Tuesday, July 23, 2024

How to Trade Bitcoins to Make Money

Are you also excited to buy the world’s most valuable currency and keep it as an asset with you? That’s a good idea to start with but before you start trading bitcoin, you should be aware of the fact that along with being most valuable this is the most volatile asset as well. Whose value may fluctuate between two extreme values within no time.

That’s why before you start trading, be aware of every aspect of trading bitcoin, once you know how to trade bitcoins to make money, then welcome to the world of buying and selling Bitcoins, which is called trading of bitcoins.

Read More: 5 Best Working Methods to Turn Bitcoin into Real Money in 2023

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What actually is bitcoin trading

Bitcoin trading simply means to buy or to sell bitcoin through an exchange platform. There are two ways you can trade bitcoin:

  • Buying and selling of Bitcoin via crypto currency exchange
  • Buying and selling of Bitcoin via derivative financial instruments, for example: Contracts for Differences (CFDs).

CFDs allow traders to trade according to the direction of market movement of Bitcoin price and they can bet on Bitcoins without actually buying those coins.

Note: Bitcoin awareness is not just necessary to prevent your loss but it’s necessary to take right decisions that keeps you safe on jurisdiction ground.

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How to Trade Bitcoins to Make Money 1

Steps to trade bit coins to make money

Step 1: Open a bitcoin trading account

  • It’s a simple and quick process of opening an account, there are various bitcoin friendly exchanges that offer such services.
  • Users can open their bitcoin trading account using CoinSwitch Kuber, Zebpay, Wazirx, CoinDCX.
  • They will require your personal information and Know Your Customer (KYC) requirements.

Step 2: Fund your account

After you sign up with crypto exchange, now you can fund your account via bank deposits, wire transfers or peer to peer (P2P) transfer.

Step 3: Choose Bitcoin to invest in

After your account has money, now you are eligible to choose the quantity of Bitcoin that you want to trade further.

Step 4: Begin the trading process

Once you buy enough Bitcoins, you can start applying trading strategies. As a beginner you can use trading bots available at your crypto currency exchanges. These bots can help you bring out significant returns based on your trading priorities and in turn help you to  trade bitcoins to make money

Step 5: Safe storage of Bitcoin

Once you have enough Bitcoins collected, you can store them in digital wallets to keep them safe for longer. Usually there are two types of digital wallet hardware and software wallet. Both have their own pros and cons.

Bitcoin Trading Strategies

Bitcoin day trading

  • This is the most common trading strategy used by traders, also named as intraday trading.
  • According to this strategy, traders enter and exit the positions on the same day. So no overnight bitcoin market exposure to traders.
  • There are no overnight funding charges in day trading
  • Day trading is an ideal strategy for those traders who are looking forward to earning profits from bitcoin short-term market fluctuations.

Advantages

  • Quick profits.
  • Better risk management.
  • No reflect of overnight market changes

Disadvantages

  • Chances of quick loss of money
  • Short-term process
  • Difficult to close the deal with in a day
  • Required fast pace understanding of the market
How to Trade Bitcoins to Make Money 2

Bitcoin swing trading

Bitcoin swing trading is a game of a very narrow time frame. Traders seek advantage from short-term price patterns. This strategy is based on the fluctuating nature of the prices. For this reason, a swinging trader seeks benefits from both up and down market movements.

Advantages

  • Traders get more time to analyze the day trading
  • Less risk involved and hence traders have more time to take long-term decisions
  • Less stressful as compare to day trading

Disadvantages

  • Traders require deep research and profound knowledge of the field
  • Traders need deep research related to bitcoin
  • Comparatively difficult to learn

Bitcoin Position Trading

Position trading is a long term approach which is also named as trend trading. It requires traders to hold and buy bitcoin for a longer period. In this kind of trading you will need to focus on long term growth rather than short term goals.

Advantages

  • Comparatively easy to learn
  • Comparatively less problematic
  • Market movements are predictable

Disadvantages

  • You get profit results only after long term experience
  • It is risky to hold positions for long term

Bitcoin Scalping

This trading strategy focuses on very short term movements. Using this strategy, users can make frequent and substantially small profits in very little price changes. That’s how you  trade bitcoins to make money.

Advantages

  • Quick profits at a high rate

Disadvantages

  • Need professional skills for profits
  • Very risky

Bitcoin trading is still a new and fragmented idea for many people. Bitcoin is open to margin trading and arbitrage, that’s why it’s a huge opportunity for traders to earn short term gains. However you shouldn’t forget that bitcoin is subject to various changes in taxation, regulation and volatility, so traders shouldn’t get caught up in its hype and always be vigilant about constant changes in the Bitcoin world. Once you understand how to trade bitcoins to make money you should know how to analyze bitcoins, so that you can become a top notch player.

Also read: How to Analyze Bitcoin for Maximum Profit

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Palak Sharma
Palak Sharma
I am Palak, born and brought up in Himachal Pradesh. An introvert by nature who loves writing more than speaking. I do it often to express myself, to entrain myself, and to feel meaningful. While enjoying this world of words I ended up being part of a published anthology 'Blooming skies' with my poem 'On the day of devastation'. I love this concept of written words living on a paper till the end of time, they give me a sense eternity.

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