When you make up your mind to get involved into the crypto world, you have to learn a lot about the specifics of digital technologies. You can either invest in cryptocurrencies or trade them. People invest in Bitcoin because they believe in the technology and ideology as a whole. Bitcoin investors buy and hold Bitcoins for a long term. If you are interested in Bitcoin trading, you will buy and sell Bitcoin in a short form whenever you think a profit can be made.
Bitcoin is an instrument for making profits
Another difference between Bitcoin investing and trading is that Bitcoin traders may not even believe into the concept of Bitcoin. Traders mostly use the cryptocurrency as a tool for making profits. However, they may be investors and traders at the same time as well. Volatility of Bitcoin allows traders to make a great amount of profit. The main thing is to manage to anticipate the crypto market properly. Traditional markets have limited working hours, but you can participate in Bitcoin trading all day long. You can trade whenever you want. What’s more, Bitcoin is not regulated by any serious institutions that makes it relatively easy to start Bitcoin trading. No need to pass long verification or identification purposes.
The main types of Bitcoin traders
One of the groups for Bitcoin trading is day traders. They have a task to make profit from short-term price movements. They monitor the screens all day long and usually close all of their trades at the end of the day. Another group is swing traders. This group of traders try to benefit from the natural ‘swing’ of the price changes. They enter the trade at the specific time movement. Swing traders hold on until the movement ends up. And then they take their profit. They don’t monitor screens all day long, but use a specific chance. They can open a trading position and hold it for months.
Fundamental and technical analysis for Bitcoin trading
No one can certainly say what is going to happen with the greatest cryptocurrency. However, the predictions can be to some extend evaluated by fundamental and technical analysis. Fundament analysis includes processing information about technical developments of the currency, regulations about it and news that can affect the success of the coin. Technical analysis is a completely different approach. Here Bitcoin traders have to be aware of crypto market statistics. Past price movements and trading volumes are of great importance. Previous experience of patterns and trends in price may make a relative picture for the future.
Exchanges for Bitcoin traders
Crypto exchange are different from companies that sell Bitcoins. Exchanges usually have lower fees. When you choose an exchange you will see an order book. There you can see the buy orders that are called bids and the sell orders are called asks. There is no single price for Bitcoin, but you can see the price of the last trade conducted on the exchange. Moreover, prices can be different even regarding the country. You can also observe the highest and lowest prices for the last 24 hours. Another important indicator to mention is volume. Large trading volumes usually accompany significant trends and the low volumes – weak trends. When the price rises, you will note upward trend.
Before you start Bitcoin trading
There are some tips to follow before you start Bitcoin trading. Choose the amount you feel comfortable with. If you lose them, you shouldn’t have regrets. Trading is very risky. Have an accurate action plan. You should know exactly when you are going to stop or what is your next step. At last, two basic emotions control your decision in Bitcoin trading. These are fear and greed. Don’t let them rule your decisions!