Bitcoin is a highly volatile and popular cryptocurrency. You need to have some knowledge while you want to trade this crypto on a CFD trading platform.
Overview of Bitcoin trading:
This trading is speculating about the movements of the price of BTC or other currencies. It involves buying the coins using an exchange and hope that it will increase with time. Derivatives can be used to check about the falling and rising prices to take advantage of the volatility of Bitcoin.
With platforms such as brexittraders.com, it is possible to know the position of the price of this decentralized currency using CFDs or financial derivatives. It helps to know about the price movements in any direction without actually buying the underlying coins.
What impacts the price of BTC?
Some factors impact the price of the coins. This includes:
Supply of BTC: the supply of this cryptocurrency is capped at a value of 21 million that will get exhausted by the year 2140. This means that there is a limited supply of this product, and its price can increase with the further rise in its demand in upcoming years.
Bad Press: this is any type of breaking news that is related to the value, security, and longevity of BTC. This can have a bad impact on the overall market price of the coin.
Integration: the public profile of the coin depends upon its integration with new banking frameworks and payment systems. If this process is done carefully and successfully, then the demand would increase, and this will have a positive impact on the price of bitcoin.
Key events: Security breaches, regulation changes, and macroeconomic announcements of bitcoin can all impact the price of this coin. Any agreement by the users on how they want to speed up the network can also see confidence in the rise of the coin leading to pushing up the price.
The process of day trading:
Day trading process of trading this cryptocurrency means that you have an open and close for a position during the time of a single day of trading so that there is no market exposure to the coin overnight. This means that there are no funding charges that happen overnight on your position. This strategy can be made for you if you are looking to make some profit using the short-time price movements of this cryptocurrency. This can help you to make a profit by using the daily volatility in the price of this coin.
The process of trend trading: this means that you take a position that matches the recent trend of the market. For example, if there is a bullish trend in the market, then you will go long, and if the market trend is bearish, then you would have to go short. If the trend of the market is reverse or slow, then you should think about closing your position and then make a new opening to match with the emerging trend.
The strategy of Bitcoin hedging: this process means to mitigate your risk exposure by taking a position in opposition to the one that you have opened already. You have to do this if you are concerned that the market is going against you. For example, if you have some bitcoins and you think that there would be a short-term drop in their price, then you have the option to open a short position using CFDs for bitcoins. If the market price of the coin falls, then the gains on these short positions would offset all or some of the losses that you incur on other coins.
HODL strategy of bitcoin:
This strategy involves holding and buying bitcoin. The name is derived by using a misspelling of the word hold that happened by mistake on a form of cryptocurrency. Now it means to hold on for dear life. But this phrase should not be taken very seriously. You should hold BTC after buying only if you have a positive outlook regarding its long-term price. If the research associated with trading shows that you should sell your positions to limit loss or take profit, then you have the option to set stop losses or just automatically close the positions.