Bitcoin is a cryptocurrency that is well-known across the world. It is one of the pioneer cryptos that was appreciated by many people from all over. Apart from Bitcoin being popular, it is also a cryptocurrency that is very volatile. Bitcoin trade is a trade that involves speculation on price movement. Some traders buy cryptocurrencies from exchanges hoping that the price will go up and some traders buy a cryptocurrency and use derivatives to speculate on the falling and the rising value of the crypto. This is one of the ways through which people make the most out of Bitcoin volatility. For you to successfully trade bitcoins through bitcoin trader software, there are important steps that you should consider following. Here are some of the most important steps
Learning things that moves the price of bitcoins:
If you wish to trade bitcoins, the first important thing to do is learning what moves the price of bitcoins. It is only by understanding the factors that affect the price of bitcoins that you will know the best strategies to trade. Here are some of them
The first factor that can affect the price of bitcoins when you are trading is the supply factor. As of now, the supply of bitcoin is estimated to be over 21M. When you have a finite supply of bitcoins, that simply means that the price is most likely to increase in the following years especially when the demand is high.
The bad press
This is also another factor that influences the price of bitcoins. Bitcoin is a digital currency and what the press says about it will shape how people will trade. If what the press says is negative, there will also be a negative impact on the industry.
The integration of bitcoin will also shape the price of the coin. It is always important to know that bitcoin’s profile will always depend on how it has integrated with payment systems, especially those that are new. If integration is successful, the price of bitcoin is likely to go up but when the opposite happens, the price will be lower.
There are also key events that can shape the price of bitcoins. Things such as security, regulations, and macroeconomic announcements can also have an impact on the price of bitcoins in bitcoin trader software.
Also see: Is investing in cryptos worth it?
Bitcoin trading strategies and styles
If you want to trade bitcoins successfully, the next important thing to do is making sure that you have a trading strategy and a suitable style. When trading bitcoins, you can choose day trading, trend trading, bitcoin hedging, and finally HODL.
Day trading is the first way to trade bitcoins. In this type of trading, you will have to open your trade and close the trade within one day. By doing this, you will not have any coin market exposure during the night. People who use this means of trade avoid overnight funding charges on their position. If you are looking forward to benefiting from bitcoin’s term price, this is the best trading method to consider or settle for.
This is the second method of trading. Bitcoin trending is simply taking a position that goes hand in hand with the current trend. If you wish to go short, you should make sure that the market is bearish and when you want to go long, check and make sure that the market is bullish. If the trend starts to slow down or even reverse, consider closing your trading position.
The next way to trade is through hedging. Hedging of bitcoins simply means mitigating any exposure to possible risks. You can achieve this by taking an opposition trading position to the one that you already have. If the market is moving against you, this is what you should consider doing.
Choosing your bitcoin exposure
To trade bitcoin successfully, you will have to consider how you would want to get exposure to bitcoin through bitcoin trader software. There are different ways through which one can get exposure to bitcoins. The first way is through trading bitcoin derivatives, the second we have the buying of bitcoins through a bitcoin exchange and lastly, we have the crypto 10 index.