Bitcoin is the leader among cryptocurrencies, which confidently occupies more than 50% of the market for 2022. Many users decide to trade this token in order to make a profit.
In the article, let’s look at the basics of trading, explore what points can greatly affect the price of a cryptocurrency, and what strategies beginners should pay attention to get good results.
So, bitcoin trading is the process of purchasing a token at a critically low price and selling it at the highest possible one. Unlike investments, when the user wants to hold the crypto for a long period, trading requires much more time for analytics — customers should carefully study charts and forecast price movements in the short term.
- To regularly earn on exchange rate fluctuations, customers have to:
- Register on a reliable exchange.
- Pass verification by granting the platform with documents confirming the identity of the future trader.
- Replenish the account with available payment methods.
- Open the first position.
That’s all! However, in order to succeed in this area, users should be aware of various details, including the parameters that can substantially change the price of the token.
What Can Predetermine the Price?
If customers are going to put in serious money in such a sphere, then they have to constantly monitor the nuances that can potentially change the general BTC’s price. For instance:
- Supply: at the moment, there are approximately 21 million BTC, and if demand grows, the price of coins will increase
- Negative news: any bad news in the press concerning the security or stability of this crypto can affect the price
- the degree of integration of BTC into modern payment systems (now, more and more online stores and platforms accept payments in this cryptocurrency, so it will likely affect demand).
And the strongest factor influencing the effectiveness of trading includes world events. Any things like critical changes in the legislation of the world’s leading countries or some macroeconomic changes can lower or increase the price of BTC tokens.
Explore Three Working Strategies
They’re also time- and user-tested strategies that guarantee greater success than any intuitive actions:
- Day trading: This tactic means that the user should open and close the option within 1 day. The main advantage is that there is no need to pay nightly commissions, as well as the ability to effectively use the daily volatility of BTC.
- Trend trading: It means speculation on the prices of cryptocurrencies along with the current trend. You`ve probably already heard the terms “bullish” or “bearish” market, so in the first case, it is worth going long, and in the second — going short.
- Hedging trading: It’s a tactic that allows you to reduce risks by opening two opposite positions. This method works great if the user has suspicions that the market will change direction.
Any of the suggested options will be useful for a beginner. Of course, there is also a HODL tactic, but it only makes sense if you want to leave some of the tokens for storage.