Bitcoin trading holds a lot of potential as well as risks for the trader due to the volatility of the market. The market has seen some massive gains as well as drops which could pose a win or loss for traders depending on the time they buy/sell their tokens.
Knowing your risk tolerance, as well as understanding when to buy and sell, is key in making reasonable decisions when it comes to trading Bitcoin on cryptocurrency exchanges. Implementing the most profitable and risk-managed strategies through a technical and fundamental analysis of the market would go a long way in shifting the odds to the trader’s favors.
For an individual looking to start trading in Bitcoin, a storage wallet is necessary to hold the cryptocurrency asset. There are various wallets available, whether hardware or software, which offer storage features for the trader. These bitcoin wallets don’t hold the actual tokens but help store the private keys necessary to access a public bitcoin address and grant transactions.
Hardware wallets is an offline physical storage system for private keys, this is the safest way to store information regarding your cryptocurrency assets. This is due to the fact being that they can’t be hacked because the information is kept offline and inaccessible to prying eyes. Some of the best hardware wallets available for a trader include Ledger Nano S, Ledger Nano X, Trezor One and KeepKey to name a few.
Software wallets are programs or applications which can be run on a computer or a mobile device, these are easy-to-use and convenient but poses a security risk because they are connected to the internet and could run the risk of being hacked or compromised. These kinds of wallets are however secure and provide a relatively higher ease-of-access for traders looking to store and use their cryptocurrency assets.
They are also called hot storage wallets because they are connected to the Internet. Software wallets include mobile wallets, web wallets and desktop wallets, with the only difference being in the platform of use.
Mobile wallets can be installed and used on a smart mobile device, whether Android or iOS based, some popular choices include Blockchain Wallet, Mycelium and Bread to name a few.
Desktop wallets are applications that can be downloaded and installed on a computer, they are compatible with many operating systems, easy to use and provide more security than web wallets. Established examples include Copay, Electrum, and Atomic Wallet.
Web wallets are those wallets that run on a web browser and have a cloud storage system. They don’t require any installation of any additional software or acquisition of any hardware device and are much easier to access and use. The best web wallets include Coinbase, Copay, GreenAddress, Blockchain.info and several others.
After securing a wallet, the next thing would be to choose a bitcoin exchange platform to buy and trade Bitcoin. Some of the top Bitcoin exchanges available in the U.K. include CEX.io, Coinfloor, Bitfinex, Kraken, eToro, Bithoven, Coinmama, Binance and Coinbase.
A trader can then proceed to open an account with any of these platforms and trade Bitcoin based on the current market price. These exchanges act as an intermediary and usually charge a fee on transactions made. While some of these exchanges offer fiat trading pairs (USD-BTC or AUD-BTC), others only allow cryptocurrency trading pairs.
For an individual to delve into trading Bitcoin, it is advised that prior knowledge of how the cryptocurrency asset works be obtained. This will be crucial in making decisions that can either make or break an investment. There are resources online for a trader new to this to explore and make reference to, or a financial advisor can be employed to help make smart trading decisions.
You can trade bitcoin with trading software and make some capital gains or losses depending on how you control the investment.