As digital technology continues to develop, Bitcoin has also become more advanced and other cryptocurrencies have skyrocketed. Bitcoin hit its all-time high in November 2021 at US$68,990. With its huge profit potential, more and more investors and traders have become interested in profiting from this asset. Experienced traders, large corporations, and beginners alike have started to buy this asset as one of their investment tools. Apart from the large profits, this development is also supported by the increasing number of services that have opened up opportunities for Bitcoin transactions. For example, PayPal has officially opened Bitcoin transaction services to its users.
As its popularity increases, Bitcoin is also moving forward and historically has a tendency to increase in value. However, it is understandable that beginner traders hesitate to enter the market because Bitcoin is very volatile and difficult to predict. But don’t worry, in this article Tokenomy will explain 4 easy ways to trade Bitcoin for beginners. Let’s see more below!
Four Steps to Start Trading Bitcoin
Trading is the act of buying and selling assets where someone will profit from the difference in the selling price of the asset. Basically, someone will buy an asset price when it is low or has the potential to increase in value in the future. This activity is very different from long-term investments, because a trader makes transactions when there are price fluctuations in the short term. If you want to trade Bitcoin, then you have to understand a few things first to avoid big losses, because Bitcoin prices tend to be unpredictable and fluctuate in a short period of time. These fluctuations can be an advantage or a disadvantage for a trader. To minimize the risk of loss, here are 4 ways to trade Bitcoin if you are a beginner.
Analyze Bitcoin price movements
The ability to analyze and predict Bitcoin market price movements is the main skill a trader needs to enter this field. This can be done by conducting fundamental and technical analysis. Fundamental analysis focuses on internal and external factors that can affect price movements. An example of an event that can affect the price of an asset is a halving day. There are other factors such as government policies, economic crises, and the influence of social media that can cause changes in Bitcoin price. On the other hand, technical analysis requires you to read price movement charts and predict how they will change in the future. Learn how to read candlesticks and the factors that can help you understand price charts. Make sure you’ve well-read on how to analyse price charts to avoid making hasty decisions and relying solely on intuition. Additionally, you can also use applications or software that can provide information on Bitcoin market movements. From there, you can draw conclusions about when to buy or sell Bitcoin in order to make a profit.
Understand the Risks
Each type of investment carries its own risks, and Bitcoin trading is no exception. The thing that will support the smooth running of your trading activities is to understand what risks you face and prepare to deal with them. One of the main risks that you should understand is the extremely high fluctuations in the value of Bitcoin. Bitcoin prices can go up and down in a short time, so make sure you already have a trading strategy that aligns with the analysis you have done. Follow this strategy and don’t make hasty decisions because of FOMO (fear of missing out). It is also important to invest with cold funds that are already on hand; that way, you will be better prepared to face the challenges of trading Bitcoin.
Set a Stop-Loss Order
The stop-loss feature is one of the most important trading features when it comes to highly volatile assets. You can find this feature on crypto trading platforms that were created to help users limit losses by liquidating an asset automatically after the market price has reached a predetermined value. Traders generally use this feature as a strategy at the beginning of a transaction to avoid the possibility of asset prices failing to move in the predicted direction. With that, you will avoid losses that exceed your tolerance limit because the asset will be liquidated automatically before the price drops drastically. Almost all crypto platforms have this feature, so the next step you need to do is just choose the platform that is most convenient for you.
Choose a Trusted Trading Platform
There are quite a number of irresponsible people using crypto as a cover for fraud on the internet. Thus, you must choose a platform that has guaranteed security and legality to avoid fraud. Choosing a beginner-friendly platform can also be beneficial for people who have just dipped their toes into crypto trading. Tokenomy is one of the safest trusted choices because it is officially regulated by the Financial Services and Security Act 2010 (LFSSA) issued by the Malaysian International Business and Financial Center (IBFC). In addition, the features on the Tokenomy platform are also very user-friendly. One of the most helpful features for beginners is the demo account, where you can practice with virtual money before actually trading with real capital. That way, you can practice your analytical and strategy skills first to be better prepared to trade for real. While practicing, you can also make long-term Bitcoin investments on Tokenomy using a deposit or staking options. The registration process is also very easy — all you have to do is register and go through the identity verification process so you can start investing right away. What are you waiting for? Register and start investing on Tokenomy!