7 Easy Steps to Trade Bitcoin

Bitcoin trading depends largely on how well you can speculate price movements. Traders have typically bought Bitcoins through cryptocurrency exchanges and hoped that its prices will go up in time. Now, traders are increasingly using derivatives for speculating on prices and to take advantage of the price volatility. These are some of the important steps that you should follow to make successful Bitcoin trades:

  1. Understanding the factors that can directly influence Bitcoin prices is important. Bitcoin has a limited supply of 21 million Bitcoins and this will be over by 2140. So, if the demand increases, prices can escalate. Any breaking news that is related to Bitcoin’s value or security can directly impact its prices. Bitcoin will become more popular when it is integrated into modern payment systems. Once this is done successfully, the demand for Bitcoins will rise further.
  2. You must open an account to trade on any exchange and then link it your bank account or credit cards. You are free to close positions when you want to take your profits or cut losses when they reach a certain level beyond which you may stand to lose a lot of money. The profits are then transferred to your account directly; if there are losses instead, these will be deducted from your balance.
  3. You need a proper Bitcoin trading strategy to trade. You can choose to day trade where you open and close a position within a single trading day. This is for traders who seek short-term profits. Trend trading implies taking positions that resonate with the existing market trend. Hedging is another popular strategy that implies mitigating risks by taking positions opposite to the one that you have opened already. HODLing is for traders who are willing to hold onto their coins for prices to go up. You can also opt for automated trading via trade bots. The trade bot will execute trades on your behalf according to pre-set rules of trade. Check this bitcoin up erfahrung or review for more information.
  4. You need to decide whether to go long or short on trades. When you decide to go long it implies that you want to wait for Bitcoin prices to go up. Alternately, if you wish to go short, it implies that you expect the prices to fall.
  5. To manage your risks, you must know how to implement stop loss orders. There are many such tools for stops and limits. The normal stops ensure that your positions close at a pre-determined level, but this can slip when the market prices rapidly change. Trailing stops will follow positive market movements to make profits and cap your downside risks. But even these can slip. Guaranteed stops, on the other hand, are going to close your trade positions at set levels no matter how much the slippage. You are free to set guaranteed stops, but when they get triggered, you can be charged fees.
  6. For opening Bitcoin trades, you must monitor the crypto trading market to ensure that the prices are moving in the direction as you had anticipated. You can make use of technical indicators to see where prices are headed next.
  7. Finally, you will need a wallet to protect your cryptocurrencies during trades. This wallet will contain the public and private keys granting you access to your funds. The public address is where the money will be sent to you and the private key is the code you use to access your money. The latter must be kept secret at all times and cannot be shared with anyone. You can choose from hot wallets that are slightly vulnerable or cold storage wallets that are safer and similar to your savings account.