The question, “How to Trade in Bitcoin”, is searched by traders more than anyone else. When Bitcoin investment took the globe by storm by its skyrocketing prices, even newer trading players got interested in the question. Everybody, who was aware, wanted to take their part of the profits from the colossal crypto pie. However, not everybody was able to get the correct direction or guide to trading the digital currency.
But the time has not passed yet too. There might be the next storm next month or even tomorrow. At least you should be ready this time. Thus, here is the perfect way to trade the famous digital coins with six easy yet effective steps.
Best Step-by-Step Guide to Trade in Bitcoin Investment
Learn about the Coin: The first step to trading in Bitcoin investment is to learn about it first. There are some basic concepts to start like how you want to deal with the cryptocurrency list, factors influencing it, trading strategy, and a lot more.
“How you want to deal the Bitcoin” means if you want to own it or speculate the price movements, i.e. up or down. Nowadays, CFD trading offer by most genuine brokers.
CFD trading means to predict the price movements and thus earning from the right forecasts. HF trading broker is a good, trustworthy brokerage firm which provides CFD not only in Bitcoin investment but also in other several assets. The tradable financial instrument list includes shares, forex pairs, commodities, cryptos, indices, and more.
The broker is licensed under the top financial bodies, including ASIC (Australian Securities & Investment Commission). Note that the minimum deposit amount to begin investing with the broker is $250, but you can always go for FREE demo accounts.
Know the Price Factors: After learning about the coin, it’s time to know the factors which influence the price of the digital currency so that you can make reasonable profits without any hassle. The first factor is supply; Bitcoins have fixed amount due to which their prices fluctuate so much. In total, we have 21M units of Bitcoins, out of which 18.4M are already mined. The remaining are believed to be done by 2040.
Second is major events which would influence the price like any announcement by government or prestigious related institutions, in both macro and microeconomic level. Other factors which influence the Bitcoin cost are the market valuation of the currency, i.e. how valuable people consider it and any adverse or positive rumours or news circulated in the cryptocurrency market.
Set a Strategy: The next step to your “How to Trade in Bitcoin?” question is setting and deciding an excellent technical strategy to trade which works for you. Some great techniques in this regard are day trading, swing trading, Robo trading, and scalping. However, there are dozens of other methodologies to consider too. One can also go for a combination of two or more strategies if it positively works for them.
Note that each technique has its pros and cons, and thus, you must try every strategy to reap the peak advantages out of your trading. For this, it is always recommended to go for free demo services offered by good brokers like Oinvest, ETfinance, or ROinvesting.
Do not come in the influence of people regarding which methodology is good or bad. One thing might work for them but not for you
Open a Trading Account: Now, all the pre-trading preparations are done and be ready for the core practises. The first step in it is opening a trading account with a good broker, i.e. trusted and better than others. A beginner should go for brokers which offers them low-cost services with a reasonable amount of services.
At the same time, professional or advanced investors should not consider costs until a particular point and look for other valuable features. Some useful features offered by ET finance are a wide range of trading platforms, no hidden or extra charges, transparent and accessible user interface, and robust customer support team.
PS: Trading on Bitcoin prices, i.e. CFDs, and investing them through an exchange are two different things.
Move with a Plan: A trading plan is not necessarily required for an experienced trader. However, it can serve as a magical tool for novices. A plan can aid the investor in deciding regarding the stakes of trade, i.e. how long it should hold the share or should go short or long with the asset? Notably, a person’s plan should comply with his long and short term goals.
Make sure to be aware of the risk you would be taking with each purchase and have the perfect risk management plan in your hand about the same.
Place an Order: After all the preparations, the last step to answering “how to trade in Bitcoin?” is to place your trading order. Starting with a small amount is suggested to every novice trader in the cryptocurrency market so that no significant effect on his psyche occurs. Using some proper tools like stop loss and limit order, can be a rational decision.
Also, before trading any assets, anytime, it is vital to read every, or at least major, news related to it. For intraday trading, charts, signals, and other technical analysers are keys to making a profit.
PS: Stop Loss is a trade ordering tool which aids the investors in mitigating the loss by automatically selling the financial instrument.
Limit Order is another tool which automatically buys a financial asset once it touches the price mark, set by you.
How To Trade in Bitcoin: So, these were the steps. Follow the steps carefully and if required bookmark the page or future reference. The steps seem quite easy, but when a person is in a real situation, then he realises that it is more complicated than anything else. But understand the thing that this cryptocurrency list is significant and has the potential to be the future’s money. Banks, governments, businesses, bolds, etc. are developing and finding ways to adapt to the changes. The primary reason for the change is Bitcoin investment or any crypto is not centralised and are much more accessible and feasible than today’s circulated fiat currency.
Thus, the one who’ll understand this “complicated” means of exchange, might be able to become “richer than his peers”, hopefully. Also, note that there is another digital currency in the cryptocurrency market, too like Ethereum, Litecoin, Ripple, and many more. Thus, it is not mandatory that Bitcoin would be responsible for the next significant uptrend; any of these can. The moral is do not indulge yourself in one finite thing; keep exploring, keep creating.