With several celebrities and institutional investors making investments in Bitcoin, the price surges of this first-ever cryptocurrency have been impressive. Were you always interested in the world of cryptocurrency but too nervous to actually dip your toes into it? It is natural to feel apprehension, especially since the industry is still growing. But, the substantial amount of profit that you can gain is undeniable.
However, the volatility of the market is a reality, and the wide range of price fluctuations can surprise even the most seasoned traders. For amateur traders, an efficient trading strategy and understanding of the basics is vital. That is why we have compiled a comprehensive guide for the would-be traders ready to garner wealth.
Bitcoin trading – explained!
Before you start trading with Bitcoins, you actually have to know more about it. Bitcoin trading is more about making short-term profits. Usually, they buy and then sell Bitcoins whenever there is a profitable opportunity. For this, intimate knowledge of the market is not a requisite.
Why is Bitcoin trading different from Bitcoin investing?
Bitcoin trading and Bitcoin investing are different terms because they have varied connotations. Bitcoin investing means that you are in for the long haul. Here, the investors buy and then hold the coins for a long time. They ride out the lows and highs of the market.
However, there is no such rule that states that you cannot be a Bitcoin trader and investor. You can indulge in both if you want. But in the case of investing, you will need to know more about the market in detail.
Decide on the type of trader you want to be
Every trader has profit on their mind when they start Bitcoin trading. However, there are different types of trading that can characterize you. These are mainly of three types –
Scalp trading
Gaining popularity nowadays, the scalping strategy allows traders to make small profits. These short-term tradings offer minimal risks. And what’s more? You can make several such traders throughout the day.
Swing trading
In this type of trading, the traders make use of the daily volatility of the price movement . They keep an eye on the starting of the movement and then place their position. These traders are in for the long-term as they can hold the position for months to get their desired profit.
Day trading
Day trading involves placing positions and making trades throughout the day. Here, traders avoid the night exposure. Moreover, it also ensures that you do not have to pay the charges for the overnight holding of the position.
Common mistakes beginners are prone to make in Bitcoin trading!
There are plenty of mistakes that traders – both experienced and novice make while trading in Bitcoin. However, there are some common mistakes that beginners make. Take a look at these and make sure that you avoid them.
1. Letting emotions take control
Humans are emotional creatures, and most of the time these emotions can steer you away from a carefully laid plan. The two emotions that you need to get a handle on are greed and fear.
2. Using the money that you cannot afford to lose
It is unwise to use the money for Bitcoin trading that you just cannot risk. Moreover, you must never touch your emergency fund. If you lose the money, it will be a financial disaster of an epic proportion.
3. Inadequate research of the market
Most amateur traders think it's easy to make off profit in Bitcoin trading. Unless you dedicate time to understanding the market, profit will be far and between.
4. Not making an efficient trading plan
One of the most irresponsible mistakes that you can make is not having a solid plan. You must set the profit and stop-loss limits.
What strategies can you use for Bitcoin trading?
There are numerous strategies that you can use for Bitcoin trading. It primarily depends on your end goal. Do you want small profits, which by extension, mean fewer risks? Or are you ready to go long-term Bitcoin trading? Knowing about your own objectives will help you make the right decision.
Bitcoin prices can surge or fall in the blink of any eye. It is impossible to make an exact prediction. However, with aid of a wealth of information, you can make some educated guesses. If they work in your favor, you can enjoy the profit. If not, you will have to think about the next move.
There are mainly two types of analysis techniques in Bitcoin trading. These are –
Fundamental analysis : Here, the past trends, updates on regulations, current political news, etc., are assessed.
Technical analysis: Here, the statistical parts, including trading volumes and price movements are studied.
How to start trading in Bitcoin?
Bitcoin is one of the most widely traded cryptocurrencies in the market. Currently, it has a market cap of $1 trillion. However, Bitcoin does not have its own trading platform, which makes it difficult for traders. Now, they have to search for exchange platforms that allow Bitcoin trading like immediateedge.biz . Finding the right one can be a daunting task as scams and fraudulence are common.
However, if you take some time for research and read through the reviews, you will find it. Some of the most popular ones you can look at including Coinbase, eToro, Gemini, etc.
· After you have decided on the trading platform, check out the steps listed below.
· The first step involves opening a trading account on the platform of your choice.
· After verification, you can transfer the amount that you want to start Bitcoin trading with.
· Then, you can enter the market and start Bitcoin trading.
Final words
To thrive in the world of cryptocurrency, you must dedicate a substantial amount of time to understanding the market. For that, you need to read blogs, articles and even take part in online classes. The aim is to know the market enough to trade in Bitcoins confidently. It is natural to suffer some losses. However, you must remember that it is evident in any financial market. You must take it in stride and continue if you want to become an accomplished Bitcoin trader.
