The Beginner’s Guide to Bitcoin Trading
After a rough end of 2018, the cryptocurrency industry is recovering nicely in mid-2019. The Bitcoin prices are back to around $10,000 per unit — a figure that hasn’t been seen since early 2018. This recovery of the cryptocurrency market is leading to a lot more people getting interested in Bitcoin trading and investing.
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But how do you go about starting your journey to Bitcoin trading? What should you know about the market? If these are questions or concerns you have, you’ve come to the right place. This blog post is going to cover everything you should know if you’re looking to get started with Bitcoin trading.
Know the Difference Between Trading and Investing
An important place to start is that you need to actually know what Bitcoin trading is. Many people think Bitcoin trading = Bitcoin investing, but that isn’t the case.
Bitcoin trading is when you look to make a profit by consistently buying Bitcoin when it is low and selling it once it gets high. On the other hand, investing is when you buy Bitcoin with the sole goal of holding it (potentially for years) in hopes that the value of your investment increases and grows. Trading involves predicting the movement of prices.
While there are no perfect methods for predicting prices, there are some tricks you can keep in mind. For example, if you look at the big picture, such as Bitcoin news, regulations, new partnerships and more, you could potentially get an idea of where the price may go.
However, it is important to know that predicting the price movement of Bitcoin and other cryptocurrency is tough. Cryptocurrencies are incredibly volatile and can move multiple percentages points up or down within any given day. Thus, risk only the amount of money you can afford to lose. You could lose your investment quickly if you’re not careful in the cryptocurrency space.
Know the Terms
Another important thing to remember when getting started with Bitcoin trading is to know the terminology. There are several terms you will see getting thrown around on websites or in videos that you might not truly understand. Without knowing these terms, navigating the industry and trading successfully can be pretty difficult.
This is a good list of terms, so it would be wise to read through and do your best to understand the terms. While you don’t need to know them all, it’s a good idea to familiarize yourself with some of the more popular and common ones.
Find an Exchange and Wallet
Now that you know the fundamentals, terms and basics, and understand the risks involved with Bitcoin trading, it’s time to learn how to get started.
The first thing you should do is find an exchange that you want to work with — the exchange where you will actually buy, sell and trade your Bitcoin.
If you are planning to trade frequently, you want to register with the exchange that has low fees. This way, you can keep as much of the profits as possible. Of course, security should also be a major concern of yours when selecting an exchange. A good way to learn about a platform and its features is to do a Google search and look for reviews, reputations and their own sites. Also, each cryptocurrency exchange will have different steps you need to take in order to verify your identity and register for an account. So ensure you are fine with the requirements the exchange imposes, otherwise you will be unable to get an account.
While you can keep all of your cryptocurrency on an exchange, your next mission is to get a cryptocurrency wallet. Using a wallet is much more secure and give you peace of mind that not all of your Bitcoin is kept on an exchange. There are numerous different types of wallets out there, split into the hot wallet (kept online) and cold wallet (kept offline) categories.
A Few Tips for Beginners
Once you are registered and verified on an exchange, you are free to fund it with whichever method you prefer and can begin trading Bitcoin. Now that you are aware of what is needed to get started with your Bitcoin trading and investing journey, we thought we’d include a few trading tips to help you along the way:
- Have a plan. If you trade your Bitcoin without a plan of when you are going to buy/sell and the techniques you are going to use, being profitable may prove difficult.
- Use sound judgement and don’t allow your emotions to dictate your choices. Never allow FOMO to lead you to trade. Also, watch out for greed, as well.
- Continue to keep up with the news and happenings in the space. The more educated and knowledgeable you are about the industry, the better you will likely be as a trader.
- Only trade what you can afford to lose. We cannot stress this enough. It’s easy to get carried away when trading cryptocurrency, so be careful.
In conclusion, we hope that this article has helped you learn what to do if you want to start with Bitcoin trading. Of course, before you decide to start investing in Bitcoin or any cryptocurrency, ensure you put time into completing firsthand research whether it is right for you or not.