A beginner’s guide for Bitcoin

Trading involves buying and selling assets, in this case the asset being bitcoin. People participate in trading to make profits out of the price movements of the assets. Trading can be long term where traders hold on to assets for a long time to benefit from price changes as well as short term where traders hold short term positions to benefit from daily changes. 

In order to trade in any sort of asset, you need capital. This capital can be in the form of savings, cash, or even another form of asset including cryptocurrency. It is not wise to partake in trading if you do not have enough assets. This is because trading involves substantial risks and you run a chance of losing everything you have invested. This is why taking the decision to step into trading waters can be difficult. It requires an overwhelming amount of research into different kinds of markets and price trends and determining an optimal trading strategy based on your requirements and the amount of risk you are willing to take. 

WHY TRADING IS MPORTANT?

Trading in bitcoin can especially be very daunting because it is still a newer concept and not a lot of people know about it enough to be able to make profitable decisions. It is recommended to start trading with smaller amounts so that in case you are on the wrong side of the trends you do not lose out on a lot. 

In order to trade in bitcoins, first you will need to convert your fiat money into bitcoin. You can buy bitcoin using your credit or debit card or on a peer to peer exchange. You can also earn bitcoins through the process of mining. Once you have got bitcoins in your wallet, there are a plethora of trading platforms you can choose from. Traders are recommended to keep a trading journal. A trading journal is to document all your trading activities. This helps you keep a track of your performance. 

Cryptocurrency exchanges connect buyers and sellers to facilitate trading. A good trading platform will match you to a counterpart best suited to your financial needs. The exchanges charge a fee for doing this. 

You can do short term trading with bitcoin. This is where you buy the bitcoin and hold on to it for periods varying between a few minutes to a few months. This is generally done when you expect prices to change within a very short time and you use that to make quick profits. For more information you can visit bitcoin profit website

Bitcoin prices are very volatile and can move drastically within a day, unlike any other form of asset. Short term trading in bitcoin is beneficial also because of the large trading volumes. Large trading volumes guarantee that you will find a buyer or seller. 

The volatility of the bitcoin market comes with its disadvantages. It requires a detailed study and analysis of markets to be able to perform well with short term trading. If you are trading short term, make sure to notice small movements in prices. However this requires very analytical skills and a lot of experience reading charts and graphs.  Long term traders, on the other hand, buy bitcoins and hold onto them for at least a year. The idea behind this is that, although volatile, the price will change according to your expectations sometime within your holding period. This is more suitable for more risk averse people who want guaranteed returns, no matter the time involved. 

To trade in the long term, you will not need to analyses graphs and charts showing price movements, making the process less time consuming and stressful. Unlike short term trading, you will not have to constantly keep a check on where the value of bitcoin is going.  It also does not need you to use a lot of money to get started. So it is a good option for people who have a small sum of money and want to make some gains out of it. However, by holding onto the bitcoin for so long, you miss the opportunity to make short term profits that more quick and easy. Since you are not required to keep a track of market movements, you may often miss out on some events that may unexpectedly affect the prices by a lot. 

The Bitcoin Prime App aims to help you start your trading journey. It believes that everybody deserves a chance to be a part of this important invention of the modern era. Irrespective of technical skills, social standing or interest in trading, people should get to know about bitcoin and everything it entails.

Conclusion:

Bitcoin has had a turbulent history involving sporadic ups and downs, so being skeptical is normal. But it is just like any other asset and it is not perfect. The value of bitcoin currently stands at $9,000 which is a drastic increase since its crash at the start of the global pandemic. However, it did have a speedy recovery and is now at par with the value before the pandemic.

Leave a Comment