Bitcoin trading refers to the speculation on the price movement of this cryptocurrency with the aim of generating profits.
In simple words, a buyer buys bitcoin through an exchange platform, hoping that its value will rise in the future, and sells it if it happens.
On the other hand, Crypto traders nowadays are increasingly trading bitcoin derivatives to speculate on rising and falling prices to make the most out of bitcoin’s volatile nature.
If you’re too thinking to start bitcoin trading, read this detailed guide you should read. But before that, let’s discuss – What is Bitcoin?
What is Bitcoin?
Nowadays, traditional stock and forex traders are shifting towards crypto trading because of high market volatility, 24/7 availability, and a great source of passive income.
To trade bitcoin, you’ll just need a reliable brokerage or exchange platform and a good knowledge of the bitcoin market.
If you’re still finding it difficult to start bitcoin trading, here’s a step-by-step guide to ease your trading journey.
Find A Reliable Exchange Or Brokerage Platform:
Many Indian investors are worried about the legality of bitcoins in the country. Let us tell you that there is no law or legislature that bans or restricts cryptocurrency trading in India.
So, you can easily do so with the help of available crypto exchanges. However, you are subject to pay a hefty tax of 30% on all crypto transactions.
To start bitcoin trading in India, you’ll need to find a good exchange or brokerage platform that provides services in the country.
With the help of these trading platforms, you can trade, buy or sell bitcoin in a matter of minutes. In addition, these exchange platforms also allow you to store bitcoins in crypto wallets such as hot and cold wallets.
The brokerage and exchange platforms offering services in India include WazirX, InvestBy, and CoinSwitch Kuber. These exchanges also offer advanced mobile apps for trading on the go.
After deciding on the best crypto exchange, you must first create an account with them. This account creation process of most exchanges is similar and fully digital.
The exchange will verify your details throughout the registration process, depending on the services you choose and the amount you wish to deposit.
You may be required to submit copies of your PAN card, identification, and proof of address for the KYC process.
Make A Deposit:
To trade digital currencies, you must first create an account and deposit funds into the crypto-trading account. You may deposit money from your bank account to your crypto-trading account.
On the other hand, you can also choose from a variety of payment options offered by the exchange platform. You make deposits through fiat currencies or bank transfers.
Research The Markets:
When trading any cryptocurrency such as Bitcoin, Ethereum, litecoin, or other coins, you should keep yourself updated with any news on the market, industry, and/or country’s security and macroeconomics.
This information can aid in predicting future trends and provide insight into the factors that influence the pricing of Bitcoins.
Choose A Good Trading Strategy:
After researching the bitcoin markets, choose a good trading strategy such as Day Trading. The strategy involves buying and selling bitcoin on the same trading day.
In day trading bitcoin, traders place long and short trades in the attempt of profiting from the speculation on the price movements.
A day trader closes all open positions at the end of the day. It is considered the best and most common trading strategy for crypto trading.
Place An Order:
At last, you can place a Bitcoin trade based on your market analysis and trading strategy.
All you have to do is open the deal ticket for the market you want to trade, and you’ll see the listed buy and sell price.
You’ll be able to choose the size of your position before selecting buy or sell to open a long or short trade.
Put in your position size and risk-management options like stop-loss and take-profit orders. These trading circumstances might be quite important in risk management.
Monitor Your Position:
After placing the order, the most crucial step is to monitor your position. In the ‘open positions’ part of the trading platform, you may track the profit/loss of your position.
When you’ve determined it’s time to close your position, all you have to do is place an equivalent trade in the opposite direction.
What Are The Best Tips For Bitcoin Trading?
Unlike Stocks, bitcoin trading doesn’t require a great set of knowledge. However, there are some tips you should consider to maximize the profit chances.
Here are some of the must-read tips for trading bitcoin:
Start With Little:
The very first tip we’ll give you is to start with a little amount. Don’t put all of your hard-earned money to trade bitcoin; you might end up losing all your money due to the market’s high volatility nature.
The best part of bitcoin is that you can buy it in fractions, meaning you’ll not need to spend thousands of dollars to buy bitcoin.
Never Trust Low-rated Exchange Platform:
The most crucial piece of advice is to choose a reliable exchange or brokerage platform. Never fall for fake offers by scam exchanges.
There are several scam exchange platforms that eye on duping their clients’ money; we advise you to never fall for them.
The most trusted crypto exchange & brokerage platforms for bitcoin trading in India are WazirX, InvestBy, and CoinSwitch Kuber.
Take Extra Caution While Using Leverage:
Leverage is like balancing between market risks and rewards, so it should be used with extra caution. With this, you might get a significant profit, or it can lead to huge losses if the trade goes against you.
On the other hand, leverage plays an important role when you decide to choose CFD trading on Bitcoins. CFDs are complex instruments. Most new traders lose their money rapidly due to high leverage.
Diversify Your Crypto Portfolio:
For good returns, it is important to diversify your crypto portfolio. Do not focus solely on bitcoins; you should trade other cryptocurrencies too as if your bitcoin trading doesn’t go well, you can still trade other tokens to cover those losses.
Focus on Buy And Hold:
As day trading is an important strategy for bitcoin trading, there are several other trading strategies you should consider.
One such strategy is “Buy and Hold,” in which traders buy bitcoin and hold it until they find a better time to sell it.
It is one of the most common and popular long-term trading strategies. However, you can also make use of this strategy if you’re patient enough to hold your bitcoins for a long time.
Control Your Emotions:
Controlling your emotions can benefit you treating in placing successful trades. However, it might be quite difficult for beginners to control their sentiments.
Never make decisions in a hurry; first, research the market and create a good strategy to trade bitcoin for good returns.
The Bottom Line:
That’s all! This comprehensive guide will help you to a great extent whether you’re trading or buying bitcoin. Above, we’ve listed all the steps which may ease your crypto trading journey.
Overall, Bitcoin holds a good market portion in India. The main reason for its ever-increasing popularity is the shifting of Indian traditional investors to this ever-evolving and more volatile market.
In the end, Bitcoin trading in India adds a great source of passive income for investors.
How Do I Trade Bitcoins?
You’ll need an exchange account, a good trading strategy, and a great understanding of markets to trade bitcoins. To understand the complete process, read this detailed guide.
Can You Lose with Bitcoin Trading?
As the bitcoin market is quite volatile, there is a high risk of losing money rapidly. However, you can maximize the profit chances by using good trading strategies. Don’t invest more than you can’t afford to lose.
Is Bitcoin A Safe Investment 2023?
The money you invest in Bitcoin is subject to market volatility. As a result, Bitcoin is considered one of the very risky cryptocurrency investments. Avoid buying Bitcoin — or any cryptocurrency — if you’re seeking a “secure” investment with guaranteed profits.
What Are Bitcoin ATMs?
You may buy Bitcoin with cash at any Bitcoin ATM and transfer it to a Bitcoin wallet of your choice.
You may also sell Bitcoin and get cash at several of these kiosks. In addition, you can also transfer Bitcoin to someone else’s wallet or account.
What Is The Best Bitcoin Trading Site?
Today, there are several brokerage platforms available for bitcoin trading in India, but finding the right one is always challenging. Some of our top recommendations are WazirX, InvestFw, and CoinSwitch Kuber.
What Is the Difference Between Bitcoin and Bitcoin Cash?
The block size is the primary distinction between Bitcoin and Bitcoin Cash. As a result, the latter can have faster and less costly transactions. In addition, the average cost of a Bitcoin transaction is $59, whereas Bitcoin Cash costs less than a cent.