One good thing about trading online is that you can do it full time and make a career out of it or simply look at it as a way to generate extra income. Regardless, of all possibilities such as currency, forex, commodities and stocks, you will find cryptocurrencies a better alternative. The underlying principles are almost the same but there is wide fluctuation in crypto values, especially that of bitcoin. You have an opportunity to make windfall profits at least once or twice in a year. This is of course, dependent on the right bitcoin trading platform for which paxful is as good as it gets as can be seen in the paxful review.
Bitcoin, Litecoin or Ethereum?
There are over 200 cryptocurrencies to pick from if you have decided on crypto trading. However, at the top you have Bitcoin and then Ethereum and Litecoin. Bitcoin should be your pick. It is the highest in value and can be traded in fractions. It also sees the highest fluctuations in price and brokers predict it could go up to $ 100,000 from its current $ 1000 level.
Litecoin market price is in the region of $ 70 and market capitalization is $ 4,528,071,047 with a market rank of 7. The all time high was # 375 while alltime low was$ 1.11. This means fluctuations are low and value realization is limited.
Ethereum has market capitalization of $ 20,533,980,530, ranks at No. 2 and there is no limit on supply. The all time high is $ 1432 and all time low is $ 0.420. Fluctuation may be high so you can pick this to trade.
However, they cannot compare to Bitcoin. You have highest fluctuation pointing to possibility of higher profits. Before you get started, keep this tips in mind and pick the right broker for which you can read the paxful review.
Learn about trading strategies
Bitcoin traders follow a variety of trading strategies such as HODLing, Hedging, trend trading and breakout trading. Confused? You might as well be but it pays to read up on these strategies. In brief:
- HODLing: This means buy in bits and pieces and hold on until there is an appreciable value difference. Then sell. However, there is risk should rice dip below your purchase price.
- Hedging: This means playing it safe by being on both sides of the fence: buying and selling to minimize loss. This is done through contracts for difference (CFD). You do not have to own Bitcoin.
- Trend: Follow the trend is the key to making profit. For this there must be consistency in price movement. If price is rising you keep buying in small increments, keeping careful watch on price graph. If graph starts a negative trend then you wait and watch a little and if this goes consistently down, it is time to book profits.
- Breakout: this is connected to trend and involves your keeping close watch on markets and charts. If it forms a breakout pattern you can recognize then it signals volatility and you can buy in lot, hold until breakout subsides and reverses at which point you book profits.
- Day trade: You can buy or sell at the start of a day’s trading session. At the close of trading your account is squared up and you get loss or profit depending on price movement. You have to be alert all the while if you adopt this method.
All this is not learnt in a day. For beginners it is best to follow the HODLing strategy. Meanwhile, you can learn about technical analysis and charts in order to be able to predict movements and be ready. Some brokers may offer charts and some may not but you can create your own or look at third party charts. In any case, how much profit you make also depends on the broker and their fees for which it is worth looking at paxful review. Some brokers offer leverage. Understand what it means and use it to maximum advantage for buying and selling since you need to deposit only a low amount but you can trade in multiples of that amount. This carries a risk should you be on the losing side.
Tips for beginners
Do not dive into the world of trading right away. Simply find a Bitcoin broker for which you can read the paxful review. Buy in small increments, hold and continue. Meanwhile, engage in imaginary trades every day or every week even as you study charts and gain market knowledge. Just how accurate is your gameplay? If you are making the right decisions then you can start to trade but do it on a small scale.
- Stick to only one strategy such as hold, to begin with.
- Look for developing trends and breakout patterns you can identify using your skills. If you can, it is time to step up to buy/sell transactions.
- In any case have a risk management policy to minimize loss. Always aim to trade for profits, even though they are small.
Price fluctuations are influenced by a variety of external factors.
- Supply influences price as does demand. Bitcoin supply cap is 21 million while demand surges. Translated, it means price will rise but there are other factors that might impinge.
- Government policies and regulations could change. Keep watch.
- Political considerations have an impact.
- Weather, climate and natural disasters also have an effect on trading market
In order to succeed you have to keep track of everything and anything that can affect market movements so stay awake.
Find the right brokers you can trust and one who offers a fair deal besides facilities such as leverage and fiat currency. You can get a good idea about what to look for through the paxful review. Read up about bitcoin and its history before you start. Then open an account and get started on an exciting journey.