You must have heard about the first modern currency in the world of cryptocurrencies, i.e., Bitcoin. It was invented in 2009 by a mysterious programmer named Satoshi Nakamoto. Bitcoin is a digital currency that can be used as a medium of exchange, just like fiat currencies. There is no mediator in bitcoin transactions because it is a decentralized currency. Bitcoin provides great investment opportunities to its users, and people prefer to invest and trade in bitcoin rather than investing in fiat currencies.

Bitcoin trading is the process of buying bitcoins at a low price and selling them at a high price. Unlike fiat currencies to increase the value, you don’t require to hold bitcoin in the long run. The bitcoin market is very volatile, and the price of it keeps on fluctuating. The traders must keep themselves updated with the current price and news by studying the bitcoin market as a whole. The beginners can also join and can understand the market and make profits. 

It is not easy to understand the bitcoin market, but there are two main types of analysis that can help you predict the price of bitcoin: technical analysis and fundamental analysis. A trader can only be successful by investing efforts, money, and time in analyzing the market and actually doing good at it.

How to Trade Bitcoins?

To put in a nutshell, there are certain steps that a user needs to follow to trade bitcoins:

  • Get an account in bitcoin exchange.
  • Provide some personal information to verify your identity.
  • Deposit the amount that you want to add to your account.
  • Get your opening position on a bitcoin exchange.

Here, in this article, we will gain knowledge of bitcoin trading in detail. 

Difference between bitcoin trading and investing

The crucial thing is to understand the difference between bitcoin trading and investing, as most people consider both as the same. Investing in bitcoin means buying bitcoin, and people invest because they expect the price of bitcoin to increase in the long run. The reason that attracts people to invest in bitcoin is the underlying technology and system of it. 

Bitcoin traders can buy bitcoin for the short run as well. They tend to buy bitcoins at fewer prices and make a profit by selling them at a high price. Because bitcoin is volatile, it provides high investment opportunities to users. Unlike traditional markets, bitcoin exchanges operate 24/7, which makes the trading process easy. 

What are the trading methods?

The main motive of traders is to make a profit no matter whether they invest in the short-run or long run. There are some trending trading methods which include:

Scalping is a trading strategy that helps users to make considerable profits on a small change in price. This trading type mainly focuses on short-term trading, and the main motive of this is to make small profits that involve limited risks and is more advantageous. It is estimated that scalpers make hundreds of trades each day by earning small profits. 

  • Day Trading

The day trading method involves carrying out several trades in a single day. The trades are made on a small scale to make a profit from minor changes in the price of bitcoin. Multiple trades in a day require the day trades to spend maximum time looking at computer screens. The day trades make several trades and close all the trades at the end of the day.

How to analyze bitcoin prices?

There are two main methods of analyzing prices: fundamental analysis and technical analysis.

  • Fundamental analysis

The fundamental analysis includes the trades to look at the bitcoin industry, technology, technical development, protocols across the world, and issues that affect bitcoin growth. These factors determine bitcoin’s price, and fundamental analysis means to study and evaluate all these factors before trading.

  • Technical analysis

Technical analysis is the analysis of studying the market of bitcoin. Studying the market includes understanding the price movements, trading volumes, and more. The trends and patterns of change in price or that will occur in the future is technical analysis. The main assumption of technical analysis is to understand the price of bitcoin in the future.