As we know, the Bitcoin is the main cryptocurrency available right now. There are thousands of users who, on a daily basis, buy or sell their assets at this value. And many of them do not do it for the purpose of protecting their money against possible devaluations, but to obtain profits in the short or medium term from speculation. This is what is called trading of Bitcoin and, in the following lines, we are going to show you some of the first steps and recommendations that you should take into account in these cases.
The first thing you have to keep in mind, faced with these circumstances, is that some training is required for Bitcoin trading to be successful. You can check it here if you want to know more, but we will take care of teaching you a small guide to avoid entering this world as a novice.
First steps for trading Bitcoin
Table of Contents
Why is it such a popular method?
As we said before, every time the price of Bitcoin moves, both investors and speculators rush to seek their profits. And there are several explanations about why more and more people decide to invest their money in this currency. The fact that it is a security that is not subject to any particular Government, for example, means that any event can affect its price, giving rise to unexpected and resounding movements. And with them, at great profits.
Without going any further, some of the events that have had a direct impact on Bitcoin in recent times have been Brexit, the demonetization of India or the election of Donald Trump as president of the United States. Sure, as this coin accepts trades 24/7, its price is extremely volatile. That attracts traders above any other market, since, as we said, they can get incredible dividends if they move their pieces in the right direction.
On the other hand, and something that brings some reassurance to traders, is that Bitcoin is not deflationary. Unlike other assets, which can lose their value over time, as the coronavirus pandemic made clear, Bitcoin has shown itself to do well over the years.
No banks, and absolutely safe
If you’ve never tried your luck with them, let us tell you that Bitcoin transactions are completely reliable. The best thing is that you don’t even have to go through a bank, as complicated as that can be. And let’s not talk about the commissions they usually charge us.
And how do the exchanges work then? They do it through a public key cryptography system. Specifically, each Bitcoin user has a private key and a public address. In this way, you receive the funds at your public address, and send them by entering your private key. That easy.
Of course, there are platforms that have been specially developed to help us in our initial experiences. Some of them not only facilitate transactions, but are also in charge of providing us with key information so that Bitcoin trading is successful.
Main ways of trading Bitcoin …
Having made the relevant clarifications, we are going to stop now at the main types of trade around Bitcoin. There are four in total: Day trading, Swing trading, Scalping and Passive trading:
Day trading: trades are opened and closed on the same day Swing trading: trades are opened at the beginning of a trend, and closed with its end Scalping: several small gains are sought instead of one big hit Passive trading: more dividends are sought long-term, so as not to risk too much
… And common mistakes to avoid
Before we finish, we believe that there are some very common beginner mistakes in Bitcoin trading that you should try to avoid. We are going to review several of them:
Too many transactions – Until you have taken this business by the hand, don’t make too many transactions. You can win a lot … but you can also lose everything. Always follow a strategy: trading without strategies is literally suicidal. As we mentioned, there are sites that can teach you their own strategies that work. Beware of emotions: the more money you are making, the more careful you should be. It is just at that moment when we are most vulnerable Learn from mistakes: in your beginnings as a Bitcoin trader you will make mistakes. The real problem would be not learning from them, so try to take advantage of them
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