Table of Contents
What is Trading?
In simple terms, trading means exchanging one item for another. We encounter trading in our everyday life, knowingly or unknowingly e.g. when we buy items from the store we basically trade items in exchange for money. So what is Bitcoin and How to make money trading Bitcoin?
Similarly, in the financial market, the concept of trading works based on the very basic idea of economics, Demand & Supply e.g. In recent days, due to the effect of corona pandemic prices of some items have increased exponentially e.g. Tissue rolls for Kitchen and Restrooms. Because the demands have increased, big box retails stores are not able to fulfill the demands of the customers. So when Demand exceeds supply, price tends to go up and when supply exceeds demand price tends to go down.
In the case of stock market trading, the value of shares of companies fluctuates due to various reasons. So traders buy shares at a low price and try to sell it when it goes higher because of market conditions, thereby making money.
For a long period of time, the concept of trading was only happening within a small territory which was banks and financial institutions. Common men were not able to access this facility. After the introduction of superfast internet and brokerage web applications, anybody can access to do online trading sitting at home.
In this article, we will discuss how to make money trading bitcoin.
Learn how to trade Bitcoin?
Bitcoin is the first decentralized cryptocurrency invented by a person or a group of person name Satoshi Nakamoto, in the year 2009. If you want to know more about What is the technology behind Bitcoin ( Blockchain ) and the architecture in detail, please follow my link HERE.
Bitcoin Trading is a new dimension in currency trading. This is basically buying and selling bitcoin as a digital currency at a lower price and selling at a higher price. Because of the Volatility in Bitcoin trading, the expectancy of profit is very high. The popularity of Bitcoin is growing every day and more and more people are interested to know ” How to make money trading Bitcoin “
Buying bitcoin at a low price means buying a higher amount of bitcoin at a lower amount of money, and selling bitcoin at a higher price means receiving a higher amount of money against a lower amount of bitcoin.
Bitcoin trading happens at 24/7 basis across the globe.
Let’s discuss the price of bitcoin. How it is determined? The price of bitcoin is usually determined by the amount of bid. It means that the maximum price you are ready to pay for bitcoin on that day and it is determined by the global exchange system. Similarly, the asking price is determined by the minimum price to accept for selling bitcoin on that particular day.
Because of its decentralized underlying blockchain technology, bitcoin is not controlled by any Central Bank and the transaction is completely independent of the Cryptocurrency system.
Strategies for Bitcoin
- Day Trading
- Swing Trading
- Scalping
- Automated Trading
For more detailed information on the above topics, follow the link here.
What is a Bitcoin Wallet?
Bitcoin Wallet gives Bitcoin users the flexibility to own and contain bitcoin currency in a special Bitcoin storage system. It is a software to store Bitcoins. The accessibility of the Bitcoin wallet is controlled by a secret number also called private key that refers to the Bitcoin Wallet address. There are four types of bitcoin wallet
- Desktop
- Mobile
- Web
- Hardware
Purchasing Bitcoins with credit card
Recently it was announced that bitcoin can be bought using Credit / Debit cards. Implementation of this functionality is a milestone achieved for sending and receive Bitcoin currency in Bitcoin Wallet. This milestone has been achieved in partnership with Moonpay, a fiat-crypto payment provider. Monday is already equipped with bitcoin wallet ( BTC ).
Advantages of Bitcoin Trading?
There are plenty of advantages to using bitcoin.
- You can do Bitcoin trading from anywhere in the world. You just need a laptop with an internet connection and some extra income which you can invest in Bitcoin trading.
- Because of its volatility Bitcoin is trading is most of the time very beneficial. If you buy bitcoin at a very lower price and able to sell at a higher price, the profit is very high.
- Bitcoin is trading more secure than traditional currency trading as it is not controlled by any central authority. So there are no extra transaction fees and it works 24/7. In the traditional banking system, if the system gets corrupt or hackers hack into the system, the whole system needs to compromise. In the case of bitcoin, there are thousands and even a million computers in the network, so even if one system gets hanged/ corrupt, other computers are there to support.
- Another interesting thing is the unit of Bitcoins to buy. As a bitcoin trader, you don’t need to buy one bitcoin. One bitcoin can be divided into 100 million parts and each fraction is called a “satoshi”. One satoshi looks like 0.000000BTC.
Drawbacks of Bitcoin Trading?
- Bitcoin trading comes with the common risk factors involved in trading. This is a comparatively younger and volatile trading platform. So if you don’t have enough ideas about trading or stock marketing, please study the well or get some help from a financial advisor. The way Bitcoin value fluctuates, there is a high chance that you may encounter loss if you are not aware.