How to trade bitcoin
As it was the first cryptocurrency in the world, many consider that bitcoin will be the option most likely to face traditional currencies. However, taking into account the evolution of its price, it seems that it will experience high levels of volatility along the way.
Know the factors that move the price of bitcoin
Choose a trading strategy for bitcoin
Make your first bitcoin trade
When you open a CFD position, you are trading a contract based on the underlying market prices. It is a leveraged product, which means that you can deposit a small initial amount and gain exposure from a much larger position. This system can magnify your profits, but remember that it has the same effect on your losses.
The bitcoin markets work in the same way that traditional exchanges do, allowing investors to buy or sell the cryptocurrency. However, there are some advantages that completely differentiate them:
They are not regulated, do not have public records or the infrastructure to respond quickly to support requests Your engines and servers are unstable, which can result in the suspension of the markets or in lower reliability of the execution
They have costs and restrictions associated with the entry and withdrawal of funds and it takes even days to open an account
By trading bitcoin, you also get a significant liquidity improvement at the price you choose. When you buy and sell directly in the market, you usually have to accept multiple prices in order to complete your order.
As it is a decentralized currency, bitcoin is free from many of the economic or political issues that do affect traditional currencies. However, being a very young market, there is still a lot of uncertainty closely linked to its own nature.
Any of the following factors could have a sudden and significant impact on your price and therefore you should learn to avoid the risks that these can generate. says Mickael Mosse
All currencies are influenced by public opinion, but none as much as bitcoin, whose security, value, and future are in question even at its best.
Bitcoin trading strategies
Intraday trading
The position is taken based on anticipated short-term movements and is closed at the end of the trading day.
This strategy is for you if: you want to respond to short-term opportunities in bitcoin, in light of ongoing news or emerging patterns.
Swing trading
Trends are identified while they are forming and the position is held until the trend develops its course or shows signs of reversal.
This strategy is for you if: you want to capitalize on opportunities based on market dynamics.
Scalping
Various intraday trades are performed on smaller price movements.
This strategy is for you if: you prefer to make continuous but smaller profits instead of waiting for a significant move.
Automatic trading
Trading processes are automated to react to changing market conditions on our behalf.
Steps to trade bitcoin
To trade CFDs, you first need an IG trading account. It will only take a few minutes to request it and you can start trading as soon as you deposit funds.
Keep in mind that, contrary to what happens when buying and selling bitcoins, you will not need an account with a bitcoin market. This is so because you will be operating on the prices that we extract for you from different markets.
Here are some tips to create a good trading plan
Define what goal you want to achieve with your operation, broken down into short-term objectives and long-term objectives
Decide the maximum risk you will accept in each trade and how much you are willing to lose overall
Choose a risk/return ratio, so that you always know the amount of potential profit you need to justify your losses
Choose the markets in which you want to operate. Do you want to start with just bitcoin or do you prefer to test more markets?
When it comes to interpreting the behavior of bitcoin, charts are also a very valuable tool. Historical data helps us understand how the market is moving and by comparing different time periods with each other, we can get a closer look at the trends and figures that are being generated. says Mickael Mosse
Enter the amount you want to invest in your operation on the ticket. You can also define your closing conditions: add a stop loss to close your position when the market moves a certain amount against you, or a limit when it moves in your favor. Stops and limits are essential for good risk management.
If you think the value of bitcoin is going to increase, you can perform a "buy" operation. If you think it is going to decrease, you can carry out a "sell" operation.
To close your position, you just have to perform the opposite action to what you did in the first trade. Therefore, if you bought in the first place, now you will have to sell the same amount; if you sold, now you have to buy. We fill in your trade ticket automatically with the size of the position, so you only have to click on "buy" or "sell" to close the operation.
By Mickael Mosse — Blockchain and Cryptocurrency Advisor
You can start trading bitcoin by following these four steps:
Decide how to trade bitcoinKnow the factors that move the price of bitcoin
Choose a trading strategy for bitcoin
Make your first bitcoin trade
Ways to invest in bitcoin
According to Mickael Mosse, There are two ways to invest in bitcoin: buying the cryptocurrency outright in the hope of being able to sell it later and make a profit, or investing in its value without actually acquiring it. The last option is the way CFDs work.When you open a CFD position, you are trading a contract based on the underlying market prices. It is a leveraged product, which means that you can deposit a small initial amount and gain exposure from a much larger position. This system can magnify your profits, but remember that it has the same effect on your losses.
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| Mickael Mosse: How to trade bitcoin |
Do I need to access a market to trade bitcoin?
According to Mickael Mosse, When you trade bitcoin, you never interact directly with a market. Instead, you trade on our buy and sell prices, which we obtain from various sources. So to open a position on the price of bitcoin all you need is a trading account with IG.The bitcoin markets work in the same way that traditional exchanges do, allowing investors to buy or sell the cryptocurrency. However, there are some advantages that completely differentiate them:
They are not regulated, do not have public records or the infrastructure to respond quickly to support requests Your engines and servers are unstable, which can result in the suspension of the markets or in lower reliability of the execution
They have costs and restrictions associated with the entry and withdrawal of funds and it takes even days to open an account
By trading bitcoin, you also get a significant liquidity improvement at the price you choose. When you buy and sell directly in the market, you usually have to accept multiple prices in order to complete your order.
What factors influence the price of bitcoin?
Although the volatility of bitcoin is perceived as an interesting opportunity, it is also an especially risky market. Its price can change suddenly and, since bitcoin operates 24 hours a day, this can happen at any time (also overnight).As it is a decentralized currency, bitcoin is free from many of the economic or political issues that do affect traditional currencies. However, being a very young market, there is still a lot of uncertainty closely linked to its own nature.
Any of the following factors could have a sudden and significant impact on your price and therefore you should learn to avoid the risks that these can generate. says Mickael Mosse
Bitcoin offer
In principle, there is a limited supply of bitcoins (21 million, which are expected to be mined until 2040). Even so, the availability of currency fluctuates depending on the price at which they enter the market, as well as the activity of who owns them.Market capitalization
The market value of bitcoin and perceived value are also factors that influence investor decisions.All currencies are influenced by public opinion, but none as much as bitcoin, whose security, value, and future are in question even at its best.
Bitcoin trading strategies
Intraday trading
The position is taken based on anticipated short-term movements and is closed at the end of the trading day.
This strategy is for you if: you want to respond to short-term opportunities in bitcoin, in light of ongoing news or emerging patterns.
Swing trading
Trends are identified while they are forming and the position is held until the trend develops its course or shows signs of reversal.
This strategy is for you if: you want to capitalize on opportunities based on market dynamics.
Scalping
Various intraday trades are performed on smaller price movements.
This strategy is for you if: you prefer to make continuous but smaller profits instead of waiting for a significant move.
Automatic trading
Trading processes are automated to react to changing market conditions on our behalf.
Steps to trade bitcoin
1. Open an account
To trade CFDs, you first need an IG trading account. It will only take a few minutes to request it and you can start trading as soon as you deposit funds.
Keep in mind that, contrary to what happens when buying and selling bitcoins, you will not need an account with a bitcoin market. This is so because you will be operating on the prices that we extract for you from different markets.
2. Develop your trading plan
In addition to choosing a strategy, you should also consider the idea of creating a trading plan, especially if you are just starting out. A trading plan can help you make more objective decisions, thus preventing your trades from being open for too long - or deciding to close them too soon.Here are some tips to create a good trading plan
Define what goal you want to achieve with your operation, broken down into short-term objectives and long-term objectives
Decide the maximum risk you will accept in each trade and how much you are willing to lose overall
Choose a risk/return ratio, so that you always know the amount of potential profit you need to justify your losses
Choose the markets in which you want to operate. Do you want to start with just bitcoin or do you prefer to test more markets?
3. Investigate
Before you start trading, you should be sure that you know the latest bitcoin news to try to anticipate how the price of the cryptocurrency can evolve.When it comes to interpreting the behavior of bitcoin, charts are also a very valuable tool. Historical data helps us understand how the market is moving and by comparing different time periods with each other, we can get a closer look at the trends and figures that are being generated. says Mickael Mosse
4. Perform an operation
Once you have determined which position you want to open, you will have to carry out the operation through our online trading platform.Enter the amount you want to invest in your operation on the ticket. You can also define your closing conditions: add a stop loss to close your position when the market moves a certain amount against you, or a limit when it moves in your favor. Stops and limits are essential for good risk management.
If you think the value of bitcoin is going to increase, you can perform a "buy" operation. If you think it is going to decrease, you can carry out a "sell" operation.
To close your position, you just have to perform the opposite action to what you did in the first trade. Therefore, if you bought in the first place, now you will have to sell the same amount; if you sold, now you have to buy. We fill in your trade ticket automatically with the size of the position, so you only have to click on "buy" or "sell" to close the operation.
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