Trading or investing in Bitcoin may seem a little complicated, but it becomes much easier if we break it down into the steps to be followed to trade Bitcoin and make the most possible benefit from this investment. Bitcoin trading has become popular with the passage of days and Bitcoin transactions have become easier and legal Exchanges and wallets are increasing over time.
What is bitcoin trading
Bitcoin trading is the way a customer can speculate on the price movements of the digital currency, while this traditionally involves buying bitcoin through an exchange. Hopefully the price will go up later. Cryptocurrency traders are increasingly using derivatives to speculate on rising and falling prices in order to get the most out of Bitcoin's volatility.
We must differentiate here between buying and selling Bitcoin with actual possession of the currency or just trading it for a specific time without actually owning it. There is a big difference between buying Bitcoin through the Bitcoin Blockchain and trading it on many other exchanges.
Whereas, buying a bitcoin through the Bitcoin Blockchain platform means that the customer has owned it for the currency and that reselling it depends on finding someone to buy it again at a price that suits both parties, which takes some time or a lot of time, which makes the customer in this case vulnerable to loss in the event the value of the bitcoin decreases Its market price has fallen.
In the event that the customer trades the bitcoin through CFD trading, the customer can benefit from the price movement down or up without obtaining a real ownership of the currency, which means that the customer will trade bitcoin with the lowest possible losses and the largest possible profit, and he will not need to find another party Sells to him or buys from him in case he reverses his decision to keep the currency or buy more of it again.
Learn what moves bitcoin's price
You must first know what affects the price of bitcoin, up or down, in order to be able to seize opportunities and achieve the desired profit. The factors affecting the price of bitcoin are summarized in the following points:
Supply of currency or available quantities: The maximum supply of bitcoin is currently set at 21 million coins, and this amount is expected to be exhausted by the year 2140, which means that the price of bitcoin can rise in the coming years if it rises demand for it.
Bad news
Any breaking news that raises concerns and concerns regarding the security or value of the bitcoin and its longevity that negatively affects the overall market price of the currency.
Merger
Bitcoin’s public profile depends on its integration into new payment systems and banking frameworks, if this is successfully implemented the demand for the currency may rise which will have a positive impact on the Bitcoin price.
Main events
Regulatory changes, security breaches, and bitcoin announcements at a macroeconomic level can all affect the price of bitcoin.
Pick a bitcoin trading style and strategy
In the following lines, we will mention how to choose a Bitcoin trading strategy:
How to day trade bitcoin
Daily trading of the bitcoin means that you open and close a position on the same day, meaning that the trading will be within one day, which means that you will not be exposed to the fluctuations of the bitcoin market overnight, and this method of trading will also avoid you incurring more costs imposed by some companies between the day The other is what is known as overnight charges.
Furthermore, this strategy may be suitable for you if you are looking to profit from short-term currency price movements, and also enable you to get the most out of the daily fluctuations in the bitcoin price.
How to trend trade bitcoin
It is trading and taking a position that corresponds to the current market trend, for example, if the market is in an uptrend you can buy and if the trend is down you can sell, if the trend starts to slow down or reverse, you can consider closing your position and opening a new position to match the trend.
Choose how you want to get exposure to bitcoin
Hedging reduces your exposure to risk by taking a position opposite to an already open position. You can follow this strategy if you are concerned about the market moving against you.
HODL Strategy (Buy or Hold Bitcoin)
Bitcoin should only be bought and held if you have a positive long-term view of its price. If your research or trading plan says that you should sell your position to take profit or limit loss then you should, or you can set a stop loss and close your positions automatically.
Buying bitcoin through an exchange
You can buy bitcoin through an exchange directly with a credit or debit card. The best way to buy bitcoin through an exchange is with a Visa or MasterCard. You can buy it directly from other people in person or over the web on your terms.