Cryptocurrencies, Bitcoin, in particular, are the new rave in financial and currency circles. From its spectacular volatility to its ease of use and its security, it has become an immensely popular currency. Everybody wants to get involved in the use and handling of this spectacular currency.
However getting involved in the use is not the only thing you can do with Bitcoin. You can make a whole lot of money online with Bitcoins and one of the ways in which you can do this is by trading Bitcoins, you can check out this previous interview about a lady that makes money online trading bitcoins. Other ways include mining Bitcoins and becoming a market speculator on the currency.
Bitcoin trading can be extremely profitable for professionals or beginners. The market is new, highly fragmented with huge spreads. Arbitrage and Margin trading are widely available. Therefore, many people can make money online trading bitcoins. Compared to other financial instruments, Bitcoin trading has a very little barrier to entry. If you already own bitcoins, you can start trading almost instantly. In many cases, verification isn’t even required in order to trade.
What Is Bitcoins Trading?
Just like the stock market, bitcoin trading involves buying at a low cost and selling when the price has gone up. Bitcoin is a volatile currency which means the rate can rise or fall several times a day with a margin of $10-100 per bitcoin value. This makes it a perfect candidate for people who are ready to invest their money and try out their speculative and predictive skills. Being a Bitcoin trader involves buying Bitcoins at a low cost and selling them off at a higher price or when there is a price increase. What makes it even more profitable is that you don’t have to wait for long periods of time for the price fluctuations and the price differences are usually quite high.
3 Steps You Can Take To Start Making Money With Bitcoins
#1 Sign Up to A Trading Exchange
The first thing you need to do on your way to becoming a Bitcoin trader is to sign up to a Bitcoin exchange platform. Bitcoin exchanges are set up for the purpose of trading Bitcoins just like stock exchanges. However, there is no central Bitcoin exchange. Instead, there are hundreds of exchanges operating 24/7 all over the world. So you just need to pick one to suit your needs. Here are a few things to check out when selecting an exchange:
Location: If you have to deposit fiat currency, you must look for an exchange that accepts payments from your country.
Fees: Check out what percentage of each trade is being charged and pick the exchange with the most favorable fee.
Liquidity: If you are planning on becoming a large trader, then you must pick an exchange with high liquidity and good market depth.
Other Bitcoins exchanges include:
Bitfinex: Bitfinex is the world’s #1 Bitcoin exchange in terms of USD trading volume, with about 25,000 BTC traded per day. Customers can trade with no verification if cryptocurrency is used as the deposit method.
Bitstamp: Bitstamp was founded in 2011 making it one of Bitcoin’s oldest exchanges. It’s currently the world’s second largest exchange based on USD volume, with a little under 10,000 BTC traded per day.
Coinbase: Coinbase Exchange was the first regulated Bitcoin exchange in the United States. With about 8,000 BTC traded daily, it’s the world’s 4th largest exchange based on USD volume.
Kraken: Kraken is the #1 exchange in terms of EUR trading volume at ~6,000 BTC per day. It’s currently a top-15 exchange in terms of USD volume.
Once you’ve signed up to the exchange of your choice, fund your account with Bitcoins either directly on the exchange or buy from outside and then transfer to your exchange account.
#2 Develop a Trading Strategy and Study the Market.
Trading without having a good strategy is like going to battle with your bare hands and no plan in your head or say perhaps going to your in-law’s house for introduction empty handed; you’ll get kicked out on your ass. Trading without having studied the strategy you have and the market properly is like taking a knife to a gunfight. Either way, you are going to lose. As Sun Tzu said in his book – the art of war “know thy enemy and the battle is half won”.
Don’t rush into trading without having properly studied the market, developed a good strategy and study the strategy very well. It’s a very bad beginner’s mistake.
Also, don’t get greedy. This is not a get rich quick scheme. Don’t jump into it hoping to become a millionaire in a week and don’t try to take shortcuts. Professional traders can make a lot of money in a short time but they’ve put in a lot of time and study and have been really patient and persistent, so you should do the same.
There are many free resources online to help you get started with trading bitcoins. You can get a mentor and it’s also good to join forums and professional trading communities. You get quality interactions with professional traders there and it will help you a lot.
#3 Get a Lot of Practice
Studying theory and having a trading plan is the easy part, the hard part is execution. Most traders start trading only to find out that managing emotions and sticking to a plan is not as easy as they thought.
Only hands-on experience can make you a proficient trader. Years of experience in trading can teach you how to stay calm under pressure, cultivate patience and how to stay objective. So get a lot of practice, learn to be patient and you are very good to go.
Once you do all this, you are on your way to becoming a professional and very successful Bitcoin trader, subsequently, you can make money online trading bitcoins.
Lastly, remember, it is not a done-for-you system this is no autopilot and this is not a get rich quick scheme, so be patient.
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