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The Ultimate Beginner's Guide to Bitcoin Trading

For the beginner traders out there, Bitcoin (BTC) trading can seem very challenging and stressful to figure out. Check out this BTC step by step guide.

SageFX - Jan, 28, 21

*Sage FX would like to state that traders should research extensively before following any information given hereby. Any assumptions made in this article are provided solely for entertainment purposes and not for traders to guide or alter their positions. Please read our Terms & Conditions and Risk Disclosure for more information.

 

Beginner’s Guide to Bitcoin Trading

For the beginner traders out there, Bitcoin (BTC) trading can seem very challenging and stressful to figure out. Check out this BTC step by step guide.

Continuously increasing in popularity, digital currency is attracting a lot of newcomers to trading. When Bitcoin was created by Satoshi Nakamoto in 2009, it was capped at 21 million BTC. Currently, almost 90% of that amount has been mined. And the value of the cryptocurrency has taken gigantic leaps since its inception. And in a little over a decade, it has gained a lot of trust from reputable communities.  If we follow the rule of supply and demand, the BTC price is bound to increase. So, how to buy and trade the much sought-after Bitcoin?

Here’s an efficient guide to overcome initial challenges and get your Bitcoin trading journey started with as little stress as possible.

Factors that affect BTC price

As you learn to navigate your way around Bitcoin volatility, there are key things to notice if you want to get in on an opportunity. Here are some of the factors that affect BTC prices:

  • Supply

The Bitcoin supply is capped at 21 million. Which means it has a clear finite supply that will keep leading to price jumps.

  • Events

Market events including macroeconomic ones or regulation related announcements can impact the price of Bitcoin.

  • Reputation

Since day one, Bitcoin has gotten bad press. Most of which are related to security concerns and value.

  • Integration

A solid integration of Bitcoin depends on regulatory bodies including it in new payment systems. If further regulations and acceptance occurs, with daily life uses of BTC, the demand may rise and impact its price upwards.

Key points to consider

24/7 Trading

The market where Bitcoin trading happens remains open all day and night. In fact, BTC exchanges are web-based. So wherever you are in the world, you can trade BTC.

Volatility

The value and price of Bitcoin have always been prey to volatility. Upwards and downwards shifts of the currency make it a great investment full of opportunities to grab.

How to select a BTC exchange

In order to buy or sell Bitcoin, you need to go through an exchange. While there is no official trading platform for the cryptocurrency, you can find it on most exchanges. However, some are better than others. And it is very important to carefully select the trading platform in order to help you apply your strategies. So here is what to look out for:

  • Safety

A primary element in the cryptocurrency’s ability to drive trust and success. Therefore, a particular emphasis should be placed when choosing your exchange platform. Make sure they offer multiple safety checks such as: two-factor authentication, data encryption, SSL certificate, and other measures.

  • Reputation

Run due diligence on the exchange platforms you are considering. Check out the reviews, have a look at their customer support efficiency.

  • User interface

Have a look at how user-friendly their interface is. It will be very difficult for you to trade if the platform is not easy to use. Choose wisely. And try demo accounts to get the full platform experience before making your choice.

  • Payment methods

Clearly, you want a platform that offers payment methods that are available to you. Don’t commit to an exchange until you are certain your preferred method of payment is supported.

  • Fees

Last, but probably not least: transaction fees. While some exchanges offer free deposits and withdrawals, others charge for some transactions. Do your research, and don’t hesitate to contact the customer service team to clear out any doubt.

Bitcoin trading strategies

So now that you have a rough idea on what to look out for when trading Bitcoin, it is time to consider the different strategies you can implement.

HODLing – a beginner-friendly strategy for BTC trading. The modus operandi here is to buy at a low price and hold on to BTC coins until you can sell at a high price. Therefore, it is a straightforward way to make a profit.

Day trading – this strategy consists of using several quick and short-term trades that generate small profits. The added value comes with the accumulation of gains. At the end of the trading day, all positions should be closed.

Scalping – this can be defined as day trading on a roll. As a scalper, you can set over a hundred trades every day. The profit is made penny by penny to reach a substantial cumulative effect.

Swing trading – swingers analyze market trends before making a move. This strategy is all about buying low and selling high. However, the hold time is usually shorter than that in a HODLing strategy.

Peer-to-peer (P2P) trading – a way to balance out BTC’s extreme price jumps and a way around its volatility. P2P traders earn on profit percentages. Larger margins are obtained when using less common payment methods.

In conclusion

To wrap it up, beginner BTC traders need to be well informed on cryptocurrency trading processes and strategies. This is the best way to reduce trading anxiety and potential pitfalls. And trading Bitcoin profitably may be difficult to achieve at first. But once you familiarize yourself with its typical volatility and various tactics at your disposal, your experience will get considerably more rewarding.

We leave you with this piece of wisdom:

  • Research, practice and keep learning
  • Control your emotions and stress to avoid rushed moves
  • Prepare a trading plan and choose your strategy
  • Don’t invest more than the amount you can accept as a loss
  • Always store your Bitcoins in an offline wallet

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