Basics of Bitcoin Trading For Beginners
Bitcoin trading is similar to forex trading. It is the act of buying low currencies and selling them high. Similar to other forms of trading, you need to study the industry as a whole to predict price movements. Therefore it requires a good amount of your time, money and effort to reap in some profit. However if done right, you will be swimming with cash without having to spend a lot.
“But how do I get started in Bitcoin trading?” you may ask. Well, this article will help guide you in learning the fundamentals of Bitcoin. By the end of this article, you should be familiar with different ways to read the market. And should be able to come up with your own trading plan.
Exactly What Is Bitcoin Trading?
One thing that should be pointed out first is that trading and investing are two different things. To put it simply, trading is for the short term while investing is long term. If you are looking for quick trades here and there then you should give the trading market a spin.
But before you start trading away cryptocurrency you have to be aware that they differ from trading foreign exchange currency. And with cryptocurrency, it is not usually backed by a centralized government. Therefore making the market that much more unpredictable in terms of price surges or drops.
Likewise, it should be pointed out that unlike traditional markets, Bitcoin trading is open 24 hours a day for all 7 days a week. In turn, you can buy and sell just about any time you may please. In addition, since the market is handled peer-to-peer and not managed by the central government, the process to start trading is relatively fast and simple. And thus, there is no longer any need for a long identity-verification process.
Analyzing The Market
No one can fully predict how the price market of Bitcoin will go. And there is no easy solution to making every trade profitable. However, you can change the odds of making a mistake depending on how much of said market you analyze. And a good trader should know when some losses must be taken for a more profitable long term.
That being said, traders have identified certain key factors in the rise and fall of the market. There are certain patterns, rules, and methods that they utilize to sustain profitability in their trading. And here are some insider tips to remember.
– Have a perspective of the bigger picture. Making sure you are well aware of the overall news and developments on Bitcoin will help you know if the market has reached its peak.
– Research market statistics. Whether it is the past price movements or the trading volumes, both can determine the currency’s capabilities.
– There is no single Bitcoin price that everyone adheres to. As previously stated, the market is highly volatile in terms of stability. You can be raking large sums of cash one day but lose it all by the next.
– Learn to read the price graphs. It is imperative that you understand how crucial terminologies like “high and low”, “market order”, “volume”, etc.
Now that the basics of Bitcoin trading have been explained, you can now start checking up on the market itself. Although, it would be in your best interest to take a while before purchasing anything on the market yet. And instead, try to make your own prediction on how the market will go. If you are successful then you can start your adventure on the wonderful world of Bitcoin trading.
However, if you want to improve your skills on Bitcoin trading then you should check up our other articles.