Bitcoin trades 24/7

Bitcoin trading is exciting because of Bitcoin’s price

movements, global nature, and 24/7 trading. It’s

important, however, to understand the many risks

that come with trading Bitcoin. Unlike stock markets,

there are no official Bitcoin exchanges. Instead, there

are hundreds of exchanges around the world that

operate 24/7. Because there is no official Bitcoin

exchange, there is also no official Bitcoin price. This

can create arbitrage opportunities, but most of the

time exchanges stay within the same general price

range. Bitcoin is known for its rapid and frequent price

movements. Looking at this daily chart from the

ccxcrypto - ccxcrypto crypto Currencies BPI, it’s easy to spot multiple days with swings of 5% or more.

Bitcoin is global

Bitcoin isn’t fiat currency, meaning its

price isn’t directly related to the

economy or policies of any single

country. Throughout its history,

Bitcoin’s price has reacted to a wide

range of events, from China’s

devaluation of the Yuan to Greek

capital controls. General economic

uncertainty and panic has driven some

of Bitcoin’s past price increases. Some

claim, for example, that Cyprus’s

capital controls brought attention to

Bitcoin and caused the price to rise

during the 2013 bubble.

There are two techniques commonly used by day traders to increase their

profits from market movements. Leverage, or margin trading, means

borrowing money on a short-term basis to speculate on the price of

Bitcoin. The loan is paid back when you exit the position.

Tools and indicator

There are many tools to help you profit, and minimize your losses. Two you should learn about are limit

orders (which execute a trade at a certain price, whether you are there or not) and stop-losses, which

can be used to lock in profits when the price changes direction after moving in your

favor. You will also learn to read the market by keeping track of different

indicators. Technical analysis is an extremely complex

discipline, but you can start to understand the

underlying trends and forces that

shape the market by

learning about volumes,

moving averages of

different kinds, and

different patterns that

emerge in the charts.

Short selling

Is a way of profiting from downward movements in price. Usually you would need to buy bitcoins to

profit, selling them at a higher price and pocketing the difference. If you want to profit from the price

falling, you must own bitcoins in the first place. You sell them and buy back at a lower price. This is the

simplest way of shorting, but it only works if you have bitcoins in your account.

 

With true short selling, you effectively borrow bitcoins, sell them, and buy them back at a lower price

before returning them to the lender – keeping the difference in price. This is carried out in various ways

(you may or may not actually be borrowing bitcoins from the exchange or another user), but the effect

is the same. You can also leverage your short sells in the same way that you would leverage a long

position.

Getting Started

You can start day trading on any bitcoin exchange that has adequate liquidity. Smaller exchanges will have lower volumes, and therefore a larger ‘spread’ been bid (buy price) and ask (sell price). That means the price must move further before you are in profit, and trades may take longer to execute. Therefore, sign up with a large exchange where you can be sure that liquidity and speed of trading will be suitable. And, as ever, make sure the exchange is reputable. It makes no sense to make thousands of dollars (or bitcoins) day trading, only to have them disappear when the exchange is hacked or goes bankrupt through mismanagement. Bitstamp is a good place to start. It is the world’s largest bitcoin exchange and has an excellent reputation. Bitstamp is an exchange, rather than a Bitcoin trading platform.

You can buy and sell bitcoins quickly and easily, and begin to learn about the way the market tends to react. You can place orders in real time (buying and selling at the ‘spot’ price) and set limit orders, which execute when the price reaches a certain level. However, Bitstamp is not designed for advanced day trading. Other exchanges and platforms have more advanced tools that allow you to use more sophisticated trading techniques and amplify your gains – and your losses. Use them with caution!

Copyright © 2019

High Risk Investment Trading foreign exchange carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts

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