Successful Bitcoin trading requires some preliminary research for the user to get acquainted with the essential information about this topic. Newcomers should pay attention to all the details about cryptocurrencies, as they usually tend to make a lot of mistakes at the beginning of their careers.
We have prepared this article to tell you about how to learn Bitcoin trading, what is this, what are the basics in short. Let us begin.
Where to trade Bitcoin?
At the moment, you are reading this article on the official website of Dowmarkets. This is a place where you can trade cryptocurrencies, commodities, stocks, bonds, and forex. To start trading, you only need to register and top-up your account.
Here you can also join Dowmarketss trading school or use the educational materials that are offered for free.
How to learn Bitcoin trading?
There are different ways to learn Bitcoin trading. We shall have a look at some of the most critical ideas..
Read books about Bitcoin trading.
It is always useful to read books. Primarily if they are related to the topic which you want to know about. Crypto books have information about the cryptocurrencies; overall, the ways they work, how to invest, and trade with them. Here are some excellent books to read:
- “Bitcoin From Beginner To Expert” by Christian Newman;
- “Cryptoassets: The Innovative Investor’s Guide to Bitcoin and Beyond” by Chris Burniske and Jack Tatar;
- “Cryptocurrency Trading and Investing: Beginners Guide to Trading and Investing in Bitcoin, Altcoins, and ICOs” by Aimee Vo.
These books will give you a lot of useful information and give you a better understanding of Blockchain and cryptocurrencies overall.
- Watch online lessons.
If you’re having a hard time reading, try watching YouTube videos about trading Bitcoin. We won’t recommend any specific channels, but keep in mind that you should always make sure that you are listening to a professional.
- Practice in trading simulators.
There are Bitcoin trading simulators available on the Web for free. Most of them offer their users to try to guess the way the graphic will go, add competitive details such as leaderboards, and some games even have real rewards. It all depends on the website you use. They are good to start with, especially if they have instruments similar to those that are used by real trading software.
- Practice with small sums.
When you practice trading with real money, you value it more and are completely involved in the process as you do not want to lose your funds. Even if it is a $10 deposit, make a strategy before you start, think about what do you want to achieve. For example, you can set a goal to double your deposit. It all depends only on you.
Make sure to have a plan. If you don’t, trading turns into gambling.
Types of orders
There are two main types of rules when trading Bitcoin.
- An immediate order.
- A limit order.
In the first case, the order is fulfilled at once at any possible price. The user sets the number of coins he wishes to buy or sell, and the exchange conducts it at once. A lot depends on what software do you use.
For example, on most exchanges, when you set an order, the system searches for the lowest price possible. Let us say you are going to buy 10 BTC. Seven coins will be at one estimate, and the three others can have a higher price. It all depends on the sellers that have placed a sell-order. Here the main drawback is that you can’t be sure about the sum you will have to pay in the end.
A limit order, however, allows you to set a specific price that you are willing to pay or want to receive for your coins. If you placed an order to buy 10 BTC for $10,000 each, it is quite possible that you will own eight coins at once and will have to wait for two more BTC until someone is willing to sell their coins at that price. The order will be completely fulfilled only when the price reaches the sum that you have indicated.
Stop-loss and take-profit
These are two primary tools that are usually used by traders that are not very active on the market.
Stop-loss prevents you from losing too much money if the price drops. You can set this criterion yourself. The system will sell you BTC as only the lowest allowed mark is reached.
Take-profit is similar to stop-loss. The only difference is that it sells your coins as only a specific profitable price is reached. You set the price yourself. It’s great when you have no time to monitor the market or have a strategy for an upcoming trend.
We hope this article was useful to you. If you have any other questions left, contact your analyst for more information