How to trade Bitcoin – A Guide for beginners

crypto trading

Table of Contents

Since its creation and until when it was established as a means of exchange, bitcoin has been a blessing to humanity. When it started, many sites were offering free bitcoins ( most if these Bitcoin faucets are still available).

As time went by, the price of Bitcoin increased, and many people, rather than trading on the foreign exchange market (forex), decided to go the ‘crypto’ way. Aside from buying your coins and waiting for it to increase in price (HODL), trading your coin on the exchange market is one of the best ways to make money from Bitcoin.

There are many things to learn if you decide to choose this path, but be assured that it’s worth it. If you’re able to put some effective strategies in place, you can make money when the price of Bitcoin is low and also when it’s high.

For this article, we would be talking on how to start trading with Bitcoin. Before we dive further, there are a lot of situations that have made many users doubt the viability of this coin, and you may have also heard about this. So, let me change that. Let’s look at a few reasons why you should start trading with Bitcoin.

Why you should trade Bitcoin

It’s a volatile market

Okay. Before you jump into a conclusion, just hear me out. There’s always a rise and fall on the price of Bitcoin. Without a doubt, this will still keep happening for a long time. However, because of its volatility, this has made both experienced and inexperienced traders jump in and make a lot of money for themselves.

So, if you can learn how to trade, you would have higher chances of making more returns than the newbies. You just need to learn, okay?

High resistance to external factors

If you agree with me, the cryptocurrency market is stronger than the foreign exchange market. Why? Because with bitcoin, you don’t need to carry out fundamental analysis on the economy or notice some major trends before you trade.

For bitcoin trading, all you need is the basic knowledge of the market and some technical parameters to help you out.

The Market is very easy to understand

If you’ve ever traded on forex, then you would know how frustrating it is when you’re trying to analyze the trend of the market ( believe me, you might want to throw your laptop out the window after making a loss because you didn’t analyze correctly- personally did this).

With cryptocurrency, you don’t need to do that. The best way for you to make more profit is by buying. If you’re an expert, you will notice what I’m talking about when you start trading. If you’re a newbie and you’re still having your doubts, you can start with a demo account. In this way, you’ll be able to test-run your strategies.

Low leverage

For most of us who started with forex, we always had access to high leverage. This helped us to make more returns from our investments. However, the problem began when we started making losses.

Trading with a high leverage account would require you to pay attention to detail if you don’t want to lose money. But with low leverage, even though you’d have to watch the market, you would also be trading at low risk. In this way, you’ll be able to account for your losses (less loss).

Starting your trading journey

Choose your path

Now, you have to decide the best way you want to go about this. If you don’t want to do anything too serious, you could choose to buy Bitcoins and hold for your dear life (HODL). This method works very well. The article WHY A CRYPTOCURRENCY DIP IS AN OPPORTUNITY AND HOW TO PROFIT FROM IT discussed this strategy in details.

The only thing you have to do is sell when the price is very high. However, because of this, you are at the mercy of the market. In order words, you won’t be able to do much with your coins.

You can also choose to go the way of a trader. If you want to be a crypto trader, you need to know about CFD. Don’t worry, we won’t bore you with the details.

A contract for difference(CFDs) is an agreement based on cryptocurrencies (bitcoin and any other altcoins involved). For CFD trading, you are predicting the best outcome for every market. This would determine if you “go long” or “go short.”

For CFD trading, you don’t have to invest much. You trade with leverage. All you have to do is make small deposits. This would help you to gain more profit with the little amount you have.

Understand the price fluctuations

Just as we have been saying, The cryptocurrency market is very unpredictable. You don’t know what’s going to happen the next moment. On the 8th of March 2020, the price of Bitcoin was $10,025. A lot of investors were happy with this trend only to be disappointed two days later.

The price of bitcoin crashed to $8,293. As of the time of this writing, the bitcoin price is $9,669.

There are a lot of internal factors that may affect the price of Bitcoin. Below are some few reasons:

Bitcoin circulation

Simply put, there are not enough bitcoins to go around. Although we still have a long way to go before we would be able to mine Everything, its rate and also the holder’s activities have a way of affecting the price of bitcoin.

Market value and perception

The trading volume on the market will determine if investing in bitcoin is worth it. Also, due to the bad reviews and reports about this coin, many people are having second thoughts about trading. If this continues, the price of bitcoin will keep on depreciating.

Not generally accepted

Cryptocurrency has not been adopted in many countries and industries. This has made the progress of bitcoin very slow. But we know that very soon people will begin to see the benefits of this coin.

Choose your strategy

There are many strategies you can choose from. For instance, you can choose to be a day trader. Day traders take advantage of the small price movements during the day, and they Invest huge sums to get better returns.

If you’re considering scalping or automatic trading, these are good options as well. For scalping, you trade frequently, and it’s based on minor changes in bitcoin price. This would be suitable for you if you want to make a continuous profit.

If you want to be the passive type, then automatic trading would be the best option. For this form of trading, you don’t have to do anything. Your trading bots would respond to the changes within the market and find the best action to take.

Let’s get to the good stuff, shall we?

How to start bitcoin trading

Well, you need to sign up on a reliable platform and have a trading account with them. Not all sites or vendors are reliable, as many of them are rippers. So, make sure to research the platform you wish to trade on. If you still feel scared, you can try opening a demo account.

Since you know the type of strategy you’re going to implement, it’s best to have a trading plan. In that way, you’ll be able to make the best decisions and also know your limits.

Secondly, You need to research the latest news in bitcoin, key events, and the latest trends in the market.

As a Nigerian, before you start trading, you need to exchange your naira for bitcoin. If you don’t feel safe with third parties, you can easily buy bitcoins at luno.com. Now, with this information, you can make it to your first trade. Just place your stakes.

You can minimize your losses and make a lot of gains as well by automation. It’s not certain if you would see platforms that trade bitcoin to naira. However, you would see platforms that trade bitcoin to the dollar. In all these things, you need to have emotional intelligence and also be consistent. This is the only way you can make the best out of trading. To your success!

Picture of Maximo

Maximo

Leave a Replay

Sign up to Receive Latest Updates & Investment Opportunities in the World of Cryptocurrency

CONTACTS

© 2023 Wise InvestorX. All Rights Reserved | Designed by Ivantage Web Solutions