Bitcoin's value is so volatile that it's been called a bubble, and the rise and fall of its value are followed daily in the news. This volatility means buying Bitcoin is like playing the lottery for most people.
But when you think about it, there are some real advantages to Bitcoin's fluctuation. When trading in a fluctuating currency, it doesn't matter how much money you make as long as you get out of a trade with more money than you started.
To make learning about Bitcoin trading easier, we've compiled a list of 10 tips for how to start trading this new currency. This list is made for those who are unfamiliar with Bitcoin and those who are just learning about it. Everyone can learn something from this guide; hopefully, you will find it helpful.
What Is Bitcoin?
Bitcoin is the world's first decentralized digital currency; it was created in 2009 by an unknown person using the alias Satoshi Nakamoto. Transactions are made without middlemen, so there are no transaction fees and no need to give your real name. The currency is not backed by a tangible commodity (such as gold or silver), and bitcoin is traded online for dollars, euros and other currencies.
Bitcoin is an open-source product accessible by anyone who is a user. All you need is an email address, Internet access and money to start. You don't even need a bank account!
The concept of virtual currency has been around for ages. However, it was in 2008 when someone (or someone's) using the pseudonym "Satoshi Nakamoto" published a paper outlining the bitcoin protocol. Nakamoto defined bitcoin as a chain of digital signatures with rules for ownership transfer between parties and a mechanism for exchange to prevent double-spending.
One of the remarkable things about bitcoin is how easy it is to create new units of value – bitcoins – while also preventing counterfeiting. Bitcoin works without a central authority: each network node stores and forwards transactions to all other nodes on the network using Bitcoin's peer-to-peer file-sharing protocol.
Things To Consider In Bitcoin Trading
Bitcoin is a great way to send money to other people worldwide, and it's also a fun investment for many people. However, when you first start Bitcoin trading, there are some things you should know about how and where to invest in this popular cryptocurrency.
1) Understand The Basics Of Bitcoin Trading
Bitcoin is currently the most widely used digital currency, with more than 45 million transactions in the last year. Many companies accept it as payment, including Microsoft and Expedia—and of course, there's also Silk Road. You can buy bitcoins online or at physical locations, just like any other currency.
2) Find A Good Bitcoin Exchange To Buy From
There are many different places where you can buy Bitcoins. Kucoin is an excellent place to start if you want to meet with someone locally and buy BTC USDT or some bitcoins in person. In many cases, these exchanges will let you make bank transfers or even cash-in-hand transactions if you need anonymity.
Three Types Of Orders When Trading Bitcoin
When trading Bitcoin, you can use three major types of orders: market orders, limit orders, and stop orders.
1. Market Order: It's an order executed immediately at the current market price—no negotiation. The advantage of using this type of order is that there's no way to lose money with it—it guarantees that you'll always get the lowest price available. Market orders are instrumental when you're in a hurry or don't want to spend time thinking about the correct fee for a transaction.
Market orders are also suitable for people who don't want to spend too much time digging into technical analysis. If everyone else is buying frequently and driving up crypto prices today, then market orders ensure you take advantage of all opportunities by not participating at those higher prices.
2. Limit Orders: A limit order is an order to trade at a set price or better. For example, you could place a limit order to buy Bitcoin at $7,000. If the price of Bitcoin drops to $7,000 and someone else places an order to sell Bitcoin at $7,000 or better, your order will be fulfilled, and you will buy the Bitcoin.
On exchanges like Kucoin, Coinbase, GDAX, and Bitstamp, where users have access to limit orders, it's possible for more than one person to set a limit order to buy or sell at the same price. The first person who placed the limit order gets their order filled first. It's also possible for orders with the same price to be filled by the same person.
3. Stop Order: A stop order is an order to buy or sell a stock once the price surpasses a specified level, called the stop price. Once this price is reached, a stop order becomes a market order to get the best possible execution for your money.
For example, if you have Bitcoin in your wallet and believe its value will increase over time, you can set up a stop order to acquire it at a specific price. If this price is reached while you are asleep or away from your computer (and there is no one else to execute the order), it will become a market order and be filled at the prevailing rate.
