What is Bitcoin Trading?
Investing and trading in bitcoin is different.
Investing - when people invest on bitcoin, it is for a long term. They believe that the price will ultimately rise regardless of the ups and downs of bitcoin price. They invest because they believe in the technology, ideology and the group behind the currency. Bitcoin investors tend to hodl the currency in the long term.
Trading - people trades buy and sell bitcoins in a short term, whenever they think a profit can be made. They see as bitcoin as an intrument of profit.
Subscribe @Serg0213 What is the advantage of bitcoin trading?
Bitcoin is higly volatile - you can make a big profit if you correctly anticipate the market
Bitcoin market is 24/7 - you can buy and sell whenever you want
Bitcoin is decentaralize - it is unregulated making trading simple. It don't need long identiy verification process.
Subscribe @Serg0213 Different types of traders
All traders are not the same and there are differents types of trading method.
Day traders - conducts multiple trades throughout the day and trying to profit in short term price movement
Scalpers - attempts to attain profit in small price changes. Its like picking a penny in front of a steamroller
Swing traders - takes advantage of the natural swing of the price cycles. They are waiting for a certain amount and enters trading and hold it for a week or months until the target profit is met.
Subscribe @Serg0213 Bitcoin price prediction
There are numerous financial advisers, well known people in the bitcoin community that predicts the bitcoin price. But no one can actually predict what will bitcoin do.
Traders identify some methods, patterns and rules that allow them to make profit in a long run.
Two methodology used in trading
Fundamental analysis - it evaluates the bitcoin industry, news in currency and technical development of bitcoin. This method looks bitcoin as a technology regardless of its price
Technical analysis - it tries to predict the price based on market statistic. It analyze pattern of the price cycle of bitcoin and predicts what will happen next.
Which methodology is better? As said before, no one can predict the bitcoin price.
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Bitcoin exchange - are online sites where buyers and sellers are automatically match. It has lower fees and no direct communication between buyers and sellers.
The complete list of buy orders and sell orders are listed in the markets orderbook.
Buy orders are called bid since people are bidding a price to buy bitcoin, however sell order are called ask since they show the asking price of the sellers request.
In exchange, Bitcoins price refers to the price in the last trade conducted in a specific exchange.
You will also not in an exchange the terms high and low. This refers to highest and lowest price of bitcoin in the last 24 hours.
Volume stand for the overall bitcoin that have been traded in a given timeframe. Significant trends are usually accompanied by large volume and vice versa.
Types of orders
There are three types of order you can place in an exchange.
Market order - an order that is instantly fulfilled at any price. In this order you don't stop buying bitcoin until the order is fulfilled.
Limit order - you only buy or sell in a specific price that you decide on. You may not fulfill your order because of buyers and seller don't agree on your price
Stop Loss order - a timed market order for cutting losses. Its as if youre saying that you will sell your bitcoin when a certain price drop reach.
Subscribe @serg02 Reading price graph
• Bull vs bear markets - a bull thrust his horn up in the air, while bear swipes his paws downward. This are metaphors of the movement of the market. If the trend is up, it is a bull market but if the trend is down, it is bear market
• Resistance - bitcoin graph has a virtual ceiling when hit and cannot go any higher for a ling period of time
• Support level - acts as floor by preventing the price of an asset to go downward.
Resistance and support levels are usually whole round number. This round whole numbers tends to acts as strong barriers.
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Risk more than you can afford to lose - trade in an amount you are comfortable with
No action plan - you should know why you are entering a trade and when to exit a trade
Leaving money on exchange - you should always pull out money on a exchange that you don't use to prevent accidents like hacking the exchange
Giving in to fear or greed - when entering a trade, you should be ready for any consenquences
Bitcoin trading is complex. There are many things you should consider before entering the trading game.
This article are the basic of trading. So if you wanna get into deeper, you should do uour own research or ask some financial advisers.
It’s expensive but,profitable