So, you want to get into trading bitcoins. Good for you! Bitcoin provides a profitable way to invest your money and save extra cash for a rainy day.
If you’re interested in learning about day trading bitcoin, keep reading. This guide breaks down trading bitcoins for beginners so that you can start taking advantage of this wonderful cryptocurrency. Let’s dive in!
Learn What Affects the Price of Bitcoin
The first step to understanding how to trade bitcoin is knowing the factors that affect its price. These factors include:
- The supply of bitcoin
- Bad press
- Its integration into public payment systems
- Regulation changes
- Security breaches
While there are several factors that will affect bitcoin’s price, asking “what is bitcoin trading at?” is an important part of knowing how to trade it. Look into what its current price is before making any purchases.
Pick a bitcoin trading style and strategy
Next, you need to think about how you are going to trade bitcoin. There are a few ways that you can do this:
- Day trading
- Buy and hold trading
- Bitcoin hedging
- Trend trading
Each strategy offers different benefits and it’s important to research which makes the most sense for you. That way you can maximize your investment. You can get info on the best strategies by analyzing your investment portfolio and looking at what seems to be the smartest decision.
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Choose to Go Short or Go Long
When you are trading cryptocurrency, you can either go long or go short. This is simply a term that refers to how you prospect your bitcoin.
If you go long, you’re expecting that bitcoin’s price will go up. If you go short, you’re saying that you expect the price to drop.
Set Stops to Manage Risk
To manage risk with your new investment, you need to set limits and stops. You can set several different types of stops:
- Normal stops: close your position at a fixed level
- Trailing stops: monitor positive market movements to maximize ROI
- Guaranteed stops: close your position at a fixed level, despite slippage
Each of these stops has its own benefits and downsides. Make sure to speak with a financial planner to get the best advice on which stops to set.
Open Your Trade and Monitor It
Next, you want to open a trade. You would purchase more bitcoin if you thought the price would go up and you would sell it if you thought the price was going to go down.
Close Your Position
Whenever you feel read, you can close your position on bitcoin. This will provide you with either a profit or loss for your investment. The money will be added to or subtracted from your trading account.
Get Started Trading Bitcoin for Beginners
Now that you know the secrets to trading bitcoin for beginners, it’s time for you to start your investment portfolio. You’re ready to get started trading cryptocurrency like a pro and making a profitable ROI.
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