Trading currency takes knowledge and experience, especially when you are dealing with a relatively new concept such as cryptocurrency. There are numerous strategies you can implement, but if you have some Bitcoin in your account that you want to trade, here is how you can do it.
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1. Choose your platform
Generally, there are two types of platforms you can choose to trade Bitcoin. The first one is an online broker, where you can sell Bitcoin when the price increases and buy it when the price is low. The second one is a derivative exchange, where you can trade Bitcoin directly with other users. Exchange platforms are the preferred trading method for users with little cryptocurrency experience, although you can also start with brokers you can trust. You’ll need to create an account on the platform of your choice and verify your identity.
Read more: Steps To Starting Cryptocurrency Business In Nigeria
2. Analyze the data
When you are trading Bitcoin, you need to always monitor the changes in the market and tailor your strategy accordingly. There are two types of analysis involved in the process of trading. The first one is fundamental analysis, which you can do through the news in credible sources. The second one is technical analysis, where you analyze the technical indicators in the cryptocurrency market. You can also use mathematical formulas to help you make decisions.
3. Pick your strategy
As a novice Bitcoin trader, you can choose from a variety of strategies or even combine several of them to help you achieve the ultimate goal: make a profit with your trading. Currently, the most popular Bitcoin trading strategies include:
- Day trading, where you make multiple transactions throughout the day and start again the next day.
- Swing trading, which is similar to day trading but only requires you to act one or several times a week.
- Scalping, which works similarly to day trading but in even smaller time frames with very little profit.
- Hedging, which allows you to protect yourself from big losses by selling Bitcoin if it falls below a certain level.
- Hodling, where you hold on to your Bitcoin and only sell it when there is a significant price increase.
Read more: How To Trade Bitcoin In Nigeria
4. Create and execute your order
Once you know your strategy and are convinced that the market will go a certain way, you can create your first order. Decide whether you want to buy or to sell, take care of your risks and possible losses, and select the amount you want to trade. Review every detail once again and confirm your decision to set the trade live.
5. Close your trade
After the order reaches the desired conclusion, you will need to close it. With some platforms and order types, they close automatically. However, you will still need to review the details to see whether the order went as you expected it to go. Ideally, your order should end in a profit for you, but that’s not always the case. Continue analyzing the data and studying to become a successful Bitcoin trader and getting more orders to close in your favour!
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