Step-by-step guide about bitcoin trading

When Satoshi Nakamoto created bitcoin in 2009, nobody taught it would be a worthy coin, let alone being recognized and accepted as a means of transaction worldwide. Unfortunately, not everyone knows about bitcoin trading, even as they all love to have the digital coin. While some traders have made a fortune trading bitcoin, others have lost their hard-earned money. This takes us to the next part of this article, which is what is bitcoin trading?

What is bitcoin and how does it work?

Bitcoin is a digital currency created in 2009 by Satoshi Nakamoto, to facilitate online transactions . It was intended to eliminate intermediaries from financial transactions, decentralize transactions, lower fees, and enable users to send money anonymously. Bitcoin does not exist as real money; only its balances are kept in a public ledger.

Why does everyone want to have bitcoin in 2021? We are finally faced with the reality of life – bitcoin is now a globally recognized cryptocurrency, with individuals, governments, merchants, and financial institutions all jostling to have a piece of the pie. Bitcoin has evolved payment for goods and services online, payment of health bills, payment of tuition, storing assets, gambling, donations, and transfer of assets across borders.

How does btc work?

One question beginners always ask is, how does bitcoin work? Here is our simple explanation. Every bitcoin holder needs to create a bitcoin wallet by installing one on their desktop or mobile devices. Once you do that, you automatically get a bitcoin address with private and public keys.

You can access your wallet or check your balances with your private key. Your public key is shared with anybody you want to receive bitcoin from, but your private key is kept safe for yourself.

Main factors that influence bitcoin’s price

Bitcoin price is not rigid; it fluctuates from time to time, depending on certain factors, amongst others, market, political and regulatory developments.  Key factors that affect the price of bitcoin are:

• Demand and supply. Like in economics, the price of bitcoin is directly affected by demand and supply. Bitcoin miners get rewarded with bitcoin when they solve some complex mathematical puzzles. This increases bitcoin supply and water downs the price. However, when more investors demand bitcoin, scarcity hits, and the price goes up.
• Media influence. The media has a role to play in determining BTC price. When there are positive publications about the digital currency, it attracts more investors, and prices will rise. On the contrary, when there are negative publications about bitcoin, people develop skepticism, and the price tends to drop.
• Competition. Initially, bitcoin was the only cryptocurrency, and the price continued to rise because it had no competitors. But today, there are altcoins like Ethereum (ETH), Litecoin (LTC), Bitcoin Cash (BCH), EOS, Ripple (XRP), and the rest that serve as alternatives to bitcoin, thereby leading to a reduction in bitcoin price.
• Political events. Events in the political landscape can also affect the price of bitcoin. While adverse political events or news make investors lose confidence in their governments, they encourage them to invest more in bitcoin. This leads to an increase in the price of bitcoin.
• Regulatory developments. Bitcoin is not centralized nor directly under any regulatory institutions. Nevertheless, these regulatory institutions develop policies and guidelines to regulate the cryptocurrency market. Restrictive regulation may lead to cautious approach by investors towards cryptocurrency causing a decline in price and vice-versa with favourable regulatory developments on the cryptocurrency market.

Main bitcoin trading strategies

Bitcoin trading has the potential to make you rich if you do it the right way; at the same time, it can wipe out all your income if done wrongly. Here are few tips to help you avoid disaster while trading.

• Use a fraction of your money for trading at a time. No matter how much profit you think you can earn, you should never commit all your money to trade at a time. This will ensure you do not lose everything, should the trade outcome turns out unfavourable.
• Buy low and sell high. BTC markets are quite volatile; prices can rise and fall at any moment. Buy bitcoin when the prices are low and sell when prices become high.
• Develop a trading plan. Do not go into Bitcoin trading without a plan. Your plan, amongst others, should include the kind of profit you want to make, how much to use for each trade, how regular you would want to trade in the BTC markets (daily, weekly, or monthly), and how much you are willing to lose.
• Use your stop-loss order. Be prepared to use a stop-loss order to decide on the price you are willing to sell your coin in the future in case the price goes down significantly. This ensures you do not lose all your money in such events.
• Be prepared to hold for long. Do not sell your coins in panic when the value drops; it might rise again. Consider holding your coins for a longer period. Since the BTC markets are continually evolving, prices are likely to rise in the future.
• Use crypto wallets. Move your coins into your crypto wallets. Crypto wallets are considered a more secure option compared to exchanges as they are not dependent on middleman. Exchanges are prone to cyber threats such as hacking.

Why should you trade bitcoin?

There are several reasons why you should trade Bitcoin. Let us quickly mention a few of them:

• 24/7 market
• Access to low leverage account
• Profits from volatility
• Improved liquidity
• Less vulnerable to high impact news
• Easy to understand the market movement
• Options of going long and short

HFTrading is a trading platform with all the tools and knowledge to help any bitcoin trader or investors to trade and invest wisely. The platform offers CFD trading on a variety of assets, such as cryptocurrencies, indices, stocks, commodities, and currencies. Some of the advantages of using this award-winning platform for bitcoin CFD trading include:

• It provides a user-friendly environment for trading.
• It is highly trusted across the globe.
• It gives you access to one-click trading.
• It is available on the web as well as desktop and mobile applications.
• It offers advanced analysis tools for better trading judgment.
• It gives you access to trade on an array of other CFDs.

How to buy and sell bitcoin cfds with hftrading

To trade bitcoin CFDs on HFTrading, you need to undertake a few step process. The following are the necessary steps to take:

• Connect your laptop, desktop, or android to the internet.
• Go to our account opening page and create your free account.
• Verify your account – verify your email, upload the required KYC documents.
• Fund your account.
• Download a forex trading platform.
• Start trading.

How to withdraw your funds

• Make sure you verify your account.
• In your dashboard, click on “Withdraw fund” and fill in your account details and decide if you wish to withdraw your BTC to USD. You can also withdraw BTC to NZD.
• Click on withdraw, and your money is moved to your account.
• Your request may take a few minutes to hours to execute, depending on the number of requests at the time.

Bitcoin trading: main benefits and risks

Bitcoin trading has several benefits, including transparency of transactions, access to high leverage with Bitcoin CFDs, low trading fees, freedom to pay, low fees, global presence, and fewer risks to vendors.

Trading bitcoin is, however, not without some risks. Some of the inherent risks include hacking, price volatility, “Hard fork” splits, young technology, cyber theft, financial loss, currency regulation, and virtual currency fraud.

Summary

As the pioneer cryptocurrency, Bitcoin has gained popularity and wide acceptance globally. Bitcoin trading can be highly rewarding to those who have mastered the trade; however, it has inherent risks. Would you like to explore this topic? You can do so on our site, at HFTrading. HFTrading is a broker that provides a secure platform where you can trade Bitcoin CFDs as well as other CFDs of your choice.

There are numerous advantages of trading bitcoin CFDs with us, some of which include:

• Access to auto-trading
• Leverage trading
• Fast order execution
• 24/7 customer service
• Access to online courses, tutorials, articles, e-books, and VODs keep you acquainted with the market's happenings.
• Multiple platforms – Web and desktop and mobile applications

FAQ: How to trade bitcoin

• How do I trade in bitcoin CFDS? Trading in bitcoin CFDs does not require you interacting directly with exchanges. Rather, we source our buy and sell prices from different exchanges for you to trade in. All you have to do is open an HFTrading account to take a position on bitcoin price.
• Is bitcoin trading legal? Bitcoin use is legal in New Zealand. Payments are expected to go through the reporting and tax obligations as any other currency. Bitcoin does not exist in a physical form like the dollars, Euro or pound. However, you can store your bitcoin in bitcoin wallet NZ.
• How much does it cost to start bitcoin trading? You can start bitcoin trading with as little as $10.00, but you will need more if you are interested in opening several positions. There are minimum amounts for deposits, positions or trade size, and withdrawals on each site.
• How do I buy bitcoin New Zealand? You can trade bitcoin CFDs directly on our platform. You can also trade on crypto exchanges or buy bitcoin New Zealand using the LocalBitcoin.com from a seller close to you.
• What is bitcoin mining? Bitcoin mining is a process whereby miners use special software in solving complex mathematical problems and get rewarded with bitcoins in exchange. The “block reward” is the amount of new bitcoin released when a block is mined. Block halving takes place every 210,000 blocks or about every 4 years.