Cryptocurrencies have carved a niche in the financial industry since its popularity. This article is aimed at educating beginners on how to trade bitcoin along with the risk involved. In popular culture, trading is considered hectic and fast-paced because it doesn’t invoke instant wealth. Instead of randomly pushing buttons, trading involves an informed decision-making process. For most beginners, the concept of how to trade bitcoin itself is quite frightening.
However, trading is an encompassing word that covers various financial markets. For instance, have markets for options, exchange-traded funds, forex, stocks, and contracts for difference. Recently, we have the cryptocurrency market, which has become popular since the advent of Bitcoin investment or trading. In this article, you will learn the basics of bitcoin trading and how to trade bitcoin.
What is Bitcoin?
For beginners thinking to start their bitcoin investment, a bitcoin is a digital currency, which is stored virtually. It is like your traditional US dollars that are stored in a bank. Alternatively, it is online cash that you can use to buy or pay for products and services.
However, not all shops allow bitcoin use as a means of payment because it is banned in some countries. Before we talk about how to trade bitcoin, you must understand how bitcoin works.
How does Bitcoin Work?
The next question is, how does bitcoin work? Each bitcoin has a computer file, which is kept in a digital wallet on a computer or smartphone. Through this, people can send bitcoin from their wallet to another person.
Interestingly, each transaction that takes place is documented in a public list, also called Blockchain. The transparency in each transaction makes people venture into bitcoin investment besides the confidentiality of the individuals involved.
How can anyone get access to bitcoin?
Despite the number of cryptocurrency lists we have, you can get bitcoin in three ways. The first step is to buy bitcoin with your traditional money like dollars or pounds depending on your currency. Secondly, you can sell things or render a service where customers can use bitcoin to pay you.
Lastly, you can create your bitcoin if you have the computer required to create it. With these simple steps, anyone can get access to bitcoin irrespective of your location. Now, you can know how to trade bitcoin since you understand how to get access to bitcoin.
How to trade bitcoin with ROInvesting
Trading bitcoin is quite easy if you understand the concept of trading. However, the following are simple steps on how to trade bitcoin with ROInvesting if you are a newbie.
- Open an account–To trade bitcoin, you require a trading account. Nowadays, it takes less than 5 minutes to get your account setup. You can begin that journey with Oinvest and get your account funded. However, if you are new to the cryptocurrency market, it is advisable to start with a demo account.
- Develop your trading Plan – Cryptocurrency is very lucrative. It would be best if you streamlined your portfolio. The number of cryptocurrency list we have are endless, which is why you have to decide on which coin to trade. Besides this, you need to outline your entry and exit strategies along with a risk management plan. You have to discover the strategy that works best for you and your trading style. This often time will require practice.
- Don’t underestimate RESEARCH - Before you begin, you must equip yourself with the latest news in the cryptocurrency market. We have news and insights tools to help you stay abreast of the latest news in the market. Research plays a vital role because the market is driven by news.
- Start Trading – once you have followed the steps mentioned above, the next step is to place a trade. This will require you to enter the amount you want to stake on a particular ticket. Then, you have to define the condition you wish to set a stop or a limit depending on the direction of the market. If you expect the price to rise, then you will consider buying. However, if you predict a fall, the best option is to sell. It doesn’t take rocket science to understand these simple steps on how to trade bitcoin.
Is there any risk associated with Bitcoin trading?
As with any form of investment, there are risks associated. Bitcoin trading isn't exempted because trading is a risky adventure. Therefore, it is crucial to plan your strategy carefully while staying abreast of the market. Additionally, you have to conduct your analysis instead of relying on someone's analysis.
If, after considering the risk and still thinking that you want to venture into bitcoin, you need to understand the concept of risk tolerance. Don't be encouraged by the hyping in the cryptocurrency industry of the high potentials for anyone that invest because there is every tendency to lose your capital.
The cryptocurrency is young but very volatile. This volatility helps in creating both high gains and losses for those who don’t understand how to trade bitcoin. This is not to say that if you follow the simple stop-loss concept, it doesn't stop you from minor losses.
What are common mistakes in trading Bitcoin?
If you have made it to this level, you are serious about knowing how to trade bitcoin. Trading involves money, and you stand the likelihood of losing your money. The following are common mistakes you should endeavor to avoid if you want to continue trading in the cryptocurrency market.
- Over risking your account – By far, this is the biggest mistake because if you risk more than your account, you may lose your capital. Trading is very risky; therefore, you should only invest what you are willing to lose.
- No concrete Trading Plan – Without having a plan, you have already planned to fail. Yes, it would help if you had a clear plan for your entry and exit points. Additionally, you need to set up a risk management plan.
- Emotion – Emotion plays a critical role in trading. It would be best if you avoided the feeling of greed and fear because it can make you to prematurely close trades.
- Not learning from experience – It doesn't matter if you have been successful, there is always a lesson to remember. You can use your expertise to make better trading decisions.
Why ROInvesting is what you need for trading bitcoin
With the wrong platform, all your bitcoin trading will be like pouring water in a basket. To achieve the best result, you need a reliable platform that puts your interest first. Yes, that is what the ROInvesting platform is all about.
There are various reasons why you have to join us today. These include:
- We maintain a high level of security on our platforms to meet with various international regulations. The cornerstone of our commitment is the security and privacy we offer to our traders.
- We don’t only provide a platform for trading but also one that inspires our clients to turn their ambitions into reality.
- We provide online courses, articles, tutorials, VODs, and e-books to keep you informed about what is happening in the market. These materials are suitable for both beginners and professionals in the industry.
- We have a superior customer support system available from Monday to Sunday from 07:00-17:00 GMT.
- We provide a multi-function platform, which is available on mobile and web, thereby giving you seamless trading.
It is quite easy to learn how to trade bitcoin if you adhere to the few steps illustrated here. ROInvesting is the best platform to start your bitcoin trading as it offers everyone to invest in the cryptocurrency of their choice. Additionally, the platform has a wide range of materials to make your bitcoin trading easy.