With every passing day, Bitcoin hits a new high. And with every new high, it gains in popularity among a group of people who had never invested or traded with it. Most Bitcoin traders have a rough time as they do not understand how the market works or what they should expect from it.
Well, if this is you, in this article, we shall introduce Bitcoin trading. We shall explain what it is (from the basics), and point out some basic Bitcoin trading tips and strategies. After this piece, you will find other articles that will shed more insight on Bitcoin trading. Feel free to skip to whichever topic you please after reading this introduction.
What is Bitcoin Trading?
Bitcoin trading can be compared to stock or share trading. It is buying Bitcoins and selling them for a profit when its value increases above that which you got it for. If the value goes down, selling your Bitcoin may result in a loss.
In the Bitcoin market, there are two types of traders: short-term and long-term traders. The long-term traders tend to study the trend in prices for long periods. The trends will influence their decision to hold or buy Bitcoin for lengthy periods with the aim of making a profit. And given that bitcoin is still considered to be in its tender stages; most feel that it is a great time to buy Bitcoins.
This assumption is based on the increasing adoption of Bitcoin in the mainstream market and its subsequent increase in demand and technology. All these factors point towards Bitcoin gaining value in the years to come.
Short-term traders on the other hand, as their name suggests, analyze day to day Bitcoin price changes and purpose to take advantage of the changes. These types of traders seem to thrive on the volatility of the market. These are called day traders.
When Bitcoin was first introduced, the changes in its prices were numerous. Slight changes in the cryptocurrency space impacted heavily on the Bitcoin price. But with the constant and continuous adoption, Bitcoin has transformed into a more stable cryptocurrency, and most experts state that this is by far the best time to get into Bitcoin trading.
Rules of Trading BTC
When you understand the Bitcoin market and play your cards right, Bitcoin trading can make you a fortune. As a newcomer, below are some rules you should adhere to.
- Take complete advantage of the technological resources at your disposal to make maximum profit.
- Know the best time to cash in. It is imperative to remain unemotional, focused and professional.
- Understanding the market is not an overnight process. It takes time, effort and concentration. It is critical that you conduct your research well and are up to date with the current Bitcoin trading trends.
- Break down your capital investments into small lots. Invest in different price points.
Last but not least, it is important to note a few things, the Bitcoin market is open at all times, and you do not have to buy an entire coin. You can buy a fraction of a Bitcoin as you please, which means you can started with any amount you wish.
Below is some more articles on trading Bitcoin. Enjoy!