Bitcoin Trading 2023 – Tutorial and Platforms
Bitcoin trading has seen a huge surge. With plenty of volatility and price movements, it’s an ideal day trading market with huge trading volume per day. This page will help you learn bitcoin trading, outline bitcoin strategies and tips, plus highlight why a day trader looking for profit should delve into the BTC world. Use the list below to compare the best bitcoin exchanges 2023 and learn how to trade bitcoin.
Bitcoin Platforms
#1 - eToro USA
eToro US leads the way in cryptocurrency trading. 1% fee for buying or selling crypto added to the spread (from 0.75% for BTC), with their own wallet service and the largest number of cryptos to trade in the market. eToro copy trading is only for cryptos. Crypto asset investing is highly volatile and unregulated. No consumer protection. Tax on profits may apply.
"eToro is a top pick for users looking for social investing and copy trading. With a low deposit, zero commissions and an intuitive platform, the broker will meet the needs of newer traders."
- DayTrading Review Team
- Crypto Spread: BTC 0.75%
- Crypto Lending: No
- Platforms: Own
- Crypto Staking: No
- Minimum Deposit: $10
- Regulator: SEC, FINRA
eToro USA Crypto Coins
eToro USA offers trading on at least 26 crypto coins: AAVE, ALGO, BAT, BCH, BTC, COMP, DASH, DOGE, ENJ, EOS, ETC, ETH, FLR, LINK, LTC, MANA, MATIC, MIOTA, MKR, NEO, SHIBxM, UNI, XLM, XTZ, YFI, ZEC
Stocks Trading
Trade popular US stocks and ETFs with zero commissions while fractional shares and options are also available. The eToro Academy and excellent market research are also huge bonuses for newer investors.
About eToro USA
eToro is a social investing platform that offers stocks, ETFs, options, and crypto. The broker is well-known for its user-friendly community-centred platform and competitive fees. With FINRA and SIPC oversight and millions of users across the world, this brand is highly respected. eToro securities trading is offered by eToro USA Securities, Inc.
Pros
- The $10 minimum deposit and straightforward account opening process means beginners can get started quickly
- The online broker offers an intuitive social investment network with straightforward copy trading on cryptos
- A free demo account means new users and prospective traders can try the broker risk-free
Cons
- No MetaTrader 4 platform integration
- Narrower range of instruments than some competitors
#2 - NinjaTrader
Trade micro Bitcoin futures with low fees and leading charting tools. Get exposure to Bitcoin through CME Group's centralized exchange with robust risk management tools.
"We recommend NinjaTrader for high-volume futures traders looking for low fees and premium analysis tools."
- DayTrading Review Team
- Crypto Spread: Floating
- Crypto Lending: No
- Platforms: eSignal
- Crypto Staking: No
- Minimum Deposit: $50
- Regulator: NFA, CFTC
NinjaTrader Crypto Coins
NinjaTrader offers trading on at least 1 crypto coin: BTC
Forex Trading
NinjaTrader supports the trading of popular currencies including the EUR/USD. The trading software also offers unique features tailored to forex trading, including specific order and market windows.
Stocks Trading
Stocks can be traded by connecting the NinjaTrader platform to supporting brokers. You can then take positions on large public companies and household names via advanced trading software.
About NinjaTrader
NinjaTrader is a US-headquartered and regulated brokerage that specializes in futures trading. There are three pricing plans to suit different needs and budgets, as well as ultra-low margins on popular contracts. The brand's award-winning charting software and trading platform also offers a high-degree of customization and superb technical analysis features.
Pros
- Widely respected and heavily authorized by the NFA and CFTC
- Excellent trading software for active users with bespoke widgets and indicators
- Easy account opening that takes a few minutes
Cons
- Non forex and futures trading requires signing up with partner brokers
- Withdrawal fee on some funding methods
- Premium platform tools come with an extra charge
#3 - OANDA US
Speculate on the world's biggest cryptos by market cap. Commissions are lower than many peers starting at 0.25%. Clients can spot trade cryptocurrencies on Paxos's itBit exchange through the OANDA platform via OANDA’s partnership with Paxos. Users can trade digital currencies in a few taps through the iOS and Android mobile app.
"We recommend OANDA for US traders seeking a user-friendly platform with premium market research and a straightforward joining process. OANDA is a particularly good pick if you want a heavily regulated broker with a secure trading environment."
- DayTrading Review Team
- Crypto Spread: $100
- Crypto Lending: No
- Platforms: MT4, TradingView, AutoChartist
- Crypto Staking: No
- Minimum Deposit: $0
- Regulator: NFA, CFTC
OANDA US Crypto Coins
OANDA US offers trading on at least 8 crypto coins: AAVE, BCH, BTC, ETH, LINK, LTC, PAXG, UNI
Forex Trading
OANDA offers 68 forex pairs, more than many alternatives. The broker's in-house platform also offers impressive execution speeds and a suite of advanced charting and analysis tools.
About OANDA US
OANDA is a popular brand offering exceptional execution, low deposit requirements and advanced charting and trading platform features. The top-rated brand has over 25 years of experience and is regulated by trusted agencies, including the NFA/CFTC. Around the clock support is available, alongside flexible contract sizes and automated trade executions.
Pros
- Feature-rich app with 50 indicators, 11 drawing tools and 9 charting styles
- API facilitates access to 25 years of historical data and rates from 200+ currencies
- Industry-leading platforms including MT4 and TradingView
Cons
- Customer support not available on the weekend
#4 - IG Group
11 popular cryptos are available, plus two crypto crosses. A crypto index is also offered, following the value of the top 10 digital currencies by market cap. All cryptos are available via CFDs.
"IG offers a superb all-round package. Beginners will appreciate the user-friendly web platform and secure trading environment while established investors will rate the 17,000+ markets and top-tier market research."
- DayTrading Review Team
- Crypto Spread: Variable
- Crypto Lending: No
- Platforms: MT4, AutoChartist, TradingCentral
- Crypto Staking: No
- Minimum Deposit: $0
- Regulator: FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA
IG Group Crypto Coins
IG Group offers trading on at least 10 crypto coins: ADA, BCH, BTC, DOGE, DOT, ETH, LINK, LTC, UNI, XLM
CFD Trading
IG offers an impressive suite of 17,000+ CFD instruments. Negative balance protection ensures accounts cannot drop below zero while custom price alerts and the IG Academy enhance the trading experience.
Forex Trading
IG offers currency trading on its award-winning web platform and mobile app. Comprehensive charts and forex analysis tools are also available through ProRealTime.
Stocks Trading
IG offers 13,000+ shares, with more listed firms than most competitors. Fees are low with no commission on US stocks. Extended hours trading is also available alongside ultra-fast execution speeds of 0.014 seconds.
About IG Group
IG is an award-winning broker that has an excellent reputation globally. The brand-US offers spread betting, CFD and forex trading across a comprehensive suite of markets. IG is also multi-regulated, provides a great trading app and has 50 years experience.
Pros
- 24/5 customer support is available
- Users have access to a comprehensive range of charts, market news, client sentiment data, and analysis tools
- Share dealing and ISAs are available for longer term investing
Cons
- No copy trading platform
- Inactivity charge
#5 - Uphold
Buy and sell 250+ crypto assets with fiat currencies or in crypto pairs using a straightforward mobile app or through Uphold's browser-based account homepage. Uphold clients can also earn up to 13% APY by staking one or more out of 32 valid tokens, or send their tokens to an external wallet.
"Uphold provides a convenient one-stop option for investors who want a quick and straightforward way to access crypto markets. It will also serve users looking for crypto staking facilities."
- DayTrading Review Team
- Crypto Spread: 0.5% to 1% average
- Crypto Lending: No
- Platforms: Own
- Crypto Staking: Yes
- Minimum Deposit: $0
- Regulator: FCA, FinCEN
Uphold Crypto Coins
Uphold offers trading on a large number of coins, at least 96 coins. For example: AAVE, ADA, ALCX, ALGO, API3, ATOM, AUDIO, AVAX, AXS, BAL, BAT, BCH, BTC, BTCO, CAKE, CHR, DAO, DYDX, ETH, GHST, GLMR, GODS, INH, LSK, NMR, REQ, ROOK, TRB, XRP, XYO
Stocks Trading
Speculate on large US stocks including Tesla, Amazon, Alibaba and Apple. Uphold also offers equities that will appeal to ESG investors, helping it to stand out from competitors.
About Uphold
Uphold is a cryptocurrency trading app that allows users to buy, trade and transfer digital assets including 230+ crypto tokens. The app's trading environment also allows crypto staking, trading between various company stocks, and provides users with a debit card that provides rewards and easy multi-currency payments.
Pros
- Access to traditional asset classes in addition to digital currencies
- Supports wallet-to-wallet crypto transfers
- Fractional stock trading
Cons
- Identity verification required to access all features
- Limited charting and analysis options compared to specialist exchanges and platforms
- Weak regulatory oversight
#6 - Coinmama
Buy, hold and sell 16 crypto tokens including major players like BTC and ETH and lesser-known tokens such as LRC. Use a range of fiat currencies to buy the digital assets, including USD. Cryptos are stored in third-party wallets.
"New crypto investors looking to buy and sell popular tokens like Bitcoin with fiat currency will appreciate Coinmama. We particularly rated the loyalty program as a way to reduce fees."
- DayTrading Review Team
- Crypto Spread: From 2.93% to 3.90%. Express fees of 0-5.00% also apply.
- Crypto Lending: No
- Platforms: Own
- Crypto Staking: No
- Minimum Deposit: $30
- Regulator: FinCEN, FINTRAC
Coinmama Crypto Coins
Coinmama offers trading on at least 9 crypto coins: BCH, BTC, DOGE, ETH, LINK, LTC, UNI, XRP, XTZ
About Coinmama
Coinmama is a popular cryptocurrency exchange that aims to provide streamlined and user-friendly cryptocurrency trading options to the retail market. Traders can buy a range of tokens via a fiat on-ramp, store their tokens in a third-party wallet and earn loyalty bonuses for trading with Coinmama. Millions of clients from over 180 countries have signed up to the firm.
Pros
- Used by more than 3 million crypto investors
- Loyalty bonuses with fee discounts
- Choice of third-party wallets to store your tokens
Cons
- No iOS mobile app for iPhone and poor quality Android (APK) app
- High commissions from 2.93% for the highest tier account
- No direct crypto trading – clients must first purchase BTC or ETH
#7 - Nadex
Nadex offers a limited list of cryptos with just Bitcoin and Ethereum. Traders can go long or short though with straightforward binary options contracts that mean you don't need to own the underlying token.
"Users looking to trade short-term binary options with a US-regulated broker will find a good platform in Nadex."
- DayTrading Review Team
- Crypto Spread: Variable
- Crypto Lending: No
- Platforms: Own
- Crypto Staking: No
- Minimum Deposit: $250
- Regulator: CFTC
Nadex Crypto Coins
Nadex offers trading on at least 2 crypto coins: BTC, ETH
Forex Trading
Speculate on 11 popular currency pairs via Knock Out contracts, call spreads and binary options. Nadex offers a wider range of timeframes than most binary options brokers, with contracts spanning from intraday to weekly.
Stocks Trading
Speculate on a handful of global indices via binary options contracts, including the S&P 500 and FTSE 100. There are low commissions and traders can see fixed payouts and risk levels before opening a trade.
About Nadex
Nadex is a renowned exchange and binary options provider, based in the US. The company is fully regulated by the CFTC and offers options, call spreads and Knock Out contracts. Nadex also has just a $1 entry or exit fee and a user-friendly platform and proprietary app.
Pros
- Proprietary mobile app with good range of indicators and charting tools
- Extensive educational resources for those new to binary options trading
- A range of timeframes that will suit both short and longer term strategies
Cons
- Products and tools are more advanced than some alternatives
- No MT4 or MT5 platform integration
- No welcome bonuses or financial incentives
#8 - IQCent
IQCent offers 17 crypto assets through its own platform, including Bitcoin, Ethereum and Litecoin. Leverage on crypto CFDs is limited to 1:10 while binary options payouts vary by token but are competitive.
"IQCent will appeal to newer traders who want a platform where they can trade both binary options and CFDs with copy trading support and regular contests."
- DayTrading Review Team
- Crypto Spread: Variable
- Crypto Lending: No
- Platforms: TradingView
- Crypto Staking: No
- Minimum Deposit: $250
- Regulator: IFMRRC
IQCent Crypto Coins
IQCent offers trading on at least 3 crypto coins: BTC, ETH, LTC
CFD Trading
IQCent CFDs are available on forex, stocks, indices, commodities and cryptos with leverage variable by asset to a maximum of 1:500, which is higher than many alternatives. 24/7 customer support is also available to assist new users.
Forex Trading
IQCent traders can access CFDs or binary options on 40+ forex pairs, including majors, minors and exotics. CFD spreads start from 0.7 pips and binary options payouts are decent up to 95%. Trading takes place through the broker's proprietary platform with advanced analysis tools.
Stocks Trading
IQCent offers CFDs and binaries on four German stocks: Lufthansa, Deutsche, Daimler and BMW. Traders can also speculate on stock markets via seven leading indices including US30, S&P500 and FTSE100.
About IQCent
IQCent is an offshore binary options and CFD broker based in the Marshall Islands with 10+ payment methods and a low $50 starting deposit. With 100+ assets, around the clock trading and high payouts the brand is popular with aspiring traders.
Pros
- Binary options with 98% payouts
- 24/7 customer support
- Bonuses available up to 100% for Gold account members
Cons
- Poor selection of stocks with just four equities
- A short period before an inactivity fee is charged
- No MetaTrader 4 platform
#9 - Kwakol Markets
Trade cryptos against fiat currencies, other cryptocurrencies and metals like gold. This separates the broker from many alternatives that only offer cryptos paired with the USD. High leverage up to 1:20 on cryptos is available, plus support for Expert Advisors and copy trading.
"Kwakol Markets is a good option for newer traders with a dedicated learning academy, copy trading and a choice of reliable platforms. New clients can also sign up and start trading in four straightforward steps."
- DayTrading Review Team
- Crypto Spread: From 0.8 pips (Standard Account)
- Crypto Lending: No
- Platforms: MT4, MT5, AutoChartist
- Crypto Staking: No
- Minimum Deposit: $1
- Regulator: ASIC, FINTRAC
Kwakol Markets Crypto Coins
Kwakol Markets offers trading on at least 6 crypto coins: BCH, BNB, BTC, ETH, LTC, XRP
CFD Trading
CFDs are available on a breath of underlying assets, including stocks, indices, commodities, forex and cryptos. High leverage up to 1:500 is available alongside a 0.01 minimum lot size and award-winning software. For the tightest spreads from 0 pips, opt for the Premium account.
Forex Trading
Kwakol Markets offers a wider range of forex pairs than most competitors, with 90+ assets available. Users get fast execution speeds through the ECN model and competitive spreads. On the negative side, not all currency pairs are available on MT4.
Stocks Trading
Trade stocks with zero commissions and ultra-fast trade executions. Clients get exposure to US, EU, Asian and Russian stock markets on both the MT4 and MT5 platforms. Stocks are available as CFDs, so users will not own the underlying shares.
About Kwakol Markets
Kwakol Markets is a Nigerian headquartered broker with strong regulatory oversight in Australia and Canada. A great selection of asset classes are available, including synthetic products that simulate realistic market activity. Clients can trade on the MT4, MT5 and cTrader platforms, as well as a copy trading solution whereby a fee is only paid on profitable trades.
Pros
- Excellent market analysis tools
- Demo account available
- Full range of investments with 1000+ assets including cryptos
Cons
- Regional restrictions in certain countries
- High deposits for premium features
- Lack of deposit and withdrawal methods
#10 - Webull
Webull offers trading on popular cryptos like Bitcoin against the US Dollar. With 35+ tokens and premium analysis tools, traders can review market trends and identify opportunities in a few taps.
"Webull is best for traders looking to buy and sell stocks on a user-friendly app with zero commissions."
- DayTrading Review Team
- Crypto Spread: Floating
- Crypto Lending: No
- Platforms: Own
- Crypto Staking: No
- Minimum Deposit: $0
- Regulator: SEC, FINRA
Webull Crypto Coins
Webull offers trading on a large number of coins, at least 43 coins. For example: ADA DASH, ALGO, ATOM, AVAX, BAT, BCH, BTC, CRV, DOGE, EOS, ETC, ETH, FTM, GRT, LINK, LRC, LTC, LUNA, MANA, MATIC, REM, SHIB, SISHI, SOL, TRX, UNI, XLM, XMR, XTZ, ZEC
Forex Trading
Webull offers a modest collection of 17 currencies, including majors like EUR/USD. Forex can be traded on the feature-rich investing app with real-time quotes and low spreads.
Stocks Trading
Webull offers a fantastic list of 2000+ US stocks, fractional shares, options, ETFs, OTC, and ADRs. There is no commission on stocks, ETFs, and options. Full extended trading hours is available while custom screeners and watchlists aid the decision making process.
About Webull
Webull is a US-regulated trading app that offers stocks, options, forex, cryptos, ETFs, fractional shares and more. The firm is authorized by the SEC and FINRA with a strong trust rating. Low fees, no minimum investment and generous bonuses have made the discount broker popular with online investors.
Pros
- Smart Advisor for auto investing
- No commission or inactivity fees
- No minimum deposit for beginners
Cons
- Sometimes sudden changes in trading conditions
- Day trading is limited for customers with less than $25,000 deposited
- High deposit and withdrawal wire fees for non-US residents
What Is Bitcoin?
Bitcoin is part of the emerging cryptocurrency market. Whilst cash is made of paper, bitcoins are basically clumps of data. Scrapping the bank or governmental middle man that act as an intermediary for your money, cryptocurrencies enable the transfer of money directly between individuals, utilising secure blockchain technology.
The blockchain is a secure ledger of transactions. Digital coins can be mined by processing complex mathematical algorithms.
The blockchain network records each transaction, securing the entire process – but crucially – speeding it up. Charges are made per transaction.
Bitcoin was the first cryptocurrency to utilise the technology, and subsequent growing pains have led to ‘forks’ in the process. This resulted in the introduction of Bitcoin Cash. Other currencies then tried to improve the process, both in terms of speed, but also, costs and energy requirements. Ripple, Ethereum and Litecoin all claim to be superior to Bitcoin.
The vast wealth of bitcoins are held in the hands of a few, so bitcoin is bought in fractions as low as one-hundredth of a million, which equates to just less than one-tenth of a cent currently.
This means anyone can dabble and explains the boom in bitcoin trading volume per day.
The current cryptocurrency market is estimated to be worth around $148 billion, but analysts believe that figure could climb to a staggering $1 trillion by 2019. This makes day trading bitcoin an appealing proposition.
Bitcoin makes up half of the cryptocurrency market and Roger Ver, Bitcoins CEO, believes ‘it’s the dawn of a better, more free world’. Whilst that remains to be seen, it does have certain attributes that make it tempting for those looking to make money day trading bitcoin.
Why Day Trade Bitcoin?
- Never a dull moment – With swings of over 10% in a matter of hours, this volatile market should give you the chance to find traceable action, and a potential profit for a savvy bitcoin day trader. Put simply – it’s an exciting market to day trade in. So unless you hand over your trust to a day trading bitcoin bot, you’ll have fun glued to the screen.
- Ideal for those comfortable with Forex – You don’t need to understand the complex technical world of cryptocurrencies and bitcoin. It’s basically a currency, enabling you to apply the same thought processes when you’re day trading bitcoin as you would when you’re day trading Forex.
- Potential for leveraged trading – Some bitcoin exchanges offer leveraged trading, which could give you greater exposure to upside and downside price risk than your trading budget may normally allow.
- Universal access – You can start day trading bitcoins anywhere on the planet, 24 hours a day, 7 days a week, 365 days a year. You simply need an internet connection. Plus, because you’re day trading you don’t need to have a long term view about whether cryptocurrencies will succeed. In addition, whilst the stock market can be a pricey place for normal investors, with Facebook and Apple shares costing around £110 per share, you can dive into the cryptocurrency market with just a dollars or pounds.
- Low day trading bitcoin fees and taxes – Compared to many traditional exchanges, bitcoin focused exchanges offer low fees and minimums.
- Go Long or short – Each day is different, you can be bullish and bearish the same week.
Bitcoin Wallet
To actually own bitcoin (rather than speculate on the price), you need a digital wallet to store your cryptocurrency. There are a whole range of wallet providers out there, but we like Coinbase. It offers higher levels of security than most and is backed by large, regulated brokers.
What You’ll Need To Start Trading
So you want to make money day trading bitcoin? Now you understand why to trade and what you’re trading, but here’s a bit more detail on the how – it’s a “Trading Bitcoin For Beginners” step by step guide:
How To Trade Bitcoin Step 1 – Find out the price
One of the first things you’ll need to know is what the price is. To do that you’ll need to head over to an index or exchange to see the latest traded value. You can also use orders – open orders or limit orders – to enter the market at the point you want to.
Step 2 – Pick an exchange
One of the biggest decisions you’ll have to make is which exchange or brokerage to deposit funds with. Day trading bitcoin on Bitmex or Coinbase has become particularly popular in recent years. However, there are other choices too, including:
- Bitfinex
- Bitstamp
- Kraken
- BTC-e
- GDAX
- Luno
Away from the direct exchanges, there are also firms that will allow you to trade the underlying asset of Bitcoin, without actually owning it. It can for example, be traded within a forex pair against the US dollar. Other exchanges, such as IQ Option, will also allow you to speculate on bitcoin via CFDs or spread bets. Our list of top Bitcoin brokers will show which firms offer one-click trading of BTC.
It’s also worth considering brokers that accept Bitcoin payments. These firms offer the seamless management and funding of BTC trading portfolios by reducing transfer charges and processing efforts.
Step 3 – Capital
Before you can make money day trading bitcoin you’ll need some capital to start with. The internet is packed full of warnings about losing all your money so let’s keep this brief.
Whilst you find your feet, using a small amount is advisable. It’s also worth highlighting that you should never trade more than you’re willing to lose. Be strict and regimented with what you can and can’t afford to lose, and you’ll never need to worry about losing out to the cryptocurrency market.
Useful tip – If you’re using credit cards, you may get charged up to 3.99%, so keep an eye out for credit cards that offer 3% cash back so you can negate part of the cost.
Step 4 – Bitcoin strategies
Rodger Federer doesn’t step onto the tennis court without a clear trading strategy, and you shouldn’t start day trading bitcoin without one either. Some people seek the assistance of a bitcoin day trading bot, others rely on their own technical analysis and judgement.
Nearly all bitcoin day trading tutorials will suggest you utilise price charts and have an effective money management strategy. This will help you keep losses at a minimum and profits high.
Reading the charts
Whilst you will find an abundance of line and bar charts, don’t make them your bread and butter. Candlestick charts offer you the most information in the smallest amount of space. From them you can learn several essential bits of information:
- What was the price when it opened and closed.
- How high the price got during the time frame, as well as how low it dropped.
- If the candlestick is green, then you know the price closed higher than when it opened.
- When it’s red, it tells you it closed lower than when it opened.
- If the chart is mostly green and heading upwards, you’re in an upwards trend.
- You know if the chart is mostly red, you’re in a downwards trend.
When using your chart ensure you have the right timeframe settings. For day trading bitcoins you want charts that are between 1-30 minutes.
If you want to make money day trading bitcoin you’ll need to get familiar with candlesticks and their indicators (see example below). It isn’t uncommon for bitcoin to fall into a repetitive trend for months on end. If three of the last four candlesticks have been red, then there’s a good chance it’s going to carry on heading that way, unless the RSI suggests it’s been seriously oversold.
On Balance Volume Indicator
Whether you were day trading bitcoin in 2015, or day trading it now in 2017, consider using the on balance volume (OBV) indicator. It utilises an intelligent combination of price and volume activity to tell you what is the total money flowing in and out of the market currently.
How do you apply it to Bitcoin? If bitcoin trading is on the rise whilst the OBV trading is heading south, then you know people are selling into this rally, however a move to the upside would not be sustainable. The same logic can be applied in reverse.
News
Another one of our top tips – It is imperative you utilise multiple news sources. Bitcoin value is extremely reliant on public perception, so news events can trigger spikes. Some of the most useful and user friendly news sources out there are:
- CryptoCoinsNews
- Bitcoin Magazine
- Coindesk
- The Street
- Coin Telegraph
- Business Insider
- Brave New Coin
- CNBC
When it comes to useful bitcoin day trading tips, many suggest that if there is zero negative news about bitcoin and cryptocurrencies in general, then it could well be the right time to sell. On the flip side, if there’s positive news then it could be time to buy.
Use this is a broad guide for day trading bitcoin and you’ll avoid some pitfalls and utilise some opportunities, hopefully making for a substantial bitcoin day trading profit.
Risks
Trading bitcoin for beginners introduces numerous risks – traders must be aware of them before putting money on the line. Learning bitcoin trading can involve expensive mistakes, so this list of risks with hopefully offer new traders some tips to avoid the pitfalls:
- Regulation – Bitcoins and cryptocurrencies are relatively new, making their future somewhat uncertain. People don’t know how governments will react further down the line and how stringent regulations will be. Could regulations cripple the market entirely?
- Dangers of volatility – Bitcoin is the most volatile of all assets, including the stock and gold markets. Whilst volatility brings with it opportunity to day trade bitcoin for a profit, it also brings with it doubt and unpredictability. For example, in June 2017 bitcoin was being traded at $2,983. It then lost 30% in value and crashed down to $1,992, only to climb up to $4,764 in September, boasting a 139% gain. You must ensure your bitcoin day trading strategies take into account the uncertainty.
- Exchange risk – Whilst your Bitcoins can’t disappear, the transactions you do are permanent and only the recipient can refund them. This means you must only do business with those you either know, trust or are widely reputable.
- Fees / Charges – If buying and selling Bitcoin directly, transactions costs can vary wildly. This can be a wider complaint with the concept as a whole, but for intraday traders making multiple trades, it is a significant risk. CFDs and binary options (or any derivative) can mitigate this risk.
- Margin Trading – Derivates can often be traded on margin. While this can increase profit potential, it also increases the risk. Losses can exceed deposits when trading on margin.
Last Words
The cryptocurrency market and bitcoin, in particular, are an exciting market for the aspiring day trader. Whilst there is understandable uncertainty, fortune favours the brave, and with these day trading bitcoin tips at your disposal, there’s serious potential profit to be made. Demo Accounts offer a risk free way to learn how to trade Bitcoin.