Bitcoin trading is hugely attractive for traders who can use cryptocurrency to make money. You may use platforms like Bitcoin Circuit to utilize the best strategies to make your bitcoin trades profitable. Trading in bitcoin means trading with the price volatility of this currency, but typically these trades are performed on margin. Therefore, it can act as leverage and provide sizeable profits to any trader with excellent timing and capital.
Though trading Bitcoin requires some investment, most beginners invest around $100-USD 200 in a cryptocurrency wallet, which they then use to buy bitcoin either via an online exchange or by trading from their account directly on the now-famous BTC-e exchange. Others make their initial purchase with cash, earning a higher return on investment.
Although the concept of trading Bitcoin is not new – the first incarnation known as Bitcoin Investing was launched in December 2009 – it didn’t take off immediately. Many exchanges were unstable and prone to security breaches in 2013 and 2014, although authorities mostly resolved them by 2015.
It has seen the launch of many new exchanges – including Coinbase and Kraken- and more reputable exchanges like Bitfinex, Poloniex, etc. These new arrivals have helped push bitcoin’s price higher due to increased trust and liquidity compared to other exchanges. So let’s discuss how to make profits from bitcoin trading.
Basics of bitcoin trading:
The common misnomer about bitcoin and other altcoins is that you can only profit if the price goes up. However, it is possible to profit in both rising and falling markets. Bitcoin prices have been known to stay relatively stable for weeks on end. However, if you are an aggressive trader, you can still profit from the upside using leverage and CFDs. There are many ways to earn bitcoins and other cryptocurrencies. Profiting from Bitcoin is like making money from any other type of investment; it requires knowledge of the market and a good trading strategy. Let’s discuss some essential tips to gain profit from bitcoin trading.
1. Develop your knowledge of Cryptocurrency financial markets:
To profit from cryptocurrency trading, you first need to develop market knowledge. It involves learning how to get bitcoins or other currencies, which exchanges trade them, and the difference between various markets. You can learn a lot by simply reading online articles and posts by experts on cryptocurrency forums and bitcoin talk forums.
Talking with other investors online is also very helpful as they are more likely to share their experiences in making profits. However, remember that everyone has different opinions regarding what it takes to be successful, so it’s important not to listen too closely to others in the field.
2. Plump for the best bitcoin trading strategy:
No matter how much you know about the cryptocurrency market, developing a successful trading strategy is essential. There are many different strategies, from more straightforward strategies based on speculation to more complex ones that involve hedging your investments.
-Learn To read candlesticks and Technical Indicators:
To have an edge against other traders in the bitcoin market, you need to have a better knowledge of technical indicators and candlesticks than they do. To make decent profits with these currencies, you need a solid understanding of candlesticks and technical indicators like MACD, RSI, and Fibonacci lines. In addition, learn about Support and Resistance levels and trendlines. Trading signals help you to make informed decisions quickly.
3. Use leverage with caution
How a trader uses leverage can affect the profitability of their trades. Leverage is essentially borrowing money that you don’t need to pay back. Therefore, the higher your leverage, the more profitable your trade becomes because you use more of someone else’s money. However, this tactic is only advisable if you don’t intend to hold your position for an extended period.
4. Do your homework:
It would help if you did diligent research before you trade in any cryptocurrency. Many blogs and websites will give you advice on trading certain coins, tokens, or other types of cryptocurrencies. You must select the best tips and advice from these sources. Stay away from those who offer investment services that promise incredible returns, especially if they seem dubious, as they could be scams trying to steal your money.
5. Keep a logbook:
The most critical aspect of successful Bitcoin trading is the ability to manage your emotions when the market gets volatile. For a trader, nothing is more unbearable than the feeling of watching your account drop $1000s in value over a short period. This feeling can be your worst enemy in the trading game and is one reason many traders fail in the long run.
6. Keep track of your wins and losses:
It is another top tip for successful Bitcoin trading. You must keep a record of successes and failures; this will help you develop a trading strategy that works better for you. Every good trader has their own unique strategy, which they developed based on their past experiences; by keeping track of your successes, you’ll also have more success in the future.
