Recipe of success: What you need to know about bitcoin trading
It does not matter whether you are a professional or a beginner in bitcoin trading – everyone can get a benefit. At the initial stage, no professional knowledge, specialized trainings or a finance diploma will be required. But still how to trade bitcoin?
Bitcoin trading: What is the unique feature?
Before telling you how to trade bitcoin, let’s make it clear why bitcoin trading is profitable and interesting.
First, bitcoin does not depend on any valuable asset, its price is not directly related to the economy of any particular country. If you look at how the bitcoin rate has changed, you will see that the price reacted to many events: starting from controlling the renminbi to Greek economic problems.
Second, unlike stock markets, bitcoin has no official exchangers. However, there are many exchange offices, working 24/7 seven days a week.
Third, since bitcoin's volatility is high enough, traders can successfully conduct profitable transactions any time.
How to trade bitcoin
Now let's answer the main question – how to trade bitcoin? There are several types of bitcoin trading:
- Classic, repeating the strategies of the stock and currency markets;
- Arbitrage between exchanges;
- Investing in bitcoin project or fork;
- Work on PAMM Accounts.
Arbitrage between exchanges is no longer relevant, although there is still a large number of automatic trading systems.
It is not easy to quickly find out how to work with forks for a beginner. There is great income and large losses in this business. You usually need to have your informer with insider information to succeed. However, it is not always accurate and can be illegal.
Stock trading is the easiest way of bitcoin trading. Cryptocurrency exchange is similar to traditional exchanges. To start working with cryptocurrency exchanges, a professional trader will have to explore features of trade in new realities. The newcomer risks the same as in the lottery.
You can apply the classical rules of mathematical analysis for trading bitcoin on exchanges.
The simplest strategy is to use moving averages. You can find out the average cost for the specified time interval this way. The cost will go up if the price on the chart is above the moving average, if lower, it will go down. This strategy is still not the most reliable tool for bitcoin trading.
Today, pullback trading, impulse trading and breakout trading are among the most promising. You can get a guaranteed income using one of these strategies.
- You can not enter the exchange with the last of your cash;
- When the cost of bitcoin goes down, you buy, when it goes up, you sell;
- Do not wait for the highest and lowest financial quotes;
- Do not trust the exchange chat;
- Strategies should be written down.
What else to remember
Bitcoin trading causes an increased interest both among specialists and the general public, because bitcoin rate is not stable, it has a global character and it is possible to trade 24/7. However, it is important to know the risks associated with the cryptocurrency trading.
The collapse of the Mt.Gox exchange is one of the most well-known events in the history of bitcoins. With the invention of bitcoin, Mt.Gox was considered the easiest way to exchange and purchase cryptocurrency. People from all over the world used it, leaving more than 800 thousand BTCs on the exchange accounts.
Mt.Gox first stopped withdrawal in 2014. According to the management, there was a system failure, and it was decided to suspend operations. But two weeks later, the administration said that cybercriminals had stolen over 450 million dollars from the accounts, leaving the exchange bankrupt. So consider all risks, if thinking about stock trading.
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