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How to Trade Bitcoin (BTC) – Best Bitcoin Trading Strategy for 2018

In our last post, we discussed bitocin price predictions, now let’s talk about “Bitcoin trading strategy”. There has been a lot of awareness created about the bitcoin on the Internet such that people even make profits out of bitcoin trade. If you decide to trade bitcoin the following should be considered:

Steps to Trade Bitcoin

  • Get a bitcoin wallet

If you want to trade bitcoin, you need to have at least one wallet, which like an account where all your bitcoins are securely kept. Related reading, see:( Best Bitcoin Wallet (10 Online, Hardware & Software Wallets))

  • Get an exchange/trading site

After you have gotten a wallet, you should find an exchange and register where you can buy bitcoins from and then fund your wallet. Next, you have to do is look for a trading site (which are usually exchanges) but make sure you find one that is very secure. Some fees are usually charged for trading bitcoins at exchanges. Related reading, see: ( 10 Best Bitcoin Exchanges (Comparison/ Reviews))

  • Things to know to trade Bitcoin

Bitcoin is volatile, and the prices are determined by demand and supply, so, if you want to trade bitcoin, you have to be very careful so that you make minimal or no losses. If you decide to trade on an exchange, it is strongly advised not to leave large amounts of your bitcoin there for long periods because storing bitcoins on exchanges is very risky. For better control, store your bitcoin in your wallet. You should also try to study and understand bitcoin price movements if you intend to trade bitcoin. It is best to sell when prices are high and buy when prices are low. Before you start trading, make sure you study the chosen exchange very well, watch tutorial videos, ask questions, get familiar with the exchanges’ processes so that you don’t just trade blindly or lose your bitcoin. Related reading, see: ( The Dangers of Bitcoin)

You can trade bitcoin without actually using bitcoin, but by using fiat money, this is called Bitcoin CFD’s (Contract for Differences).

Contract For Difference (CFD) and Bitcoin Trading

A contract for difference (CFD) simply means a contract held between an exchange and a trader as if the trader is holding the bitcoin. The contract infers that the difference between a trader’s entry price and exit price will be he/she’s profit or loss. So what traders do is a bet that price will rise (also known as going long) or bet that bitcoin prices will fall (going short). Fees are charged for this method, but there are also disadvantages. It may not be the best option for long-term holders because of the maintenance cost involved since CFD is actually like a loan to the trader as a form of leverage on the contract for difference. Also, due to the financial arrangement and as a form of protection as well, the exchange can exercise a margin call which means that they can automatically close out users before their balances become negative (that is, before they run out of money to cover; losses). So make sure you get acquainted with how trading with CFD’S work before you venture into it.

Another option you can use if you want to trade bitcoin is to use bitcoin-trading software, which monitors bitcoin prices and then advice when you should sell bitcoin. This makes trading very easy but beware that it is just software and mistakes can be made anytime.

In conclusion, it is almost impossible for you to know exactly how or when bitcoin prices will rise or fall so, bitcoin trading just like any other business has its risks.

Prooworld’s Other Cryptocurrency Trading Guides

About Tayyab M

I love to talk about global tech-happenings, startups, industry, education and economy.

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