HomeEducationTrade Other MarketsWhat Is Bitcoin Trading? 

What Is Bitcoin Trading? 

Bitcoin trading comes in two main forms, speculative via CFDs and derivative markets, or actual markets via digital tokens and coins. Bitcoin, unlike most financial markets, does not have ties to any exchange, as a result, these markets are traded 24/7. From its inception, Bitcoin has aimed to change the ecosystem of money and the way we transact with it. Acting as one of the most radical innovators in this space has led to huge volatility and opportunity, creating a lot of profitability for those on the right side of moves. However also creating a loss of capital to those on the wrong side of the coin, no pun intended. 

Is Bitcoin trading for you, how can you become a Bitcoin trader? We explore this and more below.

Guide How to Trade Bitcoin

Looking for trading opportunities in Bitcoin? There are many online brokers like eToro which provide interested investors with the opportunity to not only own tokens but also speculate the markets via CFDs. If you are interested in getting involved in this rapidly moving market, below is the easy process to follow to get started.

1
Min. Deposit
$50
Exclusive promotion
Our score
10
Accepts customers from the USA
Offers 15 crypto coins to buy&sell including BTC, LTC, ETC, NEO and more
Trade on the world's leading social trading and investing platform
Start Trading
Description:
eToro offers a wide range of cryptos, such as Bitcoin, XRP and others, alongside crypto/fiat and crypto/crypto pairs. eToro users can connect with, learn from, and copy or get copied by other users.
Payment Methods
Wire Transfer, Bank Transfer
Full regulations list:
CySEC, FCA

Step 1: open a broker account

Step 2: decide your investment level

Step 3: deposit and start trading

Is Bitcoin Trading Profitable?

Simply put it can be profitable. Traders looking for huge amounts of volatility usually believe Bitcoin trading is one of the types of trading which can provide them with this. The reason why volatile markets are important for traders seeking high amounts of profits is for various reasons. Volatile markets usually create higher amounts of opportunities for huge swings in prices. The swings we see in Bitcoin trading aren’t too frequently seen in others to this extent, which is why those seeking the chance for profitability 

When looking at profitability you need to look at this in comparison to the various other types of trading you could choose to do. Relative to other markets like Forex, or even stocks, Bitcoin trading provides traders quicker and wider moves which equate to a larger level of return for those on the right side of any swings.

Profits also vary on other factors such as how much you will be investing in your account, how many trades you will be making etc. However, for the average Bitcoin trader, who is able to not only find but capitalize on the right trades whilst limiting their losses the potential for generating a profitable income can exist. 

What Does It Take to Be a Bitcoin Trader?

In order to be a Bitcoin trader, there are an array of different skills and resources you are required to have access to. Firstly and most importantly is education. Understanding what moves the Bitcoin market etc. Then comes the processes you must follow, the mentality you must adopt etc. Once you gain the mindset of a Bitcoin trader, you then need the resources. This comes in the form of the capital you wish to invest in order to trade. On average traders look to have an account of between £7000 – £1500. 

Now you have the education and resources, comes the time commitment. Bitcoin traders usually need to dedicate a few hours a day to monitor their positions. The reason why this time is needed as a Bitcoin trader is mainly due to this fact. Although positions are open for shorter, the moves are rapid and time spent in managing these are less compared to a slower, smaller moving market. 

Strategies Used for Bitcoin Trading?

Bitcoin traders usually have different processes they follow in trying to find new trading opportunities. There is a range of strategies that can be used in doing so, and below we will look at an example of this.

In any strategy, the user usually wants to look at several pieces of information before making the decision to buy and or sell. Bitcoin trading strategies are usually fundamental new driven but also some technical analysis can be used, here is an example. 

Breakouts

Bitcoin traders usually target breakouts as one of the most profitable ways to trade. This has been the case especially as the markets started to fall after those highs in 2017. Traditionally when a breakout occurs, the moves create a new high or low before it consolidates at the new level. You can see an example of this a breakout below.

Best Brokers for Bitcoin trading

The best brokers for Bitcoin trading are usually those who offer tight spreads, have a range of liquidity providers, good execution speeds and are generally reliable. Trading Bitcoin which is a volatile market can be risky and expensive, so brokers would need to offer the above and more, to help ease your mind when trading with them at the best cost.

Here is our list of the best brokers for breakout trading:

1
Min. Deposit
$50
Exclusive promotion
Our score
10
Accepts customers from the USA
Offers 15 crypto coins to buy&sell including BTC, LTC, ETC, NEO and more
Trade on the world's leading social trading and investing platform
Start Trading
Description:
eToro offers a wide range of cryptos, such as Bitcoin, XRP and others, alongside crypto/fiat and crypto/crypto pairs. eToro users can connect with, learn from, and copy or get copied by other users.
Payment Methods
Wire Transfer, Bank Transfer
Full regulations list:
CySEC, FCA
2
Min. Deposit
$10
Exclusive promotion
Our score
9.3
24/7 Support for all Traders
Trade Margins, Indices & Futures
Highly-rated mobile app with super low rate fees
Start Trading
Description:
As one of the largest and oldest Bitcoin exchanges in the world, Kraken is consistently named one of the best places to buy and sell crypto online, thanks to our excellent service, low fees, versatile funding options and rigorous security standards -- but this is only part of the story. We’ve been on the forefront of the blockchain revolution since 2011.
Payment Methods
Credit Card
Full regulations list:
3
Min. Deposit
$1
Exclusive promotion
Our score
8.7
FCA regulated crypto exchange with 4500+ digital assets available for trading
Supports users from over 100 countries including the US and Canada
Withdraw your funds using PayPal or other payment methods
Start Trading
Description:
Coinbase is one of the first places that made it easy to buy bitcoin and has since become a widely trusted exchange in the market.
Payment Methods
Credit Card, Debit Card, Euro Bank Account, 3d Secure Credit Card
Full regulations list: