A great way for you to earn money is by trading Bitcoin as it holds a lot of advantages over traditional markets. Trading this digital currency has become widespread because you can start with almost any amount of money, there is minimal red tape and high frequency algorithms don’t dominate this market. Those who are new to trading Bitcoin need to follow a proper process to begin. The first thing is to buy some Bitcoin as owning it provides you the flexibility of trading it on various exchanges as it is easier to send than fiat currency. Depending on your needs, there are several ways you can get Bitcoin.
One way is to purchase them off the spot market by sending money to an exchange. While it takes a couple of days for the bank transfer to happen, you can get the best possible price. There is also the option of buying it locally from someone, but they are probably going to charge a 5 to 10% premium. Once you have obtained Bitcoin, you are ready to begin trading this cryptocurrency. There are different ways you can go about it, depending on your trading style and market conditions as well.
Some of the best ways to trade Bitcoin for making money are:
This kind of trading involves closing your position when a trading day comes to an end. As opposed to the stock market, Bitcoin trading is round the clock, which means that this sort of trading is not very common. The right type of market conditions are needed for day trading and they are quite volatile.
This particular strategy consists of taking smaller trades frequently at a risk to reward ratio of 1:1. You can earn large gains by making several small successful gains. However, you need to manage your risk because a single loss can end up wiping out several wins. This kind of trading is usually considered best when done with algorithms.
In this strategy for trading Bitcoin, you are basically able to make a profit due to the discrepancies that occur in its price across multiple exchanges. Since there is no official exchange that can determine the currency’s official price, it is possible for investors to buy it for low on one exchange and then sell it for higher on another one. Bitcoin arbitrage usually works best in volatile conditions and situations. Sending Bitcoins between exchanges is much quicker than sending fiat currencies. See this guide in this regard.
When you hold your position for longer than a day, it is referred to as swing trading. This trading strategy for Bitcoin is known to give great results when markets are trending. If the trends are strong, the digital currency will gain or lose hundreds of dollars within a few weeks. One rule for this kind of trading is to ride a particular trend until it reverses. Whether the trend is bearish or bullish, you can still make a profit by trading.