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Bitcoin is one of the time-tested cryptocurrencies and has over time proven to be quite profitable for both professionals and beginners. This digital currency has a huge market and is traded on all the exchanges you may ever come across, making it highly liquid.
But perhaps what contributed greatly to its ability to attract many investors is its history of volatility and bubbles. In this guide on trading Bitcoin for beginners, I will share with you everything you need to know about trading the coin to enable you to trade like a pro.
It is essential to learn why you should be trading Bitcoin prior to investing in it — below are some of the reasons why Bitcoin trading is important. Bitcoin was the first cryptocurrency to be established back in The coin has been around for close to a decade now. More recently, various government agencies are beginning to be keen on incorporating Bitcoin and Blockchain in their operations.
You can find more details about this in the video below:. Bitcoin operates on a market where trading takes place at any time of the day regardless of where you are.
Unlike most other digital currencies, Bitcoin is acceptable in most parts of the world as a medium of exchange in various establishments, such as restaurants, transport companies, investment vehicles, and so on.
The price pattern of Bitcoin has always been shifty. In especially, Bitcoin has experienced some of the major shifts in its prices, both upwards and downwards as may be seen below:. This is the first step when looking to invest in Bitcoin to enable you to buy or sell your digital assets.
At the moment, Bitcoin does not have an official trading platform; however, as I mentioned earlier, you will find it on almost any exchange you can ever think of.
Think of Bitcoin as the backbone of any cryptocurrency exchange and it would probably be insane for any to miss it. Due to not having an official exchange, a lot of users find it difficult to identify the right platform for trading Bitcoin. Safety standards: It goes with saying that safety is a fundamental ingredient in the cryptocurrency space.
Many users lose money every day due to coin burglars; be sure to research the level of safety in a platform using online reviews. Look out for any cases of a security breach in the recent past. You want to avoid exchanges with hacking histories or system failure. Reputation: A good exchange has its users speak for it — check out various forums such as Quora, Reddit, BitcoinTalk, and more to find out more about an exchange that you wish to sign up on. You should be keen on finding out how efficient their customer support is, the experiences of other users, as well as the pros and cons of the platform.
Of course, you should expect to find some flaws with every exchange, but you want to settle for something that is almost negligible. Payment methods: The last thing you want to do is to sign up on a platform that offers payment methods that are not supported in your locality or, if supported, you have to travel miles to access an agent or a dealership.
Transaction fees: Yup, you guessed it right! Some exchanges offer free deposits and withdrawals, while others charge for all other transactions except for trading.
Whatever the case, do a thorough research of some of the lowest if not nil-charging platforms for user transactions.
The point is, signing up on a platform that is easy to navigate will save you tons of trouble if you ask me. From our checklist above, below are some of the platforms that pass the set standards of a great exchange.
Coinbase is among the top-rated exchanges globally. They have some of the bests security measures and trade only a few selected coins Bitcoin obviously included. Due to their quality and security standards, their expansion to many countries has been quite slow.
At the time of writing this post, the exchange operates in 33 countries around the world. Coinbase is said to be the first regulated exchange to start trading Bitcoin, an asset that now forms the biggest chunk of their daily trading volumes.
This is another popular platform that trades Bitcoin and other digital assets. Binance originated in China but moved its headquarters to Malta, which is one of the crypto-friendly countries. This platform is fairly new in the market, having only been launched in , but they have managed to match up to the safety, trading, and customer support standards that have only been achieved by platforms that have been around for close to a decade.
In terms of trading, Binance has consistently remained among the top five highest trading exchanges globally. Kriptomat is a product of Slovenian crypto expertise and it offers an extremely user-friendly experience.
Kriptomat was established in Estonia, one of the most progressive tech regulators. They have been issued operating licenses by the Financial Intelligence Unit for Providing services of exchanging a virtual currency against a fiat currency and for Providing a virtual currency wallet service.
The service currently allows you to exchange 17 cryptocurrencies and tokens to and from Euros. It is also available in 20 languages, making it a great choice for people who want to use their native language. In addition, their blog offers educational content, mostly geared towards beginners, but also useful for people wanting to remain informed about the crypto industry. Established in , Cex. Just like Cex. The exchange initially had most of its operations limited to Europe but has over time spread its wings to 78 countries around the world.
Bitstamp is popularly known for its ability to cater for beginner and advanced users through its two sets of interfaces: beginner and advanced. Kraken is an exchange that operates globally and has been around for five years now.
The list goes on and on, but hopefully, you can now be able to choose from the five listed exchanges or use the checklist above to identify a suitable Bitcoin trading platform for you.
Investing in Bitcoin denotes that one buys the coin and holds it for the long-term. The fundamental strategy behind investing in Bitcoin is that such investors believe that despite market corrections, the price of their assets will ultimately go up. On the other hand, trading Bitcoin means that an investor purchases the coin and sells it after a short period of time, a duration normally occasioned by small moves in market prices.
So, really the difference lies in the duration of holding your Bitcoin; investors hold their assets longer while traders hold theirs for a shorter period of time. All Bitcoin traders have one thing on their minds when buying the coin: making profits. But that is as far as their goals align, how they achieve this differs from one category of traders to the other.
There are typically three types of traders in the cryptocurrency markets; whichever one you choose to become or already are is really a matter of personal preference. Day traders are people who execute several trades during the daytime, trying to mint as much profit as possible with fairly short moves that could last seconds, minutes, or hours. These traders spend a lot of time making dozens if not hundreds of trading moves within the 24 hours of a day.
The idea behind this type of trading is to sell out as fast as possible by locking in any small profits that are generated. Swing Traders: This category of traders profit from the slight swing in the prices of assets. Swingers study the trend of prices and try to enter into a market at the start of a price movement and stay on until the movement stops, then get out with profits. Unlike their day trader and scalp counterparts, they try to see the bigger picture in the market; they could hold on to assets for weeks as they monitor the movement in prices before bouncing off the market with profits.
There is no perfect way of predicting the market price of Bitcoin or any other asset. However, you can develop a set of rules, formulas, and predictions to help you trade profitably even in the most volatile markets or use existing and proven ones. The most important thing is to always trade in such as way that your closing balance remains on the positive side.
There are two methodologies that are commonly used in analyzing any asset traded in an exchange: the fundamental or the technical point of analysis. This technique uses the trends in price movements and trading volumes to try and establish a common pattern in all the possible scenarios. Analyzing prices using the fundamental approach: This approach would analyze Bitcoin prices using influencers such as news about the coin, latest technological developments such as the lightning network, regulations affecting the currency, among other issues.
Analyzing prices using the technical approach: As the name suggests, this approach tends to rely more on the past data about Bitcoin. Regardless of what is going on around the world, the technical approach will use verifiable data to predict the price of an asset. For instance, when there are no new or latest happenings around the world, you may opt to lean towards the fundamental approach; but when things are stable, I recommend going with the technical approach.
The order book: This is a market register of all the buy and sell orders. Bitcoin price is the price of the last trade that occurred on a specific exchange. It is essential to understand that as opposed to fiat currencies, there is no standard price for Bitcoin; prices may vary from one exchange to another or in different countries. Volume: This represents the amount of Bitcoin that has been traded within a certain period of time, usually 24 hours, a week, a month, or a year.
Limit order: This is a market order that allows you to buy or sell Bitcoin and other cryptos at a specified price. That is to say, if the requirements for your order are not met, your order will remain unfulfilled until such a time that they shall be met. Stop loss order: Stop loss orders are sell orders that restrict your selling price from falling below a limit specified by you. This type of order shields sellers from incurring losses resulting from negative fluctuations in the prices of their assets.
Instant or market order: Unlike a limit or a stop order, this is an order with no conditions that need to be met prior to being executed. Market orders allow buyers or sellers to set the amount of Bitcoin they wish to dispose or acquire and the exchange matches them with the corresponding order. A maker is pretty much a seller of an asset in an exchange; however, this is a different kind of seller. Since makers help to make the market, they are charged lower fees by the exchange. A taker, on the other hand, places a market order for an asset that has already been placed by the maker; therefore, their orders are fulfilled instantly.
Takers take away business from the market, thus paying more fees as compared to makers who bring business to the market. A good number of people have no idea what those complex charts on the home pages of various exchanges mean. But interpreting these charts is never that hard; here is what you need to know about price charts. Candles sticks are an ancient Japanese way of conducting a price analysis and originated in the s when trading rice. Depending on the color of a candle, you will be able to tell whether the opening price or the closing price was high or low.
Generally, a green candle signifies an opening price that was lower than the closing price while a red candle shows that the opening price was higher than the closing price.
Green candles show a rise in the price of an asset during a certain period, while the red ones show a fall in the price of an asset in the same period. Below are some of the time-tested tips for both beginners and advanced traders; try as many as possible to apply them when trading. Trading Bitcoin profitably can be difficult especially when the market keeps correcting — however, if you develop a solid plan and familiarize yourself with the things discussed in this guide, you should be able to trade more profitably than an averagely experienced trader even as a beginner.
Finally, as we come to the end of this guide on trading Bitcoin for beginners, we have covered most of the areas in this trade that you can start trading today. Your email address will not be published. Previous Article. Next Article.
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Bitcoin is one of the time-tested cryptocurrencies and has over time proven to be quite profitable for both professionals and beginners. This digital currency has a huge market and is traded on all the exchanges you may ever come across, making it highly liquid. But perhaps what contributed greatly to its ability to attract many investors is its history of volatility and bubbles. In this guide on trading Bitcoin for beginners, I will share with you everything you need to know about trading the coin to enable you to trade like a pro. It is essential to learn why you should be trading Bitcoin prior to investing in it — below are some of the reasons why Bitcoin trading is important. Bitcoin was the first cryptocurrency to be established back in The coin has been around for close to a decade now. More recently, various government agencies are beginning to be keen on incorporating Bitcoin and Blockchain in their operations.
From all these three cases, we can make one simple and obvious conclusion. Copy Copied. Another method which works for most countries in the beginners guide to trading bitcoin is a P2P exchange. Trading Bitcoin profitably can be difficult especially when the market keeps correcting — however, if you develop a solid plan and familiarize yourself with the things discussed in this guide, you should be able to trade more profitably than an averagely experienced trader even as a beginner. I live in a country Ghana, where we are yet to have a legislative instruments on crypto currency. Bitbuy is a Canadian owned and operated digital currency platform. Kriptomat is a product of Slovenian crypto expertise and it offers an extremely user-friendly experience. Like what you read? While in essence still being a cryptocurrency, Bitcoin has become an actual currency that can now be spent, invested, saved and traded. The two kinds of cold wallets that we would recommend are hardware wallets and paper wallets.
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