What is Bitcoin Trade and how is it done?
Bitcoin trade like every other trade is a lucrative but risky one.
Bitcoin is undoubtedly the most widely recognized cryptocurrency in the world and its popularity has made it seem like the only cryptocurrency . However Bitcoin is only but one of the cryptocurrencies in addition to many others in existence.
Often times people question the safety of trading bitcoin , the best way and company to trade with and how the trading is done. It should be noted that much as trading bitcoin is a safe process, it is safer when the trader uses CFD. This enables the bitcoin trader to put stop losses or open short position, to avoid loosing all funds.
Bitcoin trading is simply the art of buying low and selling high. That is to say, the act of buying Bitcoin at a low price and selling at a high price.
Bitcoin trading is different from Bitcoin investment. Bitcoin trading simply means predicting the movement of the price/graph over a short period of time. Thus the trader buys at a low price , and sell at a higher price over a short period of time. While bitcoin investment mean buying the bitcoin and holding it for a long time tom sell when the value must have appreciated.
Thus the investor buy bitcoin to hold it for a long period of time while traders buy to sell within a short period of time. Thus, two ways of making money through cryptocurrency is either by trading or investment.
There are different types of bitcoin trading. Namely; day trading, scalping and swing trading.
In Day trading, the trader simply conduct several trading in a day , trying to profit from short term price movement. This can be positive or negative. Scalping measures on trading on extreme short term trading, making so many tradings per day and believing in making very little profits from each. A scalper can conduct hundreds of trades in a day. The belief of every scalper is that it is better to many little profit than to incur a loss.
Swing trader on the other hand tries to see a bigger picture. they place trade for sometimes a week or even month, trying to get their desired result. Swing trader tries to concentrate and take advantage of the natural price swing cycle.
Most times people come up with questions as to whether it is safe to trade bitcoin or not. The simple answer is that it is neither safe nor totally unsafe. it is more like predicting the movement of something uncertain. Trading bitcoin can be favorable and unfavorable at all. It is more like gambling. That is why every trader must use CFD in other to put stop losses or open short position, to avoid loosing all funds.
It is also of fundamental importance to carefully study the movement of the price before placing a trade. It should be noted that the legality or otherwise of bitcoin trade is dependent on the jurisdiction(country). While some countries have legalized the use of bitcoin and its trade, some countries placed restrictions or ban on it . Thus, it is important to first get to research and understand the status or the provision of the law regarding Bitcoin in any country before trading on it. Finally, Bitcoin trading is a very lucrative one.