How to Trade Bitcoin. There are a lot of ways that you can trade Bitcoin and cryptocurrencies and it is entirely dependent on what you want to gain from your investments and how much time are you willing to give to trading. As per IG, there are four main kinds of trading: Day trading; Swing trading; Scalping. Jul 25, · Bitcoin is a safe commitment for a new trader as it can be used as a long-term store of value. It also comes with relatively fewer risks compared to altcoins. Furthermore, trading bitcoin doesn’t need to occur every single day. You only need to day trade bitcoin Author: Mikhail Goryunov. Jan 23, · You can either deposit money to an exchange and trade it there, or you can sign up with a regulated cryptocurrency broker and discover the huge variety of bitcoin trading options. If you are only interested in trading bitcoin and other cryptocurrencies, then signing up with a .
How to trade bitcoin yourselfLearn How to Day Trade Bitcoin: a Guide with Winning Trading Strategies
It occurs in any market place but is most common in the stock, forex, and cryptocurrency markets. Day traders never hold any positions overnight; they enter and exit trading positions within the same day.
Instead, they buy digital assets and hold them for a short period, anywhere between a few minutes to a few hours, before they sell them off. Traders can be classified into two broad categories.
Speculators and technical analysts. The speculators keep a watchful eye over the cryptocurrency market for news and activities that may indicate that particular crypto will lose or gain value. Their main concern is outside market influences such as coin hacks, developments, and significant partnerships, among others. Analysts, on the other hand, are concerned about the internal workings of the cryptocurrency market and tend to rely on financial patterns and charts for their insight.
You may find that being unique and true to yourself extremely beneficial. The first step towards your day trading journey is to pick a marketplace. Different marketplaces offer different fee structures, coin pairings, trade amounts, etc.
This is extremely important because little profits on large trade volumes can quickly disappear into fees. Once you find a viable marketplace, go ahead and find two to three other marketplaces and register accounts on each.
Doing so gives you flexibility in terms of cryptocurrency fees, liquidity, and availability. Next, you need to develop a solid trading strategy. This step involves a lot of research and self-discipline. For starters, you need to ensure that you do not risk more than you are willing to lose. Day trading is a numbers game, and you are bound to make some losses here and there. Another vital factor in cryptocurrency trading is the stop-loss limit or as commonly known, your exit strategy.
Most exchanges allow traders to set a stop loss that automatically exits a trade at a certain price level. Limit sell order is another important concept in cryptocurrency trading. Unlike the stop-loss order, the limit sell order automatically closes a trade one once your digital asset hits a specific high price. Once the asset hits that price point, the limit sell order will automatically sell your asset.
The cryptocurrency trading market is currently filled with a large number of trading bots and trading algorithms. Some are freely available on open-source platforms while others are given at a fee. As tempting as it is to utilize the services of these trading bots, extreme caution is recommended. Crypto trading bots are only as good as their programming. Therefore, any corruption in their code, and you can expect them to make mistakes. Features such as bot performance analytics, social trading, portfolio creation and tracking make it a robust option for any trader interested in automated cryptocurrency day trading.
The trader undertaking scalping hopes to profit by exploiting the bid-ask spread. Scalping is a quick, paced strategy that tends to be dangerous at times. Therefore, you need to be hot on timing and vigilant for unpredictable assets. This is a popular strategy that depends on following up on news sources and recognizing price moves. Inversion is a commonly discussed strategy utilized all over the world. This strategy follows a fundamental rationale as it fixates on buying and moving day by day low and high pull-backs.
Therefore, it requires the capacity to anticipating pull-backs quality and precisely distinguishing them. Bitcoin is more volatile than any other type of asset in the cryptocurrency market. Therefore, day trading bitcoin comes with a considerable amount of risk. Bitcoin prices are highly sensitive to public sentiments and regulatory changes. They fluctuate quickly depending on the types of news circulating in the industry, whether positive or negative.
Therefore, before trading bitcoin, you want to wait until there is a high reading of volatility to make correct entries. Not having enough liquidity could trigger a substantial slippage that could lead to even more significant losses. Bitcoin is a safe commitment for a new trader as it can be used as a long-term store of value. It also comes with relatively fewer risks compared to altcoins. You only need to day trade bitcoin when all conditions align in your favor.
Therefore, avoid trading on weekends and limit trading only to days with the highest volume. The safest altcoins to trade are those that are the top by market cap. These are the ones that are less volatile and are most likely to serve as long-term stores of value.
A great example is Ethereum, Ripple, Bitcoin Cash, among others. These coins are less apt to disappear. If you are a Canadian citizen, then you can go to Bitbuy right now and create your own account to start trading. Click here to create your account. There are a lot of ways that you can trade Bitcoin and cryptocurrencies and it is entirely dependent on what you want to gain from your investments and how much time are you willing to give to trading.
As per IG , there are four main kinds of trading:. Day traders open and close their position within one single trading day. This strategy works for traders who want to take advantage of short-term opportunities in the Bitcoin market which may come about in light of developing news or emerging patterns.
Swing traders catch trends in price movements the moment they form and hold onto it until the trend experiences a reversal. This strategy is great if you want to take advantage of market momentum. Make several intra-day trades on minor price movements. If you are the kind of trader who would make several small frequent profits rather than wait for a big opportunity,. If you are a long-term holder or you want to just get into the crypto market and try out your hand then passive trading may be ideal for you.
The idea is as straightforward as it is timeless. Wait for the price to drop to a certain level and buy-in. Wait for the price to go up to a certain level and buy out.
Unlike the other forms of trading, the time length between buying and selling can last for several days, weeks, months, and even years. The two most important tools to keep in mind while trading, are fundamental analysis and technical analysis.
This analysis looks at the big picture instead of price movements. When you are doing a fundamental analysis of a coin, you are looking at:. Keeping yourself up-to-date on all the current events is imperative for solid fundamental analysis. Technical analysis is a tool, or method, used to predict the probable future price movement of a currency pair, cryptocurrency pair, or stock. It can be creative and dynamic which helps you gain a very deep perspective into the coin.
You can read the first part of our two-part guide on technical analysis to gain more insight. Sure you can gain a lot but you can lose a lot as well. Take your time and do some research. Learn about the coins and learn about certain trading strategies. Learn about the exchanges and choose the one which will benefit you the most. Also, people tend to invest in the same coins that their friends are investing in.
While there is nothing in taking advice, you should combine advice with your own research. Fear and greed are the two most common emotions when it comes to investors.
Fear can cause you to not dive into a coin when it is ready or it can cause you to leave your trade prematurely. Conversely, greed can cause you to have blind and baseless faith in a particular coin or it may make you hold on to a trade way past its expiry trade.
Do not give in to emotions, stay as rational as possible. However, what separates the professional traders from the novices is the ability to learn and grow from those mistakes. If you misread the same pattern a second time then it is completely on you. Actually, this point provides a pretty awesome segue into our next section which is…. Every exchange has its own wallet , however, it is not the safest of options. If you plan on holding on to your crypto for a long time then you should look into cold wallets.
The two kinds of cold wallets that we would recommend are hardware wallets and paper wallets. Hardware wallets are physical devices where you can store your cryptocurrency.
They come in a few forms but the most common is the USB stick style typified by the Nano Ledger series. Although many swear by them, hardware wallets are still prone to compromise. This applies to those bought from the company themselves, but particularly if a hardware wallet has been acquired second hand. Under no circumstances should anyone ever use a pre-owned hardware wallet. Although loss or damage can spell disaster for the unprepared, hardware wallets can be restored.
You should keep restoration details in a safe place that only you, and anyone you plan to leave the money to know about. Remember, your restoration details open the wallet. Think very carefully about who if anyone you share them with. Paper wallets are an offline cold storage method of saving cryptocurrency. It includes printing out your public and private keys in a piece of paper which you then store and save in a secure place. The keys are printed in the form of QR codes which you can scan in the future for all your transactions.
The reason why it is so safe is that it gives complete control to you, the user. You do not need to worry about the well-being of a piece of hardware, nor do you have to worry about hackers or any piece of malware.
You just need to take care of a piece of paper. This makes it an economically viable option. In situations when fast execution is more important than the price difference, you should opt for market orders. When you are day trading, the activity on the exchange occurs very sporadically.
Before you commit to any exchange, take your time to fully explore its functionality and thoroughly evaluate the drawbacks. Here are the best crypto exchanges for Bitcoin day trading:. Many traders shared their experiences about their psychological struggles that have caused them losses. If you want to avoid quietly sabotaging your trading profits, adopt the right mindset:. Trading cryptocurrency for profit is a difficult craft in itself.
As you can see, future Bitcoin day traders have a lot of learning to do — from the technical aspect of this industry to controlling their emotions.
Day trading may result in considerable profits as well as equally big losses. It is not for everyone. But if you take the trouble to research properly and utilize the right tools, such as Bitcoin day trading bot by 3commas, there is potential to make a great living. A proven leader, successful at establishing operational excellence and building high-performance teams with a sharp focus on value creation and customer success. By Mikhail Goryunov. Login , for comment.
Read on… ContentsIntroductionChoosing a contract to…. Recently, yield farming has started gaining popularity. This type of income attracts inexperienced investors as it does not require much…. Binance — vast functionality, basic and advanced exchange information, no lagging, on-the-go app.
BitMEX — high leverage, no Bitcoin deposit and withdrawal fees, solid security infrastructure, simple interface. Bitfinex — margin trading feature, many order types, customized user interface, reliable security measures. Kraken — an array of additional tools, suitable for all skill levels, account management services. Having clear entry and exit rules; Treating margin responsibly; Closing all open positions in time; Becoming fluent in technical analysis; Using risk-management tools; Sticking to the trading plan; Continuous learning.
Mikhail Goryunov. Trading cases. Comment Cancel reply Login , for comment. Related posts. Crypto bots. Passive crypto income ideas Recently, yield farming has started gaining popularity.