Have you ever thought of trading in bitcoin and do not know where to start? Then this guide is for you. In this guide, we will explain the basics of bitcoin trading and understand the ways to read market trends.
Trading in bitcoin is the same; you buy when the price is low and sell when the price is high. You can also invest in bitcoin and then wait for its price to get high. Investing is not a good option as it is a long process. Moreover, you need to study the market to see any price movement to get some profit. To be successful as a Bitcoin trader, you need to put a lot of money, time and effort, help is at hand from https://bitcoin.io
Types of Trading
As a trader, you need to earn profit from your trading. Well, there are many ways to do it. First, we will review some of the popular trading types:
Scalping
This type of trading is for the short-term, it can help you make a small profit on small price changes. Its main idea is to make small profits which limits the risk. There are many bitcoin trader app and websites which you can use for scalping. You can make thousands of trades each day.
Day Trading
In this type, a trader tries to make a profit for short-term price movements. Day traders spend the whole day on their computers and close them at the end of the day.
Swing Trading
This type requires a lot of time and study to take advantage of the swing of the price cycles. A trader spots the beginning of a price movement and then start trade. He holds until the price changes and takes profit from it. In this type of trade, a trader does not need to sit in front of a computer.
Can Someone Predict Price Movement?
Well, it is not possible to predict the price of bitcoin or any other cryptocurrency. To do trading, some methods, patterns, and rules allow a trader to make some profit. It is not possible to get a profit from all of your trades. You will lose in one trade and will make a profit in another. Your main purpose should be to see a positive balance in your bitcoin trader app at the end of the day. There are two main methods to analyze bitcoin which are as follows:
Fundamental Analysis
In this methodology, a trader tries to predict the price of bitcoin by analyzing the technical development on bitcoin, News on the cryptocurrency, and any other news that can affect the bitcoin. The analysis will help it to predict any change in the price. For example, if a country (A big country like China, USA, etc.) decides to ban bitcoin then it will result in a drop in price.
Technical Analysis
On the other hand, technical analysis relies on studying the market statistics. You need to predict the price change by studying past price changes and trade volumes. This means a trader will try to find a trend and pattern in price changes based on its technical analysis.