How to trade Bitcoin

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Contents

How To Trade Bitcoin

Bitcoin peaked at an all-time high of $20,052 on December 17, 2020, and made the headlines across the globe.

Bitcoin is no doubt innovative as a payment option, and it runs on Blockchain technology. You will learn how you can trade bitcoin even if you are just a beginner. Start making money with bitcoin and other cryptocurrencies.

What Is Bitcoin?

Bitcoin is a cryptocurrency, which was created in 2009. The creator is known under the alias Satoshi Nakamoto and nobody know who he really is.

Why Bitcoin?
What makes cryptocurrency unique, is that there are no middlemen like banks. However bitcoin transfers are a lot faster and a lot cheaper than bank wires.

How To Trade Bitcoin – Buying Your First Bitcoin

Bitcoin can be bought in a variety of ways depending on where you live on earth. Trading Bitcoin has become very popular – millions of dollars are being traded every day. The following options are widely used:

    1. Bitcoin Brokers (Recommended For Bitcoin Traders)
      You can buy/sell Bitcoin and other cryptocurrencies on these cryptocurrency brokers. The big advantage of the brokers is that they are regulated in the European Union and other countries. This means that your funds are safe. The support is also great and you have a variety of deposit methods. The disadvantage is that you can’t withdraw your crypto. You can trade is on the broker and withdraw fiat money (USD, EUR etc.) when you wish.
    2. Bitcoin Exchanges
      Bitcoin is usually bought by using an exchange. In any of the exchanges like Coinbase, Binance or Kucoin, you need to provide your personal details to register an account and be validated. While Coinbase is restricted to users from America and a few countries, you can register on Poloniex and Binance from other countries.
    3. Peer-to-Peer Avenues
      Peer-to-Peer avenues like LocalBitcoins give you an opportunity to buy Bitcoin. You will need to register an account on the platform to be able to use the platform to buy Bitcoin. Sellers and buyers are registered on LocalBitcoins to facilitate Bitcoin trading.
    4. Bitcoin ATM
      Bitcoin ATMs are increasingly becoming a glaring feature in major global cities. In America, Europe, Asia and South Africa, there are Bitcoin ATMs that give you a chance to buy Bitcoin. You need to have your Bitcoin account barcode scanned at the ATM to buy the quantity of your choice. If there is a Bitcoin ATM around where you live or visit, you can locate it on Google Map and buy your Bitcoin with ease.

Google Map of Bitcoin ATMs in New York City

  1. Mobile AppsBuying and Trading Bitcoin is now easier than ever before with several apps on mobile phones now making it easier to do so. The Square app can be used to buy and sell bitcoin on your mobile phone.Several other apps have a similar function, and they can be downloaded from Google Play and Apple iStore.

According to recent data, only 8,5% of the traders are female investors. Maybe the reason for this is that men are more interested in new technologies. Over the next 2 years, the percentage of female investors is expected to double.

How Beginners Can Make Money With Bitcoin Trading

It’s very easy to get started with bitcoin trading. 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 broker is probably the best choice.

Here are some statistics about bitcoin:

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Adoption of Bitcoin

Bitcoin has come a long way since it was first introduced in 1998, and it has become a global currency without boundaries. The value of Bitcoin is universal, and it is accepted as a means of payment in many countries on earth. The popularity of Bitcoin has given rise to alternative coins (or altcoins) like Ethereum, Bitcoin Cash, Ripple, among others.

You can shop online and buy a range of goods and pay for services with Bitcoin. Many merchants accept Bitcoin as a means of exchange, and this has become easier with the issuance of Bitcoin debit cards.

The bandwagon effect of Bitcoin has led to a growing acceptance of the altcoins, and this can be seen in the increasing market activity. For example, ethereum price leaped to its highest peak of $1,389 on January 15, 2020 as the demand for it exploded. Bitcoin is accepted by businesses like Microsoft, Dell, WordPress, and PayPal.

Answers to Important Questions – There are some important questions that newbies always ask about Bitcoin. Here are the major ones you should know:

Is Bitcoin an altcoin?

Altcoin stands for ‘alternative coin’. Bitcoin being the first crypto coin, it is not an altcoin. All other coins, but Bitcoin are altcoins (ex. Monero)

How Can I Make Money With Bitcoin?

There are several ways to make money with bitcoin. A few of them are: trading or long term investing

Who Created Bitcoin?

Bitcoin arose from the innovative work of Satoshi Nakamoto, who laid out the specification and operating methodology.

Satoshi did not create Bitcoin alone, as he worked with other developers on the project. As a result of this approach, Bitcoin operates as an open source and decentralized platform.

While many people have wondered whether Satoshi was a pseudonym or a true identity; the answer remains unknown.

Other collaborators on the Bitcoin project are Gavin Andresen, Jeff Garzik, Mike Hearn, among others.

Bitcoin is definitely the outcome of a painstaking work that includes the footprints of several people.

Bitcoin is created when a computational difficulty is solved on the Bitcoin Blockchain, and this is rewarded through block rewards. Block rewards are given to miners who successfully completed the recognized process that gives rise to a Bitcoin.

Block rewards are not arbitrary as they are subject to a verification process built-in as a part of the Bitcoin algorithm.

What Drives The Price of Bitcoin?

Bitcoin derives its price from the interplay of the forces of demand and supply. As people increasingly acquire it, the price soars and the inverse leads to a price drop as demand reduces. Bitcoin can then be seen in the likeness of gold or diamond that is scarce in supply.

Bitcoin is limited in supply to the tune of only 21,000,000, and about 17,000,000 of these are in supply at present. It is not known if any change can be made successfully to the underlying framework of Bitcoin; otherwise, it has a fixed supply.

Bitcoin has attracted lots of controversies in the course of the last few months as a result of concerns and misrepresentations. The United States, Europe, and several countries have accepted Bitcoin as legit, and efforts are being made to regulate it. This is not to say that it faces opposition in a couple of countries.

In China, Bitcoin is illegal, and South Korea has also imposed a couple of restrictions on it. A few other countries have come up with laws to restrict its use. However, an overwhelming number of countries are open to Bitcoin.

Are Bitcoin Transactions free?

One important aspect of Bitcoin transactions is the fact that it also attracts transaction fees. While the fees charged might vary according to the processor, transacting in Bitcoin is not free. When you buy Bitcoin, you have to pay trading fees, and if you exchange it for fiat money, you will incur charges.

What is a Bitcoin Account Like?

Bitcoin is stored in an account that you can liken to a Bank account. The difference is that unlike a Bank account, your Bitcoin account is a virtual Bitcoin wallet. There is a unique address for each Bitcoin wallet that is created, and you can use it globally.

On a trading exchange, when you create your account, your Bitcoin wallet address is automatically created. You can choose to leave your Bitcoin on the exchange for trading or withdraw it to a private Bitcoin wallet. There are hardware, online, mobile, paper, web, brain, multi-sig, desktop wallets for Bitcoin.

There are different kinds of non-exchange wallets that you can use to store your Bitcoin for security purposes. Every wallet has a public wallet address and a private key used for accessing it. Your private key is like your password for emails.

Can I Lose My Bitcoin?

Bitcoin is safe if you have it stored in your private wallet. There is a difference between storing your Bitcoin in your trading exchange wallet and a private wallet. Your trading exchange wallet is considered to be risky to store your Bitcoin.

When hackers attack exchanges or there is a system breakdown, you can lose access to your Bitcoin. To prevent this, it is advisable to use a hardware wallet for storage. Trezor and Ledgerwallet are two of the best known hardware Bitcoin wallets.

You can also lose your Bitcoin if you send it to a wrong address. It is important that you use ‘CTRL C’ on your keyboard when copying a recipient’s address. If you send Bitcoin to an unknown address, there is no way to claim it back at present.

How Does Bitcoin Mining Work?

Bitcoin can be mined by anyone who is interested in doing so. There are a few options when it comes to mining Bitcoin. You can decide to buy a mining gadget for that purpose and this is a common practice in many countries.

While the profitability of the mining exercise also depends on the market price of Bitcoin, the electricity implications have to be evaluated. As Bitcoin surges in market price, mining becomes more lucrative, and a crash in market price also means that you could incur losses.

You can also decide to use your PC for Bitcoin mining, and this will require that you download a Bitcoin mining extension by using your browser. Using a browser extension for Bitcoin mining is a rather passive means to earn an income. You will be credited a share of the Bitcoin mined with your browser by the service provider.

What Is A Blockchain?

An understanding of the Blockchain is equally important for anyone who is keen to follow-up on its underlying basics. Blockchain is best described as a distributed ledger that operates within a decentralized network of linked computers, nodes and devices.

There is no central control over the Blockchain, and it can be accessed anywhere around the globe.

The use of Blockchain extends across several spheres of human endeavor from medicine to shipping, payment systems to database validation, etc.

Payroll processing, invoice management, and Insurance are some of the other facets of life that are revolutionized by the Blockchain. Bitcoin value in itself can be traced to the transparency, traceability, and auditable nature of the Blockchain.

The outlook for Bitcoin looks bright with many countries opting for regulation instead of a ban. This perception is a green light for many people as they look out for ways to share in the Bitcoin boom. Evidently, Bitcoin will wax stronger in the days ahead.

5 Easy Steps For Bitcoin Trading For Profit and Beginners

Bitcoin trading can be extremely profitable for professionals or beginners. The market is new, highly fragmented with huge spreads. Arbitrage and margin trading are widely available. Therefore, many people can make money trading bitcoins.

Bitcoin’s history of bubbles and volatility has perhaps done more to bring in new users and investors than any other aspect of the crpytocurrency.

Each bitcoin bubble creates hype that puts Bitcoin’s name in the news. The media attention causes more to become interested, and the price rises until the hype fades.

Each time Bitcoin’s price rises, new investors and speculators want their share of profits. Because Bitcoin is global and easy to send anywhere, trading bitcoin is simple.

Compared to other financial instruments, Bitcoin trading has very little barrier to entry. If you already own bitcoins, you can start trading almost instantly. In many cases, verification isn’t even required in order to trade.

If you are interested in trading Bitcoin then there are many online trading companies offering this product usually as a contract for difference or CFD.

Avatrade offers 20 to 1 leverage and good trading conditions on its Bitcoin CFD trading program.

Why Trade Bitcoin?

Before we show you how to trade Bitcoin, it’s important to understand why Bitcoin trading is both exciting and unique.

Bitcoin Is Global

Bitcoin isn’t fiat currency, meaning its price isn’t directly related to the economy or policies of any single country. Throughout its history, Bitcoin’s price has reacted to a wide range of events, from China’s devaluation of the Yuan to Greek capital controls.

General economic uncertainty and panic has driven some of Bitcoin’s past price increases. Some claim, for example, that Cyprus’s capital controls brought attention to Bitcoin and caused the price to rise during the 2020 bubble.

Bitcoin Trades 24/7

Unlike stock markets, there are no official Bitcoin exchanges. Instead, there are hundreds of exchanges around the world that operate 24/7. Because there is no official Bitcoin exchange, there is also no official Bitcoin price. This can create arbitrage opportunities, but most of the time exchanges stay within the same general price range.

Bitcoin is Volatile

Bitcoin is known for its rapid and frequent price movements. Looking at this daily chart from the CoinDesk BPI, it’s easy to spot multiple days with swings of 5% or more:

Bitcoin’s volatility creates exciting opportunities for traders who can reap quick benefits at anytime.

Find an Exchange

As mentioned earlier, there is no official Bitcoin exchange. Users have many choices and should consider the following factors when deciding on an exchange:

Regulation & Trust – Is the exchange trustworthy? Could the exchange run away with customer funds?

Location – If you must deposit fiat currency, and exchange that accepts payments from your country is required.

Fees – What percent of each trade is charged?

Liquidity – Large traders will need a Bitcoin exchange with high liquidity and good market depth.

Based on the factors above, the following exchanges dominate the Bitcoin exchange market:

Bitfinex – Bitfinex is the world’s #1 Bitcoin exchange in terms of USD trading volume, with about 25,000 BTC traded per day. Customers can trade with no verification if cryptocurrency is used as the deposit method.

Bitstamp – Bitstamp was founded in 2020 making it one of Bitcoin’s oldest exchanges. It’s currently the world’s second largest exchange based on USD volume, with a little under 10,000 BTC traded per day.

OKCoin – Bitcoin exchange based in China but trades in USD.

Coinbase –

Coinbase – Coinbase Exchange was the first regulated Bitcoin exchange in the United States. With about 8,000 BTC traded daily, it’s the world’s 4 th largest exchange based on USD volume.

Kraken – Kraken is the #1 exchange in terms of EUR trading volume at

6,000 BTC per day. It’s currently a top-15 exchange in terms of USD volume.

Bitcoin Trading in China

Global Bitcoin trading data shows that a very large percent of the global price trading volume comes from China. It’s important to understand that the Chinese exchanges lead the market, while the exchanges above simply follow China’s lead.

The main reason China dominates Bitcoin trading is because financial regulations in China are less strict than in other countries. Therefor, Chinese exchanges can offer leverage, lending, and futures options that exchanges in other countries can’t. Additionally, Chinese exchanges charge no fees so bots are free to trade back and forth to create volume.

If you’d like to learn more about Bitcoin trading in China, this video from Bitmain’s Jihan Wu provides additional insight.

How to Trade Bitcoin

Kraken will be used as an example for this guide. The process and basic principles remain the same across all exchanges.

First, create an account on Kraken by clicking the black sign up box in the right corner:

You’ll have to confirm your account via email. Once your account is confirmed and you’ve logged in, you must verify your personal information. All Bitcoin exchanges require varying levels of verification as required by AML and KYC laws. Below you can find the first three verification levels:

Once your account is verified, head over to the “funding” tab. You should see something similar to the screenshot below. Select your funding method from the left side:

Kraken offers many deposit methods, which are listed here:

EUR SEPA Deposit (Free) – EEA countries only

EUR Bank Wire Deposit (€5) – EEA countries only

USD Bank Wire Deposit (Free until 3/1/2020, then $5 USD) – US only

USD SEPA and SWIFT Deposit (0.19%, $20 minimum)

GBP SEPA and SWIFT Deposit (0.19%, £10 minimum)

JPY Bank deposit (Free, ¥5,000 deposit minimum) – Japan only

CAD Interac Deposit (Free until 3/1/2020, then 1%, $10 CAD fee minimum, $5,000 CAD deposit maximum)

CAD EFT Deposit (Free until 3/1/2020, then 1%, $10 CAD fee minimum, $50 CAD fee maximum, $10,000 CAD deposit maximum)

Deposits made using the traditional banking system will take anywhere from one to three days. Bitcoin deposits require six confirmations, which is about one hour.

Now, navigate to the “Trade” tab. Using the black bar at the top of the page, you can switch trading pairs. In this example we’ll use XBT/USD. We want to buy bitcoins, so let’s put in an order. Navigate to the “New Order” tab.

Let’s say I’ve deposited $300 into my account with a USD bank wire. In the example below, I’ve submitted an order to buy 0.5 bitcoins (XBT) at a price of $370 per bitcoin.

Check the black bar at the top, and you’ll notice that the last trade price was $383.17.

Why submit an order to buy at $370 per bitcoin (XBT) and not $383.17? One may submit an order lower than the current price if one expects the price of Bitcoin to fall. In this case, since my order is lower than other offers in the orderbook, I won’t receive my order for 0.5 bitcoin immediately. Placing an order at a specified price is called a _limit order._ Before placing an order, be sure to check the orderbook for your trading pair.

In the example orderbook below, you can see that the highest buy offer is for $382.5 per bitcoin, while the lowest sell order is at $384.07 per bitcoin.

Using the order form there’s also an option for “Market”.

A market order in this case would submit a buy order for XBT at the price of the lowest available sell order. Using the orderbook above, a market order for 0.5 XBT would purchase 0.5 XBT at $384.07 per XBT. If selling bitcoins, a market order would sell bitcoins for the highest available price based on the current buy orderbook—in this case $382.5.

Trading Risks

Bitcoin trading is exciting because of Bitcoin’s price movements, global nature, and 24/7 trading. It’s important, however, to understand the many risks that come with trading Bitcoin.

Leaving Money on an Exchange

Perhaps one of the most famous events in Bitcoin’s history is the collapse of Mt. Gox. In Bitcoin’s early days, Gox was the largest Bitcoin exchange and the easiest way to buy bitcoins. Customers from all over the world were happy to wire money to Mt. Gox’s Japanese bank account just to get their hands on some bitcoins.

Many users forgot one of the most important features of Bitcoin—controlling your own money—and left more than 800,000 bitcoins in Gox accounts. In February 2020, Gox halted withdrawals and customers were unable to withdrawal their funds. The company’s CEO claimed that the majority of bitcoins were lost due to a bug in the Bitcoin software. Customers still have not received any of their funds from Gox accounts.

Gox’s catastrophic collapse highlights the risk that any trader takes by leaving money on an exchange. Using a regulated Bitcoin exchange like Kraken can decrease your risk.

Your Capital is at Risk

Remember that as with any type of trading, your capital is at risk. New traders should start trading with small amounts or trade on paper to practice. Beginners should also learn Bitcoin trading strategies and understand market signals.

Bitcoin Trading Tools & Resources

Cryptowatch & Bitcoin Wisdom – Live price charts of all major Bitcoin exchanges.

Bitcoin Charts – More price charts to help you understand Bitcoin’s price history.

bitcoinmarkets – A Bitcoin trading sub-reddit. New users can ask questions and receive guidance on trading techniques and strategy.

TradingView – Trading community and a great resource for trading charts and ideas.

How to Trade Bitcoin – Best Bitcoin Trading Platforms for 2020

Want to trade Bitcoin but not sure where or how to start? Our full bitcoin trading guide below will explain everything you need to know about how to get started such as how to select a trading platform, deposit and place your trade, as well as essential terminology, tips and strategies you should be aware of before you start trading. By the end of this guide, you will be able to trade bitcoin with confidence.

Best Bitcoin Trading Platforms

The first step to get started trading bitcoin is choosing a reliable platform. When starting out with bitcoin trading, we recommend that you opt for a user-friendly, regulated broker such as eToro, especially for U.S. traders. eToro is a highly regulated broker with 6 million users worldwide. Their social trading platform allows beginners to learn from, and copy successful bitcoin traders as well as share trading tips and strategies.

For non-US traders, Bitcoin Trader is a fantastic bitcoin auto-trading platform, with an award-winning software that trades Bitcoin on your behalf at an alleged success rate of 90%.

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How to Trade Bitcoin on eToro (U.S. Friendly)

Step 1: Registration process

The first step to trade Bitcoin on eToro is to create your account. The registration process on most bitcoin trading sites is fairly straightforward and only takes a few minutes. Firstly, visit the platform’s official website by clicking on our tables above. Once you’re there, click the “Register” or “Create an account” button.

You’ll need to complete a form where you’ll need to enter your full name, email, password and phone number. If ever the bitcoin trading site allows registration via Facebook or Google+, you can also take advantage of this option to easily create an account.

Once you’re done providing your basic information, open your email account and verify your email. Other well-known platforms also require their users to verify their phone numbers.

Step 2: KYC & Verification

Many best trading platforms in the US and the UK will not require you to verify your identity. In fact, with Bitcoin Trader, you can start depositing, withdrawing and trading bitcoin straight away.

With brokers such as eToro however, identity verification will be needed. ID verification is typically needed if you want to have higher deposit and withdrawal limits. This is to ensure that the trading platforms’ users are real individuals and not fake people who want to launder money or engage in other illegal activities.

Some of the documents that you will need to submit are a clear photo of a valid and recent government-issued ID, passport and driver’s license. Moreover, you’ll need to provide either a bank account statement, utility bill or any other document that can verify your address. The address on the documents should match the address you entered when you created your account.

Step 3: Fund your trading account

You won’t have a hard time depositing money on bitcoin trading platforms because most of them offer a wide range of payment methods you can choose from.

On most platforms, you can deposit fiat money through bank transfers. The time it will take for the funds to be deposited in your account will depend on your bank schedule. It can take a few hours up to three business days.

Debit and credit cards can also be used. Just enter your card’s details such as your name, card number and CVC as well as the amount you’d like to deposit.

On the other hand, there are also bitcoin trading platforms that only accept other cryptocurrencies as deposits.

Depositing funds on eToro is very straightforward. Not to mention the fact that they accept Paypal as well as Skrill and Neteller.

Step 4: Place your first Bitcoin trade

Once your account is funded, you can now buy bitcoins and other cryptocurrencies.

In order to begin trading, choose a currency pair first then decide if you want to have a buy order or sell order. It’s highly recommended that you only trade a small amount of money if you are still a beginner. This is to ensure that you can gain valuable trading experiences without the risk of losing a big amount of money.

How to trade on Bitcoin Trader (Non-US)

Step 1: Create your account

The first step to trading bitcoin with Bitcoin Trader is to open your account. You will be asked to fill in a short registration form with your basic details such as name, email and telephone number. The sign-up process takes less than 2 minutes and there is no KYC, which means that you will be able to get to trading much faster than on other bitcoin trading platforms.

Step 2: Deposit funds into your account

The next step will be to fund your trading account. The minimum investment required to get started is $/£/€250.

Step 3: Demo trading

We recommend you start out with demo trading in order to familiarise yourself with the software and have the best chances of success before risking your capital. Bitcoin Trader’s demo mode gives you access to all the trading functions and you can place trades, the same way you would with live trading. Once you feel confident enough, move on to step 4.

Step 4: Live trading

You’re now ready for live trading. Firstly, adjust your trading settings, which include the amount you want to invest for each trade, the maximum amount per trade every day, your profit targets, the currency pairs you wish to trade with and click on “Save Settings”.

Once your account is set-up, hit the “auto-trading” button and the bot will get started trading on your behalf. Let the robot work and check on it regularly to make sure you’re on the right track. If you’ve hit your profit targets, you can then choose to re-invest, or withdraw your funds. Withdrawals are processed within 2 working days and customer support is available 24/7 should you require any assistance.

What is Bitcoin Trading?

Bitcoin trading is the act of speculating on Bitcoin’s price in order to generate profits. Unlike buying Bitcoin, when you’re trading bitcoin, you’re adhering to a few different criteria.

For starters, you’re only making a bitcoin buy or sell order with the pure intention of seeking price movement. Thus, you don’t have any intention of using it as a currency. You’re only looking at the asset through the lens of its market movement. An exact parallel is in the foreign exchange market. In the foreign exchange market, US Dollars, Japanese Yen and other global currencies can be bought and sold at fluctuating prices. Although the underlying asset can be used as a form of payment in the economy, in the foreign exchange market, all that is cared about is the price movement of the currency. Bitcoin and cryptocurrencies are the same.

In order to generate profits, bitcoin traders aim to buy low and sell high.

What Are the Pros and Cons?

Pros

    Low fees – Trading bitcoin involves low fees. Bitcoin trading platforms charge low amounts. Also, withdrawing bitcoin and turning it to cash involves little to no fees. You can send millions of dollars and only pay less than $100. Good track record – Bitcoin is the first cryptocurrency to overcome negative market sentiment. Many international stores now accept it as a payment method. Thus, it will be easy for you to withdraw or spend the bitcoins you’ll get from trading. Lots of bitcoin trading platforms – It is easy to start bitcoin trading with the help of numerous bitcoin trading platforms available worldwide.

Cons

    Price volatility – Because of the high volatility of bitcoin, there is a high possibility that you’ll lose a lot of money in case you have a buy or sell order that is against the market trend. Little historical data and support – Unlike stocks, bitcoin has only been around for a decade so there are not lots of historical data you can check out.

What Moves Bitcoin’s price?

Bitcoin’s price is highly volatile because it is being affected by a lot of factors.

Geopolitical events and statements made by governments around the world can affect bitcoin’s price. Negative opinions made by politicians and international organizations can scare bitcoin traders, investors and holders and this can result to a lot of bitcoin sell orders. Because of the high amount of sell orders, bitcoin’s price will fall.

Shocking news like the bankruptcy of Mt. Gox in 2020 and the Youbit cryptocurrency exchange in South Korea can also negatively affect bitcoin’s price. Many sell orders also happen whenever news about how bitcoin’s anonymous and fast transactions help drug dealers and child pornography site owners appear on major news platforms.

Uncertainty of how bitcoin’s price will be in the future, fear of having strict bitcoin regulation and high taxes for cryptocurrency-related activities are also some of the factors that can negatively affect bitcoin’s price.

On the other hand, news about how more and more people are considering bitcoin as the digital gold helps increase bitcoin’s price. Reports stating the increase of the total number of banks and international institutions that are using bitcoin and other cryptocurrencies also drive bitcoin’s price up. Recently, the successful launch a Chicago-based derivatives exchange CME’s futures contracts for BTC also helped increase bitcoin’s price.

What are the Best Bitcoin Trading Strategies?

1. Day trading

Day trading is the most active trading method you can try. As the name suggests, it involves buying and selling bitcoin within the same day. For instance, you make a bitcoin buy position in the morning then sell it before the day ends. Many professional traders make a lot of money by day trading

2. Swing trading

When a trend breaks, that’s when swing traders come in. This is because price volatility happens after a trend ends. Swing traders create trading rules based on their technical or fundamental analysis.

3. Scalping

Scalping is mostly only used by advanced traders. Scalpers take advantage of numerous price gaps that are caused by either buy-sell spreads or order flows. Trading positions made by scalpers will only last for a short period of time because they quickly make buy and sell orders once they’ve calculated that they have profits already.

Bitcoin Margin Trading and Trading with Leverage

Bitcoin margin trading enables you to open a trading position with leverage. This is done by borrowing funds from the exchange that you’re using, with some exchanges offering as high as 100x leverage. For example, if you opened a Bitcoin margin trading position with 2x leverage and Bitcoin’s price had increased by 5%, then you would have made a profit of 10% due to using 2x leverage. With no leverage, you would have only made a 5% profit.

However, if you had opened a position with 2x leverage and Bitcoin’s price had decreased by 5%, then you would have made a loss of 10%. So it’s important to note that margin trading works both ways, allowing you to gain profits quicker, but also making you lose profits just as fast.

Bitcoin trading with leverage works by the exchange providing loans to traders which is why it is considered risky for beginner Bitcoin traders. If you’re a new trader and want to start margin trading then we recommend starting small to get an idea of how leveraged trading works, and the risks of it. Ideally, never use 100% of your funds in a single margin trade because if the price goes the opposite way – you could lose all your funds in one transaction.

Are there Any More Reliable Crypto Trading Platforms?

Plus500 is a regulated CFD broker where you can trade a wide variety of different cryptocurrencies including Bitcoin, Ethereum, EOS, and more. Plus500 requires a verified profile in order to get started on the platform. You’ll require a document for proof of residence, a valid form of identification, as well as a selfie holding your identification to confirm validity. Plus500 is a great option for those in the UK and Australia as it offers access to CFD trading and also provides an intuitive platform where users can manoeuvre between funding, markets, and portfolio positions all on the same trading portal interface.

80.6% of retail CFD accounts lose money

An additional trading platform that has garnered global exposure is 24option.com. The platform has enabled Forex and CFD trading for a wide variety of different assets and currencies, cryptocurrencies included. 24Option is also able to be interlinked with MetaTrader4 which is one of the most popular global cross-exchange trading platforms with advanced charting and position mapping. Their trading platform enables usage for a variety of markets including global equities, commodities, and even foreign currencies (Forex). The site also distributes free eBooks in the form of educational instructional guides; that applies for learning how CFDs function, how to trade them on the platform, and even an in-depth guide walking through the exchange and its functionality.

Binance is a rising contender when it comes to global bitcoin trading platforms; although the platform has catered more towards vetting and processing correct due diligence on any and all assets that are listed on the exchange, the exchange has some of the most varied and extensive lists of tradable assets across all exchanges. It should be noted also that Binance does not require absolute verification to begin purchasing and selling assets on the exchange. This is great if you’re looking to immediately get started with a real-time cryptocurrency account and learn the ropes of trading by starting with a small account. Binance also has a variety of deposit methods, which includes over 100 different cryptocurrencies available for deposit as well as credit card purchase availability. Binance maintains a very easy to use interface when it comes to trading; they also enable an “Advanced” trading portal that can be opened if you’re looking to start more advanced strategies and ‘charting’, which is analyzation of price movements placed on a visual scale, and even create more precise order types.

While purchasing actual underlying assets has its advantages, exchanges such as Markets.com have created a very effective blend of traditional equities and derivatives market trading security and cryptocurrency CFDs. The platform, enabled in a variety of jurisdictions, offers interactive CFD trading with an operating entity overseen by a FTSE250 subsidiary; in other words, the exchange has integrated oversight and trading technology that has proven effective in institutionalized markets where billions of dollars, if not trillions of dollars in capital flow safely in and out of the markets on an almost monthly basis. This level of security demonstrates that Markets.com maintains a level of security in their processing that other CFD brokers haven’t caught up with yet; a clear edge for traders.

CryptoRocket has become an important name in the market, not only it is a multi-asset broker that offers access to a vast majority of financial markets, but it is also a pioneer in the crypto trading market. The firm currently offers Bitcoin trading through CFDs, allowing individuals to trade BTC with incredibly fast execution. This fast processing allows trades to be opened and/or closed in milliseconds.

Disregarding the type of strategy that you are following for your trading, CryptoRockets offer a platform that will suit most types of trading (swing trading, Day Trading, Scalping, etc). If you are interested in a fast and cheap option to trade BTC like a pro, you should consider CryptoRocket as your go-to option.

How can I Trade Cryptocurrency in My Country?

There are a large number of platforms that enable Bitcoin trading within the UK. Plus500 is arguably the best option namely because 1.) It is actively regulated by the FCA, and also 2.) It also enables a variety of different deposit methods including credit card and PayPal. These methods can be linked very quickly and easily within seconds.

You can also trade Bitcoin CFDs on sites such as Plus500 as mentioned above; Binance is another alternative. Bitcoin trading can be done on Binance if you’re in the UK, however, at the moment Binance is not actively regulated by the FCA, and does not enable trading of any contract products such as CFDs. Rather, you’d be trading actual Bitcoin.

If you’re interested to try automated bitcoin trading, it’s highly recommended that you check out Bitcoin Trader robot. It’s an automated trading software made by Gary Roberts. By automatically checking the market trends and executing bitcoin buy or sell orders within as fast as 0.01 seconds, it can allegedly help you get profits quickly.

Bitcoin can be traded in the USA through a number of different methods. If you’re looking to trade Bitcoin by using an investment vehicle, such as a CFD, which is as previously stated a contract for difference, you can do so on eToro. When buying a CFD on eToro, you’re not actually buying Bitcoin itself, rather only its price value, so it can be deemed in many cases, a more efficient vehicle for trading than simply purchasing the asset itself.
You can also trade Bitcoin in the USA through other platforms such as Binance, however, in cases such as these, you’re rather buying the actual asset of Bitcoin, not just a price representation. Trading strategies can just as equally be implemented, however.

Residents in US and Canada can also get try automated bitcoin trading through the Bitcoin Trader robot. It’s well-known for helping many traders get a minimum profit of $1,300 per day.

If you’re in Australia or New Zealand, buying Bitcoin with PayPal may be restricted in some areas. The ideal answer is to utilize Plus500 and its built in PayPal functionality. Through this method, you’re able to link your PayPal account directly to your Plus500 platform account and fund your trading portal directly through this process. PayPal integration is supported through Australia and New Zealand on Plus500, as well as all trading functionalities. In this way, all that’s required is to verify your Plus500 account, add your PayPal account as a funding method, and fund the account. Then, you’re free to purchase Bitcoin CFDs directly on the platform as instructed previously.

The Bitcoin Trader robot is also recommended for Australians who want to give automated bitcoin trading a try. The trading signals from this trading software is said to give traders up to 88% possible return.

Bitcoin Trading Tips and Things to Avoid

Tips

    Cut your losses – Use stop losses and make sure you have exit strategies on a position. Use margin responsibly – Margin trading, lets you trade Bitcoin with more money than you actually have. This means you can make gains faster, but it also means you can lose money faster. Use this margin responsibly. Use programmatic strategies – If you learn to code, a whole new field of trading Bitcoin can be opened. Through certain algorithms that trade based on finite parameters, there are a plethora of different opportunities when it comes to both analysis and execution that is possible when engaging in programmatic trading. Learn different methods – Expanding your knowledge as far as trading strategies, utilities, and methods will only help you in making the most money trading Bitcoin. Size your positions accordingly – Ensure that whenever you’re trading, you’re putting the correct amount of money into a trade, but also that you’re keeping tabs on specific sizing methods. Stay up to date on updates and technological changes – Bitcoin and bitcoin trading employs tools and different types of technology that is constantly changing. Try to stay current with new tools, updates, and frameworks that are being released. Find the best brokers tailored for you – Each person has their own trading style and individual methods they develop. Find brokers/exchanges that are the best suited to your trading needs.

What to avoid

    Trading based on emotions – One of the biggest mistakes a trader can make is trading immediately off of emotions or feelings. This can lead to large losses and irrational movements; the best traders trade strictly without emotion. Not using demo accounts – Almost all exchanges, especially ones that support CFD trading, implement “Demo” accounts which are accounts that allocate imaginary money to your trading portal for you to play with. If you are a novice trader and yet you don’t take advantage of demo accounts to practice trading using fake money, then there is a high chance that you’ll lose real money in no time at all. Not reading company news – Cryptocurrency prices and volume can be heavily reliant on company news and releases. If Ripple releases an announcement that XRP will be used as the main currency at Santander, that will definitely shift prices upward; staying up to date on this news is important for trading.

How Much Can I Make?

How much you can earn by trading bitcoin largely depends on your trading experience, industry knowledge, capital, total time allocated for bitcoin trading, patience and trading strategies.

According to a Cointelegraph report, 95% of bitcoin traders fail. This is largely because many of them thought that they can easily make money by trading bitcoin. However, this is not the case. In fact, the cryptocurrency market is deemed as one of the most difficult markets for beginners. The high volatility of the market also mostly doesn’t help newbie traders.

Also, Cointelegraph stated that professional bitcoin traders can turn $10 into $1,000 through leveraged trading. However, this is something that is not easy to achieve.

If you think that bitcoin’s price will go over $20,000, you can also be a long-term holder and invest $1,000 once its price is at $10,000. By doing so, your $1,000 will become $2,000 once bitcoin’s price reaches $20,000.

What is the Difference Between Trading and Buying Bitcoin?

Trading

    Associated with quicker, shorter term positions (Seconds, minutes, hours, days) Brokers enable trading with margin through CFDs Trading using leverage requires less capital to get started

    Trading is usually associated only strictly on price reliance. It does not use the underlying asset for utility Considered riskier than buying the asset outright

Buying

    Buying outright enables cryptocurrencies to be owned, sent, and received Considerably less risky
    Buying outright is associated with longer terms – weeks, months, years Brokers don’t enable purchase outright of an asset on margin; rather you’d have to seek a bank or loan provider Leverage cannot be used on brokers in an outright purchase Buying outright requires larger minimums usually

Want to Trade on the Go? Top Bitcoin Trading Apps for 2020

As we enter 2020 and the virtual currency market keeps moving forward, there are some crypto-related applications that every single trader and crypto enthusiast must try at least once. Some of them are going to help users trade digital assets, while others will be helping investors to keep track of their portfolio.

The next bull run in the crypto space will attract new investors and users to the space. Thus, having applications that advanced and inexperienced users can download is always an advantage. In this article, we have reviewed and ranked a number of bitcoin apps currently on the market. Read on to find out which bitcoin apps we have found to offer real advantages when it comes to cryptocurrency trading.

Robinhood allows individuals to invest in stocks, ETFs, options and cryptocurrencies. This is one of the favourite applications for millennials in the US market. Robinhood’s main feature is that it does offer its services based on a commission-free scheme.

Welcome to Kraken.
We put the power in your hands to buy, sell and trade digital currency.

We are Kraken, consistently rated the best and most secure cryptocurrency exchange.

How can we help you get started?

I’m new to crypto. I need someone to explain how it all works.

I’m trying to take my digital investments to the next level.

I’m looking for something my current exchange doesn’t offer.

I’m a company with unique needs from my exchange.

New to cryptocurrency? No problem. Digital assets may seem confusing, but we’re here to help.

New to cryptocurrency? No problem. Digital assets may seem confusing, but we’re here to help.

Our crypto guides will help get you up to speed.

While the concept is simple, we know that aspects of cryptocurrency can seem a bit complex.

Our resource center will help guide you through the basics of trading digital assets and how it’s changing the way the world thinks about money and finance.

Kraken gives you the power to hit the ground running, no matter your experience level.

Kraken gives you the power to hit the ground running, no matter your experience level.

An intuitive experience from the start.

From day one, we designed and built a streamlined bitcoin exchange for newcomers and experts alike.

Make easy deposits and withdrawals, measure your portfolio’s performance and keep track of all of your digital assets in one convenient place.

Kraken is the most trusted cryptocurrency exchange on the market.

Kraken is the most trusted cryptocurrency exchange on the market.

Trade with confidence.

Earning the trust of our clients has always been our highest priority. We earn that trust through the best security in the business — most of our digital assets are held safely in cold wallets so bad actors can’t reach it.

Our platform provides world class financial stability by maintaining full reserves, healthy banking relationships and the highest standards of legal compliance.

No matter what, we’re always here for you.

No matter what, we’re always here for you.

Global 24/7/365 support.

We pair our global 24/7/365 live chat with an extensive Support Center to help ensure your questions are answered and your needs are met around the clock — no matter who or where you are.

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