Guide to Bitcoin Trading

Bitcoin trading is a new venture that seems to have captivated quite a number of investors and players in the financial markets. This is a process that allows you to speculate the price of cryptocurrencies for purposes of investing. Initially, the process was just about buying Bitcoin and holding it with the expectation that the price will rise. However, times have now changed, with the crypto community finding ways of predicting the price movements of the coins. This has caused the market to be quite volatile.

There are numerous derivatives that have been introduced, which allows users to speculate the price of Bitcoin and other coins. Traders are able to take advantage of this without being responsible for the direction of the underlying coins. The biggest secret is being in a position to learn and predict the variables that affect the price of Bitcoin. Trading with such understanding will give you an upper hand and if all goes well you can make quite a kill.

So what are these elements that impact the price of Bitcoin?

  • Supply Level: One of the main factors that affect Bitcoin prices is the supply, which is currently limited to 21 million. This is speculated to be depleted by the year 2140. As such, where the supply is limited, this could cause an increase in the prices, if the demand is high.
  • Negative Publicity: No one wants to be in a risky business and as such, when there is any bad press about Bitcoin, the prices seem to decline. This affects the overall price of the other crypto coins.
  • Bitcoin Integration: In the recent past, any news of integrating Bitcoin with different payment systems gives it a boost. Where more financial frameworks will keep admitting Bitcoin as part of the acceptable modes of payment, the demand will increase, thereby affecting the price.
  • Major Events: There are certain occurrences that may affect the price of Bitcoin. Some of the key events include security threats, regulatory changes, and other announcements that are critical. These can push the prices up or down.
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Bitcoin Trading Options

Before commencing trading on, you will need to have a strategy that you can use. Some of the key strategies that have proved to work for Bitcoin investors include:

  • Trend Trading
  • Day Trading
  • HODL
  • Bitcoin Hedging

Bitcoin Trend Trading

This is a strategy where one is required to take note of the current trend. Take note of the bull and bear trends and find a matching position that you can use.

Day Trading

As the name implies, this strategy allows you to open and close your position within one trading day. This means that you will not have any Bitcoin overnight and this is a safe strategy for most investors. This is perfect for short-term price movements.

HODL Trading

This is also another interesting strategy where you will buy and hold Bitcoin. This is ideal for those who wish to trade for long-term prices. As such, there is an aspect of research that goes into the process to determine the market trends and price movements.

Bitcoin Hedging

This is considered to be the safest strategy for those who would love to mitigate risks. As such, once you have taken a trading position, you will also take an opposing one. This means if the market moves against you, you will not have to worry about a total loss.


Different Bitcoin trading strategies will deliver different results. It is advisable to start with lower amounts while testing the waters. Eventually, you can go big once you have understood the trading game. You will determine if you would want to engage in short-term or long-term trade or a combination of both.

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