Explaining the Process of Trading With Bitcoin

Bitcoin trading is not much different from stock trading in terms of its definition. You have to buy some coins in hope that their price will go up and then you sell them and gain profit. However, the process is not as simple because various derivatives impact the price change. Therefore, it is not always your win.

But to your surprise, there is algorithmic software that helps you analyze the market trend. Thus, you can make a precise decision and not just depend upon your luck. Professional traders use such platforms and algorithms to trade their coins on platforms such as bitcoin-code.io.

It is an application with powerful algorithms and will help you out in providing highly accurate results. All you have to do is to go to bitcoindigital.io and sign up for it. This application can help you in getting insane profitability with its advanced trading algorithmic ways.

The most interesting thing here is that you don’t need any professional qualifications to use this app. It is a robotic platform and therefore, all the trading that takes place here is automated. You don’t need to know about trading at all. So even if you are a beginner, you will still have a chance to earn more.

But you cannot always depend upon the robotic programs, you need to learn things too. So here is a guide to help you out in Bitcoin trading.

So what changes the price of Bitcoins

img source: masterthecrypto.com

Certain factors move the worth of coins, if you know them, you will have a better understanding of the trade. These include;

Supply of coins

Supply and demand have a direct impact on the price of anything and that’s something quite well known. Currently, the supply of coins is 21 million and it is expected that this supply will exhaust by 2140. So that means we have a finite supply right now.

Furthermore, market trends show that the demand will definitely increase as people are getting more interested in cryptocurrencies. So after a few years, this price will increase undoubtedly.

Negative press

Press releases have a significant impact on the price of Bitcoin. It is the press that attracted several people especially the common people into cryptocurrency. Likewise, if there is negative news about coins, it will decrease their value. This negative news could be anything like lack of security, information leakage or less longevity.

Integration

img source: merchantmaverick.com

Bitcoin is becoming public. Now you can find online sellers and buyers who are willing to trade through Bitcoins. Furthermore, even Tesla is ready to sell its cars through Bitcoin exchange. With this enormous integration, the price will increase undoubtedly. Why? Because this will increase the demand, which will be a positive sign for Bitcoin owners.

Important events

These include changes in the regulation of coins, announcements related to the macroeconomics of Bitcoin and any security breach. All of these events can impact the price both positively and negatively. With coin holder confidence, you will see a rise in price but in case of any mishap, the price decreases.

Choose your trading strategy

There are four trading styles that people use. The choice depends upon the experience of the coin holder and the market trends. You can also choose the one that seems right for you.

1. Day trading

img source: zfx.co.uk

Day trading is a short-term trade method. Thus, you will open the position in a single day and close it on the same day. Even the overnight market exposure won’t be there. This method includes short-term profit through price changes. But this is suitable if you have enough time to spend daily.

2. Trend trade

This is like going with the waves. If the price trend goes up, you will buy more coins. Likewise, when the market price goes down, you sell fewer coins. No one would sell the coins at a low price than at what it was brought. And if the slow trend keeps on, you will have to close your position. However, you can always open up a new one to match with the up-going trend.

3. Hedging Strategy

The first two strategies put you on the safe side. However, this one involves risk-taking. You have to take the opposing position of your already open trend. However, this is only for the situation when you expect the opposing trend. Otherwise, you will be at a loss.

For example, you have some coins in your wallet and there is a possibility that their price will go down. So instead of waiting for that time, you open a short-term drop position in the price with CFDs. So you will sell your coins before they actually drop. Afterward, even if the price drop, you will have a better gain and this will offset your losses.

4. HODL strategy

img source: hackernoon.com

This strategy is just like its name that is you buy bitcoins and hold them until their price increases. Although it is usually heard that this is a short form for hold on for dear life but that is just mere speculation. It is more likely to be close with the “hold and delay” strategy. Because you hold on to your coins and delay the selling time until you get the maximum out of it.

However, this strategy is not as simple as the previous ones. You need to have the proper market knowledge and should be aware of pricing trends. In short, you should have experience in trading. Only after that, you can make a profit using this method.

Firstly, you have to do deep research on the coins and make your trade plan. If the trend indicates an increasing price, you can sell them when it reaches its maximum. On the other hand, if you expect the market to drop the price, you can choose to hold on. Though the coins will be in a dormancy state but at least you won’t lose your money. Thus, you will be able to close your position to stop any loss.

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