This digital avalanche of money that is sweeping global investors is not only getting easier, but also riskier by the day. While initially a simple peer-to-peer system for small transactions, it is now being used for large investments and luxury purchases abroad, which has introduced new strategies and uses. How does it really work?
Bitcoin is a currency like any other. Not only can it be used to buy and sell, but it can be used to invest and share, and it can even be stolen. While the initial introduction of the technology came with a desktop program, it can now be traded directly through a smartphone app, allowing you to buy, sell, trade, or even cash out your bitcoins for dollars right away.
Investing with bitcoins has become very popular, and large sums of money are deposited every day. As a new investor, the rules remain the same as for investing with real cash. Don’t invest more than you can afford to lose, and don’t invest without a goal. For each operation, keep in mind certain milestones. The ‘buy low and sell high’ strategy is not as easy to implement as has been claimed. However, a great way to succeed faster when you decide to trade bitcoins is to learn the technicalities. Just like cash investments, there are now several bitcoin charting tools to record marketing trends and make predictions to help you make investment decisions. Even as a beginner, learning how to use charting tools and how to read charts can be a big help. A normal chart will usually include the open price, the close price, the high price, the low price, and the trading range, which are the essential elements you need before making any sale or purchase. Other components will give you different information about the market. For example, the ‘order book’ contains lists of prices and quantities that bitcoin traders are willing to buy and sell.
Also, new investors will often quickly open unprofitable positions. With this, however, remember that you have to pay an interest rate for every 24 hours that the position is held open, except for the first 24 hours that are free. Therefore, unless you have a sufficient balance to cover the high interest rate, do not hold any unprofitable position open for more than 24 hours.
While bitcoin trading still has its drawbacks, such as transactions that take too long to complete and no reversal option, it can greatly benefit you from investing, as long as you take small steps in the right direction.
