This post is a respond to fewer comments and mails Requesting to write a detailed post on how to do bitcoin trading.
Bitcoin trading can be extremely profitable for professionals or beginners. The market is increasing all around china, highly fragmented with huge spreads. Arbitrage and margin trading are widely available. We know that china today is hosting the world largest market; therefore, many people can make money by joining china’s number one business. (trading bitcoins).
Bitcoin’s history of bubbles and volatility has perhaps done more to bring in new users and investors than any other aspect of the crpytocurrency.
Each bitcoin’s price goes up or down it puts Bitcoin’s name in the news. The media attention has help it even more to become interested.
Each time Bitcoin’s price rises, new investors and speculators want their share of profits. Because Bitcoin is global and easy to send anywhere, and for me I will tell that trading bitcoin is one among the simple way you can make quick cash.
Interms of Comparison to other financial instruments, Bitcoin trading has very little barrier to entry. If you already own bitcoins, you can start trading almost instantly. In many cases, verification isn’t even required in order to trade.
If you are interested in trading Bitcoin then there are many online trading companies offering this product usually as a contract.
Reasons Trade Bitcoin?
Before we show you how to trade Bitcoin, it’s important to understand why Bitcoin trading is both exciting and unique.
Bitcoin Is Global
Bitcoin isn’t fiat currency, meaning its price isn’t directly related to the economy or policies of any single country. Throughout its history, Bitcoin’s price has reacted to a wide range of events, from China’s devaluation of the Yuan to Greek capital controls.
General economic uncertainty and panic has driven some of Bitcoin’s past price increases. Some claim, for example, that Cyprus’s capital controls brought attention to Bitcoin and caused the price to rise during the 2013 bubble.
Bitcoin Trades 24/7
Unlike stock markets, there are no official Bitcoin exchanges. Instead, there are hundreds of exchanges around the world that operate 24/7. Because there is no official Bitcoin exchange, there is also no
official Bitcoin price. This can create arbitrage opportunities, but most of the time exchanges stay within the same general price range.
Bitcoin is Volatile
Bitcoin is known for its rapid and frequent price movements. Looking at this daily chart from the CoinDesk BPI, it’s easy to spot multiple days with swings of 5% or more:
Find an Exchange
As mentioned earlier, there is no official Bitcoin exchange. Traders have many choices and should consider the following factors when deciding on an exchange:
Regulation & Trust – Is the exchange trustworthy? Could the exchange run away with customer funds? Don’t forget that these exchange platform are websites build by individuals and there is possibility that it might crash.
Location – If you must deposit fiat currency, and exchange that accepts payments from your country is required.
Fees – What percent of each trade is charged?
Liquidity – Large traders will need a Bitcoin exchange with high liquidity and good market depth.
Based on the factors above, the following exchanges dominate the Bitcoin exchange market:
Bitfinex – Bitfinex is the world’s #1 Bitcoin exchange in terms of USD trading volume, with about 25,000 BTC traded per day. Customers can trade with no verification if cryptocurrency is used as the deposit method.
Bitstamp – Bitstamp was founded in 2011 making it one of Bitcoin’s oldest exchanges. It’s currently the world’s second largest exchange based on USD volume, with a little under 10,000 BTC traded per day.
OKCoin – Bitcoin exchange based in China but trades in USD.
Coinbase – Coinbase Exchange was the first regulated Bitcoin exchange in the United States. With about 8,000 BTC traded daily, it’s the world’s 4th largest exchange based on USD volume.
Kraken – Kraken is the #1 exchange in terms of EUR trading volume at ~6,000 BTC per day. It’s currently a top-15 exchange in terms of USD volume.
and so many other exchange platforms here
Bitcoin Trading in China
Global Bitcoin trading data shows that a very large percent of the global price trading volume comes from China. It’s important to understand that the Chinese exchanges lead the market, while the exchanges above simply follow China’s lead.
The main reason China dominates Bitcoin trading is because financial regulations in China are less strict than in other countries. Therefore, Chinese exchanges can offer leverage, lending, and futures options that exchanges in other countries can’t. Additionally, Chinese exchanges charge no fees so bots are free to trade back and forth to create volume.
How to Trade Bitcoin
The process and basic principles remain the same across all exchanges.
First, create an account on Kraken by clicking the black sign up box in the right corner.
You’ll have to confirm your account via email. Once your account is confirmed and you’ve logged in, you must verify your personal information.
Bitcoin trading is exciting because of Bitcoin’s price movements, global nature, and 24/7 trading. It’s important, however, to understand the many risks that come with trading Bitcoin.
Leaving Money on an Exchange
Perhaps one of the most famous events in Bitcoin’s history is the collapse of Mt. Gox. In Bitcoin’s early days, Gox was the largest Bitcoin exchange and the easiest way to buy bitcoins. Traders from all over the world were happy to wire money to Mt. Gox’s Japanese bank account just to get their hands on some bitcoins.
Many users forgot one of the most important features of Bitcoin—controlling your own money—and left more than 800,000 bitcoins in Gox accounts. In February 2014, Gox halted withdrawals and customers were unable to withdrawal their funds. The company’s CEO claimed that the majority of bitcoins were lost due to a bug in the Bitcoin software.Traders still have not received any of their funds from Gox accounts.
Gox’s catastrophic collapse highlights the risk that any trader takes by leaving money on an exchange. Using a regulated Bitcoin exchange like Kraken can decrease your risk.
IS Your Capital is at Risk
Remember that as with any type of trading, your capital is at risk. New traders should start trading with small amounts or trade on paper to practice. Beginners should also learn Bitcoin trading strategies and understand market signals.
Bitcoin Trading Tools & Resources
Cryptowatch & Bitcoin Wisdom – Live price charts of all major Bitcoin exchanges.
Bitcoin Charts – More price charts to help you understand Bitcoin’s price history.
bitcoinmarkets – A Bitcoin trading sub-reddit. New users can ask questions and receive guidance on trading techniques and strategy.
TradingView – Trading community and a great resource for trading charts and ideas.
I hope this post will go a long way in supporting my friends in trading not only bitcoin, because not everyone can afford 10k$ for just one bitcoin, but start by trading smaller coins. My friends and I has made a lot of money by trading unknown coins against bitcoin. In other words the process is called mining. So instead of going to buy software for mining bitcoins we do it right here in the exchange.