If you want to learn how to trade bitcoin, then you have to learn something about the currency first. Bitcoin (BTC) is a cryptocurrency that has gained the most attention in the last several years. It uses cryptography to keep the transfer and creation of funds under control, which is why it has the prefix crypto. If you are a total newbie, just think of BTC as a purely electric pose that does not have a physical form. To be eligible to buy or sell BTC, you need internet access and space to store bitcoins. The latter requires a bitcoin address by registering for an online wallet or downloading a BTC client. Since bitcoin is a so-called P2P currency, no third party will participate in the trade. This means that you will not need banks or payment services to send or receive BTC from anyone in the world. However, you can use a digital exchange that serves as a marketplace for traders. As soon as the transaction is complete, you will notice the bitcoins stored in your wallet.
Learn how to properly store your Bitcoin first
It is important to learn to walk before walking. Start learning the basics about the mechanics of buying and selling bitcoins. To discover the easiest and safest platform to start buying bitcoins, you must first read our reviews of all the major bitcoin exchanges. Coinbase is a good starting point for any beginner investor, due to its intuitive interface and ability to purchase other major cryptocurrencies such as Ethereum, Bitcoin Cash and Litecoin. As with all financial investments, it is important that you learn to protect your assets. In this case, you will need to ensure that your digital assets are widely protected against the threat of cyber-attacks and scammers. Purpose-built bitcoin wallets are designed with security at the forefront. The Laser Nano S is the safest bitcoin wallet in the world, while Trezor is also popular because it generates private keys from your bitcoin wallet, which are far away from sight.
Decide what you’re willing to lose
As most trades inevitably place bets on either the up or down going price, it is expected to be wrong about half the time. In such an unpredictable environment one of the keys to profitability is to let your winning trades run, but shorten all losing trades. Before trading, determine the point at which you accept that your market outlook was wrong. If you buy bitcoin you will think that it will go up, and then the price drops below the point you set, it is time to sell. Make your plan and more importantly, stick to your beliefs.
Set A Limit for Losses and Profit
As mentioned, when trading bitcoins, prices can quickly become very high or very low. To prevent yourself from making impulsive decisions when there is high volatility, it is very important for you to set your own limits. One tip is that you have to set and set a price that you are ready to cut losses or take profit before trading. Having a cut loss and a profit target price will help you maintain a level of pressure during a trade. For example, there will come a time when prices will start falling. Then, you start thinking that it will still go up and not sell. If prices are still going down, you will feel that you should sell your bitcoin. Having a cut loss target will prevent your emotions from getting in the way. On the other hand, if you do not have a target price to take your profit, then as prices are rising, you will start to be greedy. However, there will be a time that prices will suddenly go down. By this time, it will be too late to sell. Therefore, it is also important to set goals to take advantage of yourself. Setting a goal, both buying and selling, will help you avoid the temptation of acting on the business.
Analyzing the market
Business buffs only consider market sentiment and speculation at the time of trading. If you want to become a successful trader, you must learn to look at charts and use technical analysis to strategize your trades. Technical analysis is the skill of studying patterns and volume charts to make calculated decisions about your business. At first, technical analysis can seem very intimidating for a newbie. But, if you have patience and you hang on to it, you will find that it will be very useful.
Technical analysts view the market with the idea that history repeats itself. To get a forecast of where the market will go, they look at historical data such as trading volume, past price trends and other relevant data from the past. They seek behaviour again and again. Once they find a pattern, they can make a calculation based on the market’s uptrend or bearish trend.
Fundamental analysts have more of a “big picture” approach when it comes to looking at the market. Instead of looking at the figures, they will look at the intrinsic value of the asset. If there is a coin that they feel is not being evaluated on the market, they will put their money in it and hope that their investment grows from there.