Are you a beginner Bitcoin trader that wants to prosper? If so, here’s a guide to help you start trading this digital asset.
Many people want to start trading Bitcoin but don’t know where to start. If you’re such a person, this guide is for you. Bitcoin trading involves buying this virtual currency at a low price and selling it when its value increases. Some people confuse Bitcoin trading and investing. Trading is a short-term activity, while Bitcoin investing entails holding this cryptocurrency for the long term. Crypto trading is mainly about predicting price movements to determine when to sell or buy Bitcoin to maximize profits.
Bitcoin traders can analyze the cryptocurrency’s price by performing technical and fundamental analyses. Nevertheless, trading this digital asset requires time, effort, and money. But you can eventually become good at Bitcoin trading if you take the time to learn the basics.
Getting Started with Bitcoin Trading
Trading Bitcoin is more straightforward than most people think. All you require is a Bitcoin wallet and the willingness to learn. Here’s what you need to start trading Bitcoin.
- Crypto exchange account: Crypto exchanges are digital platforms where people purchase and sell Bitcoins. For instance, you can buy Bitcoins on bitcoinsystem.app using fiat money. You can also sell your tokens on this platform. Trading Bitcoin on such a platform requires you to create an account first. Nevertheless, pick a crypto trading platform that suits your style and needs. In some cases, a crypto exchange might provide a free Bitcoin wallet once you’ve completed the registration process.
- Confirm your identity: Most crypto exchanges require users to verify their identity for sellers’ and buyers’ safety purposes. While this could be against the basic anonymity premises of Bitcoin, it’s mainly about protocols.
- Get a digital wallet: Install a crypto wallet on your device if the crypto exchange doesn’t provide a free wallet. When picking a crypto wallet, you have many options, including mobile and android wallets. Pick a hot wallet to ease your trading process.
- Link and fund your account: Link your crypto exchange account to an acceptable payment method and fund it. Ideally, you require fiat money to buy Bitcoin.
- Start trading: After setting up your crypto account and digital wallet, you can purchase and sell Bitcoin. Analyze the available offers carefully to pick one that suits you.
Predicting Price Movements
Most people want to predict price movements to maximize returns from their Bitcoin trading activities. Some Bitcoin traders have already identified methods, rules, and patterns that enable them to profit from Bitcoin trading. While nobody exclusively makes profitable trades, the idea is to notice a positive balance even after suffering losses at some points.
Here are the primary methodologies for analyzing Bitcoin when trading this cryptocurrency:
- Fundamental analysis: This method predicts Bitcoin price by focusing on the larger picture. For instance, you can evaluate Bitcoin’s industry, technical developments, global regulations, cryptocurrency news, and other issues that may affect its price. Fundamental analysis looks at this cryptocurrency’s value as technology and forces that may impact its price. For instance, this analysis can predict price movement if a country bans Bitcoin.
- Technical analysis: This analysis predicts Bitcoin price by investigating market statistics like trading volumes and past price movements. It also identifies trends and patterns in the cryptocurrency’s price. Based on such factors, this methodology can deduce the future price of this cryptocurrency. Technical analysis assumes that price movements speak volumes regardless of what happens globally.
Both fundamental and technical analysis will enable you to predict future price movements when trading Bitcoin. Nevertheless, you also require an effective Bitcoin trading strategy. Crypto traders implement day trading, HODLing, scalping, peer-to-peer trading, and swing trading strategies. Therefore, research different crypto trading strategies to determine the most effective for you. Also, start trading Bitcoin with a small amount and increase as you master the trade.