When to Trade Bitcoin – A Beginner’s Guide

When to Trade Bitcoin – A Beginner’s Guide

How to Trade Bitcoin?

When you trade Bitcoin, you exchange Bitcoin against USD and try to speculate and maximise your Bitcoin holdings. The idea is to buy Bitcoin when it’s low, and sell when it’s high to make a profit. Usually, bitcoin trading only makes money when it’s a rising market. Trading in falling markets isn’t useful since it doesn’t generate any profits; it mitigates losses.

Bitcoin trading also depends on what kind of market environment there is as of now. Markets can be described as bullish or bearish. Essentially, it’s a bullish market if an investor thinks that the price of a commodity will rise over time. If investors believe that the prices will decrease over time, it will be considered a bearish market.

If you want to trade Bitcoin, one of the simplest ways to do so is Bitcoin CFD trading. It’s like trading Bitcoin but you can make profits in falling as well as rising markets. Contracts for the difference – a CFD – is technically a unit that is traded on the platform. Essentially, this market is all about speculation.

If you think that the price of an asset will rise, you purchase 10,000 units or CFDs to show that position in the market. Now, if the price actually does go up, you would make a proportional profit and vice-versa.

When you trade CFDs, you’re not trading the underlying asset, there’s no real world market access. You only buy CFDs, a speculative representation of the asset.

When to Trade Bitcoin?

If you use a CFD service, you can trade Bitcoin whenever you want. Since Bitcoin is a cryptocurrency, CFDs trade 24/7. The benefit of CFDs is that you can trade them in falling and in rising markets. If you trade traditional bitcoins, you might come across this issue that CFDs solve.

One good strategy to develop is to base your speculations on actual real world activity. If you think that Bitcoin will rise, then you must have substantial proof to think so. For example, imagine that tomorrow a bank adopts a payment system based on a coin. Naturally, the value of this coin will rise in the future.

However, that is something that only you as the investor can evaluate. So as a general rule of thumb one must always base their speculations on real economic ideas.

Where to Trade Bitcoin?

Plus500 is the world’s leading trading CFD platform for financial instruments like commodities, stock and market indices.

The Plus500 website offers several features that set it apart from the rest. Firstly, the risk-management tools that are offered to each user are efficient ways to make sure that your money is not at risk. These tools allow you to minimise your loss when for example you speculate that Bitcoin prices will rise, and it eventually plummets, the program will automatically change your position when the price drops to a specific level.

The greatest feature by far on Plus500 is that it displays most of the world’s financial instruments market prices on the website in real time, this allows for better monitoring of the trades that you make.

The new website is intuitive and easy to use and is one of the few companies that provides an Apple Watch app as well as iOS and Android.

The Plus500 website has a free sign-up bonus of $25 which can be used for traders who want to experience the world of CFD trading without making any commitments. What’s better is that this free account can be used indefinitely, unlike other trading platforms which require “pro” accounts with deposits.

Plus500’s free account also offers a demo version of CFD trading. This is pretty interesting because Plus500 gives you $100,000 in virtual money to trade bitcoin. You can start practising on the Plus500 demo version and then choose if you want to invest or not.

Here is Plus500’s demo version:

plus500-demo-final-300x127 When to Trade Bitcoin - A Beginner's Guide

Plus500’s CFD trading Demo

As you can see here, whilst trying the demo version, I accidentally chose a much higher trade than I wanted to. You can see the Eur 90 loss that I made based on that trade. That’s why I think it’s better to try out their practice version before investing real capital into Plus500. 

Check out our ultimate guide for investing into Bitcoin here.

When you sign up, Plus500 gives you $100,000 in virtual currency to trade any crypto currency. So you can check out the great demo version by clicking below:

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About Article Author

Martina Kelowsky
Martina Kelowsky

Currently working on her Master Degree in Economics & Computer Science she lives in Russia. She is a Bitcoin Enthusiast since 2013 and Investor in various ICO since 2014. She aims to democratize a future where money is decentralized and transaction anonymous.

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