Bitcoin Trading - Advice From The Professional Trader

07.10.2019
Bitcoin trading is a very popular process of buying or selling Bitcoin (so as other cryptocurrencies) on cryptocurrency exchanges like Binance, Kraken, BitMEX, etc.
 
Cryptocurrency remains a hot topic for quite a while. This market is relatively new and is extremely fragmented. 
 
That is why both experts and beginners can gain legal profits from trading bitcoin or other currencies.
 
The only thing you need to do to succeed is to know how the Bitcoin trading app works and which methods are the most efficient ones.
 
One of these methods will be discussed in the article below.
 
But if you want to learn more and to dive into the universe of crypto trading, we recommend paying attention to the following article.
 
There you can learn everything about crypto signals and calls, bitcoin futures trading, and much more!
 
With that being said, we invite you to an exciting journey to the world of bitcoin trading and guarantee that your life will never be the same again!
 
 

What Is Bitcoin Trading?

 
what is bitcoin trading safetrading
 
 
You probably know that Bitcoin is the first blockchain technology, which stood at the source of cryptocurrency markets. 
 
The Bitcoin trading market emerged more than ten years ago, introducing thousands of sellers and buyers to the world. 
 
That is when the first exchanges appeared, many of which no longer exist.
 
Considering that Bitcoin is a premier currency, it becomes rather easy to buy and sell it any time and any place you want. It seems that the more volatile trading bitcoin is, the more traders enter the market. Every time its price changes, Bitcoin becomes the leading topic all over the news.
 
Such attention causes new interest and attracts more and more traders and investors until the hype falls.
 
If you approach Bitcoin as an asset, you will see that it almost doesn’t have differences with traditional financial assets, which are traded on markets. However, bitcoin trading is still unique, and here is why.
 
First of all, Bitcoin is not related to any laws or policies. 
 
It is a global currency, although it still reacts to such global events as Brexit, US elections, devaluation in China, and so on. 
 
Moreover, some crises or insecurities can lead to a significant increase in Bitcoin value.
 
Secondly, bitcoin futures trading (as well as other bitcoin operations) are accessible 24/7. 
 
There are hundreds of different Bitcoin exchanges in the world like Binance or Kraken, and unlike stock markets, they don’t have opening and closing time.
 
You can buy and trade Bitcoin any time you want: when having insomnia or dining on a Balinese beach.
 
Finally, Bitcoin allows traders to register and operate without long and complicated registration processes. In most cases, you will only need to verify your email.
 
Bitcoin had its ups and downs with dramatic changes in price, but it never equaled zero. This proves that Bitcoin has shown its value, and traders need to reckon with it!
 
Let’s discuss Bitcoin trading app peculiarities and the best ways of becoming a bitcoin investor.
 
 

Importance and Stability of Bitcoin

 
importance and stability of bitcoin
 
Let us remind you of the significance and stability of bitcoin before we move to the bitcoin trading platform. 
 
During the existence of blockchain technology, a considerable variety of forks, i.e., technological branches of bitcoin, was created.
 
99% of them proved their insolvency, and only trading bitcoin continues!
 
This is probably the most crucial aspect because when you need to make an investment decision, the main risk lies in the fact that the price will fall to zero. This will lead to the complete disappearance of the currency from the market.
 
At the moment, there are various promising crypto technologies, which have proved their efficiency and will continue to evolve. Bitcoin is based on a relatively old blockchain technology, which has nothing but a financial value.
 
Still, it is an alternative way of keeping the value of the asset compared to traditional finances. That is why devaluation probability is extremely low, and bitcoin futures trading remains a safe and secure tool of crypto trading.
 
Any time you want to make a trading decision, keep the above fact in mind, and it will certainly make a choice easier!
 
Trading Bitcoins for beginners is rather simple if you follow these steps:
  1. Decide how you want to trade bitcoin;
  2. Learn factors that influence bitcoin’s price;
  3. Choose a suitable trading strategy;
  4. Start trading bitcoin!
 
Now, when you know more about the Bitcoin futures platform and the cryptocurrency itself, let’s move to more specific details.
 
 

Price Fluctuations

 
bitcoin price fluctuations
 
 
If you were reading this article attentively (and we are sure you were), then you know that bitcoin trading is somewhat volatile. 
 
This asset got used to extreme fluctuations, and Bitcoin price often rises and falls by tens of percent in a blink of an eye.
 
When the market of cryptocurrency was still shaping, the Bitcoin value could increase by 100% or even more!
 
The main reason for such bitcoin trading fluctuations was that the market lacked liquidity due to a low number of buyers and sellers.
 
Every year the cryptocurrency market continued to grow, introducing more and more traders and investors. The more interested market players there are, the harder it is for Bitcoin to grow and fall at high speed.
 
So now you will hardly witness Bitcoin’s fluctuation by 100% a day. High volatility in Bitcoin trading app allows traders to make profits, while high growth potential of trading bitcoin helps investors to become more prosperous.

 

Trading Strategy

 
bitcoin trading strategy
 
We bet you were waiting impatiently for this section! 
 
Who needs boring theory, when there are so many Bitcoin trading tips waiting for you?
 
Unfortunately, you should always start with fundamental knowledge if you want to leave a trace on the market and not just to go broke over the night.
 
First of all, all the strategies for Bitcoin trading can be split into two directions: speculative and investment ones.
 
Usually, professional market players divide their deposit into two parts: one is invested in the long run, while the second is used for speculations.
 
We have already determined that it is almost impossible to imagine a situation when Bitcoin price will reach zero. That’s why the most profitable strategy would be buying bitcoin on a bear market.
 
Distinguishing features of this strategy are time and a net capital without leverage. This means that for successful trading Bitcoin, you just need to buy it when the price falls down and not to use borrowed money.
 
If you are an investor, time plays in your favor. 
 
Be patient and wait till the price goes up, and you can sell bitcoin, making profits.
 
Here are a few tips.
 
It is rather simple to detect the best purchase price: take the peak price of bitcoin and divide it into two. 
 
For example, the maximum Bitcoin price on the Binance exchange was $19,800, so after splitting, you will get $9,900. 
 
Considering that Bitcoin is an extremely volatile asset, it is very likely to rise and fall, and to beat the historical maximum. 
 
Waiting for this to happen, we can easily purchase Bitcoin if its price falls lower than $9,900. This is a Bitcoin trading approach when your risks will be minimal.
 
Moreover, you can make purchases not on all of your funds but in parts: to break the entrance into three or five parts with a max gap of $1000.
 
For example:
 
Let’s assume that the price dropped to $9,000, and you have bought the first part. The price continued to fall and reached $8,000. You purchased it using the second part. The third part you used to buy the asset for $5,000.
 
If the investments were divided equally, your average position would be $7,500. Once the price exceeds $9,900, you can start selling. But also in parts.
 
There is another advanced Bitcoin trading approach: when you buy Bitcoin on a fall. 
 
To use this strategy, you’ll need to purchase assets using capital that would grow exponentially.
 
Thus you will significantly improve the average price of opening an investment position. 
 
However, you must always calculate the lowest and the highest price of entrance.
 
Then you only need to detect the entrance price exponentially. This calculation form can be found on the Internet (Go on, Google it).
 
Let us remind you: these trading bitcoin strategies should be performed without any borrowed capital and leverages. 
 
Remember that you fixate losses only when you sell assets. If you have bought Bitcoin, all you need is some time to wait while the price will grow and the absence of need in the capital that you have prior invested into Bitcoin.
 
Sounds simple, isn’t it? 
 
In reality, everything is even more straightforward!
 
Now it is the right time to introduce you to Bitcoin futures platform. 
 
Are you ready?
 

Trading on Spot or Futures Market

 
bitcoin trading on spot and futures market
 
 
At the moment, Bitcoin trading can be performed both on futures and spot markets. 
 
The last one allows you to buy Bitcoin and withdraw it on a cold or hot Bitcoin wallet for storage. By the way, if you need some info about wallets, welcome.
 
Keep in mind that exchanges don’t guarantee the safety of asset storage, and any time you risk losing your investment capital or Bitcoin itself because the exchange can be hacked in a blink of an eye.
 
But after the Bitcoin trading deal is closed, you can withdraw assets to a cold Bitcoin wallet, and you will be the only person to have physical access to it, which gives almost a 100% security guarantee apart from unpredictable situations, like losing a key or a cold wallet carrier.
 
If your strategy is to make profits on speculative operations, then Bitcoin futures platform is for you. 
 
This is especially true for those countries where trading bitcoin and other cryptocurrencies are forbidden, but it is allowed to trade derivatives on official exchanges. 
 
CME, the leading marketplace for trading derivatives, allows bitcoin futures trading without fear of being caught. But it has its peculiarities concerning capital.
 
On a Bitcoin futures platform, you need to have funds for the trade, because you buy not the asset but a contract for purchasing this asset in the future. Some Bitcoin exchanges have a minimal quantity of Bitcoin in a single contract. 
 
As for cryptocurrency exchanges, at the moment, Bitmex OKCoin also offers futures trading.
 
But before you start trading futures, we recommend getting familiar with how exchanges operate. 
 
For example, Bitmex exchange allows borrowed capital and trading with a margin. Leverage reaches x100, which is somewhat risky, and the inexperienced Bitcoin trader will most likely lose money in a single deal.
 
 

Final Words

 
Today we have discussed the Bitcoin trading app and how Bitcoin emerged, why it is so popular, and how anyone can benefit from it.
 
We have also introduced you to Bitcoin futures platform and the most viable strategies, which any trader can use.
 
As you see, trading bitcoin is rather straightforward and has a variety of benefits over trading other cryptocurrencies: it is unlikely to drop to zero, you can trade Bitcoin 24/7, and the registration process is quite simple.
 
Also, you have access to a variety of exchanges, strategies, and instruments that will make trading even more fun and simple.
 
And if you find some terms unfamiliar or want to take your skills to the next level, you can always read our guidelines and become an advanced Bitcoin trader with minimum efforts!

 

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