There has been a lot of talk of late about trading cryptocurrency. Over the last year or so, Bitcoin and other cryptocurrencies have become very famous. While one may argue that cryptocurrency has been on a slow rise ever since its inception a decade ago, you cannot argue with the recent boost in publicity that it has gotten. As foreign bodies around the world accept cryptocurrencies as legitimate trading and exchange options, many more people are bound to take a keen interest in the cryptocurrency game. This is where you come in. After going through this entire article, you will have all the information you need to get into and experience the Bitcoin trading game.
The Basics
One of the first things you need to understand is what exactly is Bitcoin trading and how does it work. While exchanging virtual coins on the internet does come across as rocket science, the truth is that it is very similar to most other forms of trading. As is the case with any kind of trading, Bitcoin trading too has its distinct characteristics. This does not make it any different than other forms of trading. It’s simply just a few top-up things you need to know.
This is a very profitable market for all kinds of people as it has no set limit on timings. The Bitcoin trading market is open 24/7, unlike any other platform. This gives you the ability to be your own kind of trader and utilise changes in price to your advantage at any given time. This market is decentralised and you won’t have any financial obligations associated with it. You will however require an e-wallet from a trustworthy platform to get started. You can even have holdings in various platforms to customise your game.
Types of Traders
At its core, Bitcoin trading is the very simple procedure of buying assets at a desirable price and selling them for a profit. For serious cryptocurrency players, this is a long term game that can give massive amounts of profit in the future. These players invest money in Bitcoin and keep it tied up for a long time through ups as well as downs. Eventually, something drastic happens where the Bitcoin price shoots up by a lot and their profit magic is much bigger than most others. Entering the market does not necessarily mean that you have to be a long term player. You can also invest and trade over shorter periods of time for profits as per your convenience. You can even be a day trader who sells at the right time to keep a steady source of low yield profits going. There is also always the option of scalping which is less common albeit effective in its own way.
Many people buy an asset on one exchange and sell it on another to get quick profits and keep doing that. Short term trading is generally preferred by new Bitcoin traders for a number of reasons. For starters, it is important that a new trader get some initial profit for his investment. Otherwise, they may have to keep pouring from their pocket thereby increasing the risk amount. Short term trading is also much more stable as it is low risk and low reward. It also keeps you more involved in the market so you can learn the market better with hands-on experience.
Practise makes perfect
Most of the trading accounts today, for instance created with https://bitcoindigital.io/, will let you make a practice account first to understand how the market works. While you may feel like you are ready to swoop into trading, it is always a good thing to spend some time with a practice account first. With a Practise account, you get a certain sum of money which you can invest like you would in the real-life market. From there onwards, you are basically using fake money on the real market to see how well you can do.
It is important to know that the whole purpose of a practise account is not to make a profit. It is rather to understand yourself better. You will undoubtedly find out that you have a few flaws. Now you must bear this in mind when trading with real money so that you can avoid making mistakes that will cost you dearly. A practise account is also a great place to learn financial discipline. It is important to set boundaries with things before entering the game and then adhering to them. For starters, always ensure that you are only investing how much you can afford to lose.
Choose What Works Best For You
With Bitcoin and other forms of cryptocurrency, a lot of your trading is carried out on what you cannot see. This is why it is always better to ensure that what you can see is what you like. There are a bunch of platforms out there where you can practise trading. It is suggested that you check out a few platforms and get familiar with their interface, withdrawal system, reviews etc. You don’t want to go for a platform that may be susceptible to cyber-attacks. There are various good platforms out there and you will even find pages dedicated to analyzing them. Additionally, if you like the interface, trading will be much easier for you.
It is also important to choose the perfect e-wallet for you. There are cold wallets that don’t have any information online and hot wallets that are convenient but slightly more susceptible to attacks. Before going for a cold wallet, understand the features of both kinds and find one that works well for you. You can even find various hot wallets that are highly secure so just be sure to choose the one that suits you best.
Conclusion
Overall, it is preferable to take things slow at first. This way you will be able to understand and analyze what you’re doing well and move forward with cautions. There is a lot of hype about Bitcoin today but never forget that it requires time and patience too.
