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March 06, 2018

Beginners Guide to Bitcoin Trading

If you are looking to invest in bitcoin market, then you must know, in advance, that this is a very high-risk market. Do not invest more than what you are willing to lose. This market is very volatile and it is not uncommon to see 20%, 30% and even 40% swing in its price every single day.

If you are on the right side of the trade, it is pretty easy to see that it is making some very quick profits. However, if you are on the wrong side, then you can lose a lot of money very quickly.

How to Trade Bitcoin

You can be an investor in bitcoin market; that means you will purchase some cryptocurrency and hold on to it and hope that the value of bitcoin will rise from its original value for which you bought it.

However, if you chose to be a trader, then you must know how to trade cryptocurrency to earn a profit. It means you will purchase cryptocurrency and utilize the volatility of the bitcoin market to sell in and out of the trade. It goes to ‘buy low and sell high’ rule.

Bitcoin Trading Investments to Earn Profit:

It could be a mixture of both. Some of the bitcoins are those that you will hold on and save for long-term investments. Therefore, you are not worried about the fluctuations in the prices. However, there are other coins that you trade short-term. You can use the fluctuations in the prices to earn the profit immediately.

It is, therefore, up to the bitcoin trader that what are their goals are and what level of risk they are willing to take. The two trading techniques are discussed below.

Importance of Cryptocurrency Wallet

First of all, buy bitcoins. For beginners, it is recommended that they buy them from coin base. It is a very reliable and trusted network. It sells many types of cryptocurrencies, but you can select bitcoin for yourself. Afterwards, you can select how much you want to buy. They charge you fees for delivering the bitcoins to your online bitcoin wallet.

This is the first and the last step if you are trading for long-term. You can now check it after every few months and years. The price is most appreciated after a year, so, you can use them to earn you profit at the time you like.

However, if you want to trade bitcoin for other currencies, then at this step you can put your bitcoins on an exchange. It is like a stock market. So, once you select your coin market, you will be presented with the buy, sell and transaction history of that currency. This is where you can go and place your order.

It is always recommended that once you purchase your coin, to remove it off of the exchange and transfer it to your actual wallet. In the end, it all depends on you that if you want to go on a long journey or you want to trade in and out of it. 

Edited by Mandi Nowitz
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