurrencies have their highs and lows at different times, so the basic idea behind diversification is creating a portfolio where a decline in one component will correspond with an equal gain in another. For example, let’s say an investor has a simple portfolio, consisting of equal amounts of Bitcoin, Ether, Litecoin, Ripple and Bitcoin Cash, If one digital currency falls 10%, then ideally, another digital asset will rise by the same amount. As much as it is a good idea to spread your investment across different assets it is better to buy them overtime, meaning don’t buy and sell all of them at once at the same time but do so in smaller increments at different times.
- Stay up to date; read about the bitcoin news daily and stay educated by keeping track of community/forum developments and the crypto market fluctuations, this will help you stay relevant in the market.
- Be ready for volatility; the cryptocurrency market is highly volatile, but for every challenge or problem there is always a way out or solution when you learn how to trade Bitcoin. There are various ways that investors can use to manage the inevitable price fluctuations, one of which is diversification as talked about earlier, another strategy that can be adopted is the “buy and hold” being able to stick by these strategies would go a long way in guiding an investor to manage risk and invest wisely.
- Store your coins in a wallet; when it comes to purchasing digital currencies, exchanges such as coinbase are a great place to carry out such transactions. It however isn’t the best place to have such assets stored because over the years they have been instances where exchanges have been hacked. So it’s best to move them into a wallet, in this context there are two types of wallet which are; hot wallets (online) and cold wallets (offline) and investors are free to take further actions toward managing risk by using both type of wallets. Because just like you keep your cash in a wallet, some in the bank and some in a private safe, cryptocurrencies need to be managed in the same way. It is important to know how to store Bitcoin and not only how to trade Bitcoin.
- Do not make rash decisions; in trading/investment markets allowing ones emotions to play a part in your decision making is one of the worst things an investor can do. The Fear Of Missing Out otherwise known as FOMO is a major setback especially rushing into buying a coin at a high value and end up selling it at a low value, patience is this case can be very essential.
- Study the charts and pay attention to trends; the bitcoin and the crypto world as a whole is believed to be one that will increase in value over time, so the idea now is to collect as many coins as possible, getting in at the right prices, and building a strong diversified portfolio of crypto assets that you can hold onto. And to achieve this one must buy “the lows” and let the profit run, and also avoid buying/selling in huge emotional or reactionary nosedives. Also pay attention to spikes in trade volume, as this may imply that strong sentiments of fear or excitement just entered the market.
- Set limit orders; as an investor the moment you are ready to place and order, you will accept the market price or set what’s called a limit order. Limit orders assist investors and traders with a means of precisely entering a position without being victim of fluctuating prices. Once the limit order is set, be patient then give the price time to fluctuate and see if your limit order attracts any buyer or seller.
As a new or beginning investor it is advisable to avoid falling for ICOs, or Initial Coin Offerings, in the short term and stick with the more established currencies like Bitcoin, Eurotheum and Litecoin.
As you see it is very important to know how to trade Bitcoin.
If by chance you are asking… Why trade bitcoin? In a nutshell, Bitcoin is global and its prices isn’t related to the economy or policies of any single country and unlike other stock markets, there is no official bitcoin exchanges as several exchanges take place around the world 24/7