Virtually everyone who has access to the internet these days knows about Bitcoin. It is very rare to come across anyone who has not heard about this cryptocurrency. Although bitcoin came about in 2009, it really gained mainstream popularity back in 2016. It was the time when the cryptocurrency market really started to make waves.
The massive rally that occurred in 2017 was one of the major reasons why a lot of people became aware of bitcoin and other cryptocurrencies and eventually started to trade and invest in it.
Although bitcoin is still the most profitable cryptocurrency out there, it hasn’t been able to return to the heights that it reached in 2016 and 2017. Because of this, naturally, Bitcoin’s value has slightly deteriorated and its profitability is not like it once used to be.
However, this doesn’t mean that it is bad news, in fact, bitcoins and various other cryptocurrencies face highs and lows quite often. It is nothing unusual and if a trader keeps a watchful eye and monitor’s the cryptocurrency he or she has invested in, could make a sizeable sum of money. That being said, trading bitcoins is not easy. You need to have a certain amount of knowledge and experience in order to really see a return from your investments.
The ups and downs in the bitcoin price action 2019 were quite interesting. It attracted a large number of investors and traders. Before really getting into trading this cryptocurrency, it is vital to make sure that you know about the risks and ups and downs involved with it. There is no secret that cryptocurrencies are quite volatile and if you do not deal with your cards right, you could end up losing a considerable sum of money.
Of course, Bitcoin has proved multiple times that it is quite profitable for users but on the other hand, people who did not trade this cryptocurrency wisely ended up paying the price and lost their investments. You must also keep in mind that cryptocurrency, although popular has not been globally adopted.
This makes it quite speculative too. That being said, if someone is really looking forward to dipping their feat in the cryptocurrency world, they should only invest money that they can bear the losses of.
Do you happen to be someone who is looking to trade bitcoin but does not know how? Well there is no need to worry as this is a simple bitcoin trading guide for beginners (2020 updated) and will tell you everything you need to know about trading in bitcoin with relative ease.
Bitcoin Trading – How To Do It?
This article will go through all the details regarding cryptocurrency trading, especially Bitcoin trading. Remember that there are thousands of variables involved in bitcoin trading. So, no matter how much knowledge you gain, it is vital to do months of risk-free practice before you actually start bitcoin trading.
New traders often believe that they’ll become rich immediately after starting bitcoin trading. This could not be any further from the truth. In fact, this kind of mindset is one of the main reasons why so many beginners lose hope and end up losing their investments and interest in bitcoin trading.
You must avoid this at all costs and remember that Bitcoin trading can be a tedious process. Simply said, those who wait for the perfect moment are the one who reap the rewards in the crypt currency world. Wait for prices to go up and start trading.
Also, as mentioned earlier, you should take as much time as you can to learn how cryp[to currency trading works. There are minute details that can make all the difference in the world. Being mindful of these details is what separates the professionals from the rookies. Build a solid base and follow the right steps if you want to become a successful bitcoin trader. Here are the first things that you will need to do in order to start trading bitcoin
- Start a trading account
- Begin performing trade analysis
- Determine the different kinds of trade strategies and how they would benefit you
What is the Difference between Bitcoin Trading and Bitcoin Investing?
One of the first things you must be aware of if you want to become a successful bitcoin trader is understanding the essence of Bitcoin trading, what it essentially is, and what makes it completely different to Bitcoin investing. To make things easy to understating, investing in Bitcoin essentially means buying Bitcoin as a long term investment.
Simply said, Bitcoin investors firmly believe that their investment’s price is bound to rise. So no matter the ups and downs that occur in the journey, these investors hold it for as long as they possibly can until they are guaranteed to make a sizeable profit.
On the other hand, bitcoin traders are quite different. They essentially sell and buy bitcoin in the short term. They make profits whenever it is possible. This is quite different from investing in bitcoin the bitcoin traders consider this cryptocurrency as an instrument that makes profits.
You may even come across a large number of traders who do not even care to study the ideology or technology behind bitcoin. This, however, does not mean that they do not care about the product that they are trading. There are some people who trade and invest simultaneously as well for more details must visit xtrgate.
As far as the sudden increase in Bitcoin’s popularity goes, there are numerous reasons behind that. First of all, as we discussed earlier, this cryptocurrency is quite volatile. To make things easier to understand, you can make a considerable amount of profit with the help of bitcoin as long as you are able to anticipate market movement correctly.
Secondly, unlike all the traditional markets, you can trade bitcoin at any time of the day. Markets like commodities and stocks mostly have a closing time and an opening time. With bitcoin, however, traders and investors can sell any buy the cryptocurrencies whenever they please. Also, the slightly unregulated world of bitcoin makes it quite easy to being trading without worrying about monotonous and time-consuming processes for identity verification.
Understanding Blockchain – The Main Technology for Bitcoin
In 2017, there were a plethora of traders and investors who were not even aware of what they were buying until very late. They found out much more about bitcoin when they started to understand the primary concepts of cryptocurrency and blockchain as a whole.
Blockchain is essentially the main technology responsible for every cryptocurrency. This includes bitcoin as well. Although getting a deep understanding in the initial stages may seem like a tough task because of all the complications that surround it, you can still easily understand simplified principal concepts.
The blockchain is basically a string of records secured and linked by utilizing cryptography tools. Every piece of information that pertains to these records can neither be changed and nor can it be modified. The all-encompassing chain becomes a ledger. This is where all the new records are developed and linked. The provide a clear track of movements that occur in the ledger.
There is an excellent analogy for explaining the inner workings of blockchain. In this analogy Google drive and Microsoft word are used as an example:
We all are aware of the fact that sharing a file from Microsoft word would need you to attach the file before sending the email in order for the receiver to review, open, and modify it – and eventually send the file back. The result behind this was highly dependent on two or even more than two individuals between whom are there want any efficiency or transparency whatsoever.
Google Drive, on the other hand, allows numerous individuals to join the file and modify it online. People who use this approach are well aware of the fact that their file’s latest and updated version is always present online. Plus, it would not need numerous emails or versions for completing.
An approach like this closely follows the basics behind the inner workings of decentralized platforms and how a simple matter of ownership proves to be the barrier between all users, which allows for total anonymity and transparency simultaneously.
Sure, you may have found this example to be quite simple but it effectively proves that blockchain is more than adaptable for various purposes other than cryptocurrencies as well. It is also a key reason behind the success of bitcoin
The Perfect Way for Trading Bitcoin
Quite a lot of brokers provide traders simple, quick, and cost-effective options for trading bitcoin. Other than utilizing brokers, you can also reach the bitcoin market by directly acquiring the cryptocurrency from any exchange that provides it.
This also gives you the chance to sell and buy, however, this option will not be as flexible and direct. It will also be more expensive and slightly difficult. If you plan to trade actively, you must opt for a broker and keep exchanges for backup.