Anyone can invest in Bitcoin and leave it to sit in their wallet for a year or two, yet, it takes knowledge, experience, and a bit of courage to actually trade it. By actively trading Bitcoin, you can take advantage of the extreme volatility of the crypto market (and the asset itself) and generate much higher returns compared to just investing and accumulating coins.
However, don’t neglect the fact that the risk of losing more is higher the more your invest and the more frequently you make trades. That’s exactly why many people decide not to play with fire but to HODL instead, regardless of the potentially higher profits. Yet, if you believe that passive investing is not for you, you can still learn how to day trade Bitcoin and make money out of it. We’ve covered the basics of Bitcoin investing in this guide!
Set Up an Bitcoin Exchange Account
To be able to start trading cryptocurrency, you should make an account with one of the cryptocurrency exchanges (there are literally dozens of exchanges out there). A crypto exchange is a place where all the magic happens – a place where you can buy, sell, and swap digital assets.
Three of the most important factors to consider when making the final choice of a crypto exchange are features, security, and ease of use. For instance, you’ll want to be able to have as many fiat-to-crypto, crypto-to-crypto, and crypto-to-fiat trade pairings as possible. Exchanges that offer a wide variety of cryptocurrencies typically have more users and, more importantly, are more liquidity. Liquidity refers to the ease and speed of processing transactions and it largely depends on the number of market participants.
To make it possible to trade Bitcoins for beginners easy and straightforward, most exchanges created user-friendly, easy-to-navigate interfaces so you can start trading within just a couple of minutes after creating an account.
Last but not least, you should choose between the most reputable, reliable, and secure exchanges that provide a couple of lines of defense (such as multi-factor authentication) to prevent cyber attacks and the loss of funds. In 2022 only, hackers stole more than $1.3 billion in crypto, which is why you should pay attention to crypto safety tips to keep in mind to ensure that your assets are truly safe and sound.
To be able to make an account, most exchanges will ask you to provide your name, address, phone number, ID, and email, and complete KYC and AML procedures. Once you pass these, you can start trading right away.
How to Understand Price Charts
Mastering the art of buying low and selling high has a lot to do with understanding price charts and timing the market right. So, if you want to trade Bitcoins to make money, you’ll have to understand historical data and volume first, then learn how to recognize patterns (bullish and bearish) that indicate price movements.
Price fluctuations are actually money-making opportunities, even when the market is in a downtrend, and these key data points can help a lot with making informed decisions. To learn how to day trade Bitcoins, you’ll need to get a better understanding of candlestick patterns (wedges, head and shoulders, shooting star, inverted hammer, etc).
Yet, bear in mind that candlestick patterns can’t be solely used for making price predictions. They rather show possibilities and you should definitely familiarize yourself with more crypto market factors and trading techniques.
Fundamental vs. Technical Analysis
Many people out there, some experienced traders included, use fundamental and technical analysis interchangeably, although there are several key differences between the two.
Fundamental analysis involves fewer technicalities and focuses on the evaluation of the past and current trends and finding the connection between the trading volume and price action, and is, thus, more beginner-friendly.
On the other hand, technical analysis also predicts price movements but on a higher, more complex level and it involves charts, graphs, and math equations Technical analysts use multiple technical indicators such as volume, volatility, and momentum indicators as well as historical data to determine trend patterns, zones of support and resistance, and entry and exit points. It’s not hard to guess that most seasoned traders are the only ones who can truly leverage the power of technical analysis.
Since both technical and fundamental analysis have their own pros and cons, it’s best to use them combined when figuring out your trading strategy and your next moves.
How Much Money Do I Need to Trade Bitcoins?
Two of the most common questions people ask before embarking on the journey of crypto trading are: how much money do I need to trade Bitcoins online and how much money can I make. And, there are no right or wrong or clear-cut answers here. It all depends on how much you are willing to invest for starters and the amount of risk you can stomach.
Bitcoin is not the type of asset that can make 2x or 3x overnight. No, it’s unlikely for Bitcoin’s price to double even during a period of a couple of months. Still, does that mean that you can’t make any money out of it? God, no! You can still make decent profits if you make trades only when you are confident about the course of the price action and if you learn how to control your emotions, fear and greed in the first place.
Bitcoin Trading Bots
You already get that learning about technical and fundamental analysis is time-consuming and now, all that you want is to find a way to trade Bitcoins online without investing much effort. Well, you’re not the only one. Many people out there are looking for shortcuts and ways to increase the profitability of their trades, and, needless to say, generate more money, faster.
That’s how some other people came to the idea to make a Bitcoin trading robot. A bot does all the hard work – tracks indicators, patterns, and trends, and enters and exits trades on its own. All you need to do is make a deposit and let the program do the magic. Ah, if only doing crypto was THAT easy…
Bitcoin Evolution is one of those popular Bitcoin trading bots that has been taking people’s money for a while now. Allegedly, it is using their money to make profitable trades but most of them actually end up in the red while getting the deposited money back (or at least some of it) is extremely unlikely.
If you want to make sure not to fall for this type of scam, read more about this particular bot in Scammer Watch’s Bitcoin Evolution review.
Scammer Watch has been exposing all of these fraudulent websites to help people understand how trading bots work and to teach them that to trade Bitcoins to make money means investing much more than just several hundreds of dollars – time, patience, and practice.
Crypto is definitely not the get-rich-quick scheme. If you really want to make a pretty penny in this industry, you’ll have to learn how to day trade Bitcoins (and, optionally, altcoins), get clued up about technical stuff, and gain control over your emotions so you don’t mess up the game.