Are you looking to get involved in the cryptocurrency sphere? If your answer is yes, one of the first things you need to consider is discovering almost everything about trading cryptocurrency. However, you also have to determine whether you’ll buy the digital assets and why it has become a popular alternative to buying coins.
If you want to trade profitably in Bitcoin, you need to stay up to date with its latest trends. Trading in Bitcoin means how you speculate in the cryptocurrency price’s movements. It involves buying bitcoins through an exchange.
To make the most of Bitcoin’s volatility, the traders are increasingly using derivatives to speculate on rising and falling bitcoin prices. Here, we’ll show you some easy steps to start trading in bitcoin.
1. What moves Bitcoin’s price
Firstly, you must understand some factors that impact bitcoin’s price to get into a surging opportunity.
Below, we’ll show you these factors affecting bitcoin’s price.
- Bitcoin supply:- Currently, the bitcoin supply is capped at 21 million. And it is expected to exhaust by 2140. That means if demand rises in the upcoming years, the price of bitcoin will also increase.
- Bad press: Any news that concerns bitcoin’s security and value will negatively impact the overall market price.
- Integration:- Your bitcoin’s portfolio will depend on its integration into new payment systems and banking frameworks.
- Key events:- Key events like regulation changes, security breaches, and macroeconomics will also affect bitcoin’s prices.
2. Pick a trading style and strategy
Now, you have to pick a trading style and strategy shown below in this article.
1. Day trading:-
In this trading style, you’ll open and close a position within one single trading day.
In this case, you won’t have any bitcoin market exposure overnight. That means you have to avoid overnight funding charges.
If you’re looking to profit from bitcoin’s short-term price movements, you must try this strategy.
It will allow you to make the most of the daily volatility in bitcoin’s prices.
2. Trend trading
In a trend trading strategy, you’ll take positions that match the current trends.
If the market is in a bearish trend, you’ve to go short, and if the market is in a bullish trend, you’ve to go long.
On the other hand, you’ve to close your position and open a new one if this trend starts to slow.
3. Bitcoin hedging strategy
In this strategy, you’ll take an opposing position to mitigate your risk exposure.
Suppose you buy some bitcoins concerning a short-term drop in their value.
You have to open a short position on bitcoin with CFDs. If there seems to be a fall in the bitcoin’s prices, the gains on your temporary position will be offset.
4. HODL bitcoin strategy
This strategy involves buying and holding bitcoins. If you got a positive outlook on bitcoin’s long-term price, you only have to buy and hold the bitcoin.
3. Choose how to get exposure to bitcoin
Below are a few different ways that you can get exposure to bitcoin.
Trading bitcoin derivatives
It means you’ll be speculating on bitcoin’s price with CFDs instead of owning it outright.
As a result, it will allow you to take a position on bitcoin’s price rising by going long or falling by going short.
Buying bitcoin through an exchange
People who use the buy and hold bitcoin strategy can buy bitcoin through an exchange.
Buying through exchange means you’re taking direct ownership of bitcoin with the expectation that its price will increase.
4. Decide whether to go long or short
Depending on the current market sentiment, trading derivatives will make it possible to go both long and short.
However, going short means that you’re expecting the bitcoin’s price to fall.
On the other hand, going long means that you’re expecting its price to rise.
5. Open and monitor your trade
You’ve to buy bitcoin to open a bitcoin trade if you think that the prices will rise in future.
Similarly, you have to sell bitcoin if you think that its prices will fall. After opening your bitcoin trade, you have to keep monitoring the market to ensure that it’s moving in the way you anticipated.
With many trading sites, you can determine what bitcoin’s price might be next.
The official site will let you monitor current market conditions like volatility levels or market sentiments.
6. Close your position to take a profit or cut a loss
Finally, you can close your position whenever it reaches a level that makes you comfortable.
However, you can close your position when you want to make a profit or cut a loss.
Your losses will be deducted from your trading account, and your profits will be added to your account.
Wrapping up
We hope the steps shown in this article will help you make a profitable start in bitcoin trading. However, with BITIQ, you can take a position on the price of bitcoin with financial derivatives. The official site will help you take full advantage of price movements in either direction. So, now create a trading account and use these steps to start trading in bitcoin profitably.
