Every person who has used the internet or watched the television has come across the word Bitcoin in the last few years. News channels, newspapers, social media platforms – everyone is talking about this Bitcoin. But what is all this hype about? What exactly is Bitcoin, and why is everyone talking about it these days?
Bitcoin is a digital asset that does not have a physical existence. Instead, these digital cryptocurrencies are stored online in e-wallets. In general, the trading of bitcoins and cryptocurrencies is carried through blockchains, ensuring the safe and error-free trading of these virtual assets. To learn more about Bitcoins and trade them through a secure platform, one can visit BitcoinMotion.
It was developed by an anonymous Japanese developer in 2009. During this period, the world was suffering from a global recession. As a response, Bitcoins were created as decentralized virtual trading currencies. Since then, the usage of these virtual assets has constantly been rising.
How Does Bitcoin Trading Work?
Traditional currencies like notes and coins are centralized means of exchange. They are controlled and governed by the respective countries’ legislative authorities and central banks.
However, the trading and functioning of cryptocurrencies are independent of any governments or banks. Bitcoins work over a decentralized network of independent individuals who manage these currencies through blockchains.
One significant point is that Bitcoins are independent of a native currency. An investor’s investments are regulated by the country he resides in. The transactions are transparent, and no hidden fees are applied for trading these digital coins. Moreover, without bank intervention, the opening and closing hours are flexible.
Where To Start?
The main objective of Bitcoin trading is purchasing coins at the lowest prices and selling them as high as possible. One must retain these coins for a long time while speculating their prices. It requires a thorough analysis of the whole cryptocurrency market.
One can analyze Bitcoin prices using two different methods. One of them is fundamental analysis, and the other is technical analysis. Becoming a successful Bitcoin trader requires a lot of time, effort, and money.
If one wishes to enter into bitcoin trading but doesn’t know how and where to start, the following basic steps will be helpful for a beginner to trade through Bitcoin exchange platforms:
Open an account or sign up on the trading platform. One must complete the registration process and ensure all the information provided is authentic to avoid any trouble in the future.
Link the platform account with a bank account or payment card. Linking the bank account requires a lot of time as it involves a lengthy registration process. Credit cards can be connected to the platform within a few steps and are relatively safer to use while trading Bitcoins.
Add funds to the account. Once signed up, one must deposit their Bitcoin accounts to start trading.
After in-depth research and fundamental analysis of the market and the prices, one can start buying and selling this currency on the platform.
Valuable Tips For Trading Bitcoins
Trading cryptocurrencies can be confusing for some, especially if the investor is just a beginner. Following are some useful tips for novice investors to earn enough profits:
Starting With Small Investments
Beginners need to start trading bitcoins with small initial investments and proceed further with analysis and caution. Though the market promises massive gains to a few lucky ones, one cannot rely on their luck and lose thousands of dollars on the initial investment. As a beginner, one should go for smaller investments and gradually add more with experience and expertise. A rule of thumb for investing in these volatile markets is not to trade more than one can afford to lose.
Choosing Protected Wallets
Bitcoin wallets hold the key to one’s digital assets. Just like people store their valuables safely in a protected locker, even these virtual currencies need a secure platform to store the currency.
One can use the wallets provided by reputed brokers or can choose their own wallets. The two major types of wallets are cold and hot wallets. Both are used to store cryptocurrencies but differ in their features and functionality.
Hot wallets are open to hackers as they are connected to the internet but provide instant access to the funds. If the amount of bitcoins is lower, hot wallets are most suitable. However, if the account holds high-value reserves, it is best to opt for cold wallets as they are offline and store the assets physically.
Conducting Market Research
One cannot rely on the news and other investors’ speculation when trading bitcoins. The bitcoin market is slightly more complicated and speculative than other cryptocurrencies. Hence, one should do their own research and analysis of the crypto market. One needs to study various charts and graphs, identify subtle patterns, and apply this knowledge to formulate a trading plan. It takes time and effort but is worth the potential profits.
Trading Strategies To Earn Maximum Gains
A successful investor always builds a strategy to trade bitcoins which involves a lot of planning. This planning specifies which trades will be made when, how much to be invested, when to exit the trade, and much more.
Following are some of the modes used in trading strategies recommended by experts:
Scalping
Traders benefit from this strategy by earning small profits through slight price fluctuations. Accumulating tiny daily profits eventually leads to a considerable amount over time.
Swing Trading
This is the recommended strategy for beginners. Traders usually trade for some weeks or a couple of months and then exit the trade. It gives enough time for investors to contemplate their transactions without being irrational or emotional.
Position Trading
Here, the trading positions are held for much longer, for months or years. Traders conduct in-depth analysis, which helps them evaluate prospecting market trends and price changes. Traders can identify market and trading patterns through this strategy.
The Bottom Line
Being a successful Bitcoin trader is not easy. A trader must dedicate a lot of time and effort to study the market and making decisions accordingly. As a beginner, it is advisable to start small and follow expert advice rather than going all-in. Eventually, one may gain the necessary skills and experience with regular practice and research.