SECRETS OF BITCOIN TRADING STRATEGIES

 

Bitcoin at a Glance

Bitcoin is the first cryptocurrency to be present in the world. Uniquely, this coin has no physical form and is on a network often called Blockchain. At the beginning of its presence in 2010, one of the ways to get Bitcoin by mining using a computer with the ability at that time.

The price of Bitcoin or digital currency when it is the same is only worth a few Rupiah. However, with technology and the total supply of only 21 million, the price of Bitcoin has impressively increased dramatically in 2017 with a value of rp270 million per coin.

In 2021, the price of Bitcoin also managed to reach the latest high around the figure above 800 million. Seeing the rise of the asset, it is not surprising that many people who start to switch to investing choose Bitcoin using a certain period of time. Bitcoin and other crypto assets have now begun to be looked at as investment instruments, so the buying and selling of Bitcoin has also increased.

This amount is certainly based on the principles of supply and demand. There are many ways to profit from Bitcoin, for example by mining it, buying Bitcoin when it is low and selling Bitcoin when it is expensive, or by trading it on crypto exchange exchanges.

What is Trading?

Trading is the activity of buying and selling financial instruments through trading exchanges or brokers that are open for 24 hours. These activities are usually only within a certain time from short to medium term. Of course, the purpose and way this trade works is to get as much profit as possible from the traded instrument.

This activity can be said to be almost the same activity in every existing industry and financial instrument. For example, trading in the world of stocks, forex, and most recently and profitably trading with cryptocurrencies.

If you want to invest long-term in Bitcoin and without actively buying and selling, it is called a holding.

Types of trades

To start trading in the crypto world, let's get to know the types of trading that cryptocurrency traders often use.

Spot Trading

Spot Trading is a trade or trade in buying and selling currencies and digital assets based on daily prices and is usually traded/bought using certain fiat currencies.

Bitcoin, Ethereum and other crypto assets trading steps basically, an investor can only buy, sell and own their cryptocurrency. Therefore, this trade is included in the basic category when entering the cryptocurrency space. Traders will usually look for profit when the crypto they own has reached a certain value. By simply transferring money into the bank accounts of certain crypto exchange exchanges, users can already trade cryptocurrencies.

Margin Trading

Unlike Spot Trading, this Margin Trading uses funds provided from third parties. This allows its users to access a larger amount of capital to be able to take part in trading and improve their position in the market. That way, the profit obtained will also be more than trading with ordinary capital. However, this is also in line with the risks that are also increasing.

There are several terms that are usually used in Margin Trading.

• Margin

Margin has two main definitions. Firstly, it refers to the ratio of profit to income and secondly refers to the money borrowed from the broker to increase investment. The second practice includes buying an asset where the buyer pays only a percentage of the value of the asset and borrows the rest from that broker or trading platform.

• Leverage

Leverage is the use of borrowed funds to increase the potential return on an investment. Leverage is usually displayed in a certain form of comparison for example 1:25 1:50 1:100 and so on. This comparison requires how much capital (margin) a trader needs to get borrowed funds in trading.

Peer-to-Peer Trading

A peer to peer exchange platform can simply be described as a marketplace that we can encounter on a daily basis, where there are sellers who offer assets and then buyers contact the seller to buy the assets they offer. Buying Bitcoin on peer to peer exchange platforms allows you to earn between 1-15% below the market price. This is certainly quite profitable for Bitcoin users. Peer to peer accounts can also be a surefire way to get Bitcoin prices in various countries that may be cheaper than the user's home country.

Copy Trading

Copy trading is one of the services that allows traders to automatically copy trading positions made by expert traders by linking their accounts. Copy trading allows traders especially those who are still beginners to essentially copy the actions taken by expert traders. Beginner traders can link their accounts when they find expert traders registered on the platform that provides copy trading services.

Every position that an expert trader takes will automatically be copied to the trader's copy account. The amount invested in copy trading depends on two things: the amount wagered by the copy trader, and the permissible percentage of the amount that can be invested in one trading activity, as specified in the platform's policy.

Futures Trading

Crypto futures are Derivative Products. Such a product is a contractual form. In essence, futures trading is forming a commitment between two parties to buy or sell an asset at a predetermined date, at a predetermined price. Futures trading is like a bet where it is possible for traders to bet on the future price of an asset. They allow traders to bet on the future price of the asset.

Traders can take a Long position and therefore bet on rising prices, or short positions if they anticipate a decline. To keep the profit or loss of traders it is important to use the take profit or stop loss menu provided.

Traders buy assets on a certain date, and this applies to traders who sell or take short positions as well. At the expiration date of the contract, the parties conclude it, and the contract closes.

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