Bitcoin trading is not a walk in the park; there are things to learn and understand before you take the plunge. So, if you are someone trying to get your feet wet in the crypto world in 2020, there are some useful guidelines that can help you start off on a good note.
- In Bitcoin trading you buy low and aim to sell it high. Unlike investments where you hold the Bitcoin for a long time, in trading, you will try to predict price swings by analyzing the industry and price charts of crypto assets.
- To start trading, you must open a crypto account in a reputed cryptocurrency exchange like Coinbase. Unlike investors Bitcoin traders will buy or sell the crypto coins for a short-term, usually when they feel that profits are possible. So, they may often not consider the ideology behind the trade or think of studying the technology.
- All traders may want profits but they choose different methods for it. Day trading is where a trader will do many trades in a day and their aim is to profit from price movements in the short term. Scalping is when small profits are targeted by traders because smaller profits will reduce trading risks. Swing trading is when traders try and take advantage of price swings. Here, traders identify the start of a price swing and enter trading; they hold onto the coin till the trend dies out, in order to get the profits. The automated trading applications like Bitcoin Revolution help young traders to trade like a pro and increase the trade and profit.
- Nobody can actually predict which direction the prices of the Bitcoins will move, but there are some noticeable patterns and rules that can guarantee long-term profits. So, traders will follow both fundamental and technical analysis. The former aims to predict prices by considering the bigger picture, while the latter aims to predict prices looking at market data, like past trading volumes or price swings. It is believed that a healthy mix of both these types of evaluation may give you the best possible outcome.
- To start trading Bitcoins, you have to become familiar with some terms. Trading platforms, for instance, are websites where sellers and buyers are matched automatically. Unlike these trading platforms, brokers like Coinmama will sell the coins directly in exchange for higher fees. A marketplace is also distinct from a trading platform because here sellers and buyers interact with one another directly. The order book refers to a comprehensive list of all buy-and-sell orders viewable on a trading platform. Buy orders are “bids” and sell orders are “asks”.
- Bitcoin price refers to the last Bitcoin trade price on a particular platform. There will not be any single global Bitcoin price for everyone; Bitcoin’s price in the United States can be different from other countries. Volume of trade refers to total number of trades in a specific time-period; so significant trades have large trading volumes.
- When you are a beginner there are some important things to remember as these mistakes can prove to be very costly for you. You have to understand that trading has its risks and you should never invest more money than you are ready to lose. You need to have a plan when you start trading; knowing when to exit will save you from losses.