The concept is relatively simple, by taking central banks out of the equation, a more stable currency is born. This is done through what is known as virtual currency. So, essentially Bitcoin is a virtual currency. There is no paper or metal money; instead, everything is done in the virtual world which makes the currency incredibly liquid and more versatile than others.
What Is Bitcoin Trading?
Bitcoin trading is the process of capitalizing off of the trends in the value of Bitcoin in order to generate a profit. So, as with any other type of trading, the idea is to buy when the value is low, and sell when the value is high. As with any other financial asset, the value of a single Bitcoin changes quite a bit depending on the levels of supply and demand at any given time. So, by purchasing the currency on up-trends and selling the currency when the value reaches market resistance, realizing profit is relatively simple.
A Brief History
As a trader myself, I like to look into the history of financial assets before trading. This gives me an idea of trends that we’ve seen in the past. And since trends are likely to repeat themselves, I also get an idea of where the value is likely to go in the future. With that said, Bitcoin is relatively new. So, there’s only a brief history to track. Nonetheless, here’s what we’ve seen throughout the incredibly recent history of the virtual currency…
Bitcoin was started in mid-2010 with a base value around $0.05. For the first year or so, there wasn’t much traction as many investors simply didn’t seem to care about the currency. However, as economic conditions in the Eurozone became a concern in late 2011 to early 2012, the currency started to see a sudden spike in popularity. This spike in popularity led to investor interest that would drive the value of the currency to incredible highs. By 29 November 2013, the value of a single Bitcoin reached a record high of $1127.67.
Unfortunately, the upward momentum proved to be impossible to maintain. Soon, the value of Bitcoin started to fall as concerns of fraud and the idea that criminals were using the currency to fly under the radar started to arise. Since then. The currency has been dealing with a public relations nightmare; essentially falling in value every step of the way. However, throughout the beginning of the year 2015, we started to see support in the market; insinuating that the value of the currency will start to rise again soon. Currently, Bitcoin’s value hovers around $225 as investors anxiously anticipate the next climb in value.
Making Money Trading Bitcoin
As mentioned above, making money trading Bitcoin is a relatively simple process that’s all about following trends.
Here’s how it’s done…
Step 1: Open Your Candlestick Chart – Candlestick charts are essential for identifying and capitalizing from trends. In this particular case, profitable trends will be easiest to spot in the 15 minute frame. So, make sure you’re looking at the right frame.
Step 2: Determine The Direction Of The Current Trend – Looking at your candlestick chart, it should be relatively easy to see if the trend is moving in the upward or downward direction. One of the benefits of currency trading is the fact that you can easily go long or short; making money off of up-trends or downtrends. So, by determining the direction of the trend, you can decide which type of trade to make.
Step 3: Time Your Buy – Keep in mind that you want to buy either at the highest point in the trend, or the lowest; following the trend to earn money. So if there’s an uptrend currently happening or that just met resistance, you’ll want to buy against the currency to make money off of the downtrend. Then, when the trend starts meet support, start buying into the profits to make money as it rises back up.
Step 4: Rinse & Repeat – Simply follow steps 1 through 3 until you’ve decided you’ve made enough money for the day.
Conclusion
As you can see, Bitcoin really isn’t complicated at all. In fact, trading the currency is just like trading any other financial asset on the market. All you need to remember is to buy low (as the value starts to reach support) and sell high (as the value starts to reach resistance). So, what are you waiting for? It’s time to start making money in the market! Start trading Bitcoin today!