How to take advantage of volatility in Bitcoin Value

How to take advantage of volatility in Bitcoin Value

How to take advantages of Bitcoin Value on eToro?

Bitcoin is one of the cryptocurrency industry leaders; it was the first and currently has the largest market cap. Since a lot of people are interested in investing since Bitcoin value has skyrocketed in the past few years.

Due to the low supply of Bitcoin, day traders have now switched to a more efficient trading system; Bitcoin CFD trading. Using Bitcoin CFD trading, they can use the market’s volatility to their benefit, since their trades yield higher profits and higher losses.

What is Bitcoin CFD trading?

A CFD – a contract for differences – is a representation of the asset that you’d like to invest in. For example, in Bitcoin CFD trading, the underlying asset would be Bitcoin. The CFD trading market is all about speculation; if you think the price of an asset will rise, you buy CFDs of that asset. If the price does move in your direction, you will make a proportional profit in the short run. Conversely, if the price moves against your speculation, you will incur a proportional loss. There are many platforms where you can carry out CFD trading today.

eToro

eToro is a CFD trading website founded in 2006 by two brothers as a website for social exchange between traders. This evolved into an idea that they could create a trading website and pair the social aspect, making it a Facebook for CFD traders. On the website, you can trade CFDs and connect with your favorite traders, you can follow them and their trades! Yes, you can actually copy trades that high earning traders are doing because all of their trades are posted on their wall. That’s what sets eToro apart from other CFD trading websites since eToro has a strong community within it which helps beginners to start trading and helps create a strong network.

How can you take advantage of Bitcoin’s Value on eToro?

Bitcoin’s value on eToro is pretty unstable, and I guess most of you know that. The currency can shift over $30 every day and so the market is quite reactive to all suggestions.

However, you can actually make use of this volatility by trading Bitcoin. Since the Bitcoin Value swings around, you can trade CFDs of Bitcoin when you believe that the price will shift. This is called swing trading. It’s one of the most used strategies in CFD trading.

Swing trading is associated with developing an analysis of the price trends. When the price of an asset is increasing over time, there might be small swings or dips. Usually, these swings or dips recover quite quickly and the price of the asset continues to rise after.

Swing strategy refers to buying the asset at the bottom of one of these small dips, and to sell them immediately after. Since we’re working with CFDs here, that’s quite easy to do. You can sell the CFD a few minutes after as the price rebounds. If the dip doesn’t result in a reversal, you have just made a nice profit since you sell at a higher price than what you bought it at.

This is pretty profitable in the long run.

And that’s it.

Hopefully, this article was helpful in showing you now you can make use of the Bitcoin Value volatility to generate profits. You can check out WikiCrypto’s Full eToro Review for any other information you might be looking for.

You can also check out our guide to the best strategies for CFD trading here.

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About Article Author

Michael Serrano
Michael Serrano

Michael is an engineer and a bitcoin evangelist. He has been involved in cryptocurrencies since 2013. His biggest wish? 1 billion users of bitcoin, ether and litecoin by 2020. In the last 10 years he has worked for various early-stage start-up as a back-end developer.

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