Buying and selling bitcoins is probably the fastest and easiest way to try and make some money with bitcoin. The value of the currency fluctuates so much each day, it’s a perfect target for traders.
It’s high risk, high reward and super exciting because absolutely no one knows how high or low this coin can go. Lots of money to be made in trading bitcoin.
We’ll show you the safe ways to trade and give you some great lessons on how to do it safely.
Bitcoin is a digital currency that is generated through mining, a process that involves solving complicated algorithms (blocks) using a computer. Once decrypted, a single block can produce about 50 bitcoins and the time taken to decrypt a single block greatly depends on the skills of the miner as well as how powerful the CPU is. Because the process of mining is long and hectic, most people prefer to buy bitcoins online and since it is a currency like any other it can be spent, invested, saved and also stolen.
There are several ways on how to make money trading bitcoin. Just like the stock market, bitcoin trading involves buying at a low cost and selling when the price has gone up. In order to start trading, you need to set up an account with a reliable online exchange site, then deposit funds into the account. Once your account has been successfully verified you will then need to monitor the trading market for an opportunity to make profit through buying and selling of the bitcoins.
The exchange site will charge you a certain percentage for each transaction, depending on the amount of trade. You will also be able to convert local currencies to bitcoins, and also bitcoins to these currencies. However you must bear in mind that bitcoin currency is highly volatile and if you are not well versed with the trade you may end up losing a lot of money.
You can also decide to trade bitcoins using cryptocurrencies. There are over 40 digital currencies listed on some of the major online exchange sites and you can keep changing your bitcoins into any of these currencies, in a way that makes you realize some profit.
Instead of engaging in the trade yourself, you can also choose to engage the services of a bitcoin trade broker, who will manage your funds, monitor the market, store and trade bitcoins on your behalf.
In a nutshell, an ordinary trading process involves four simple steps which include:
- Creating an exchange account and loading it with funds, which will be used to purchase your first set of bitcoins
- Opening other accounts with some of the major exchanges. This way you will mitigate the risk of losing everything in case your primary account crashes.
- Selecting a trading strategy: There are several ways to trade bitcoins and you may choose to become a day trader, swing trader or one that waits for the market to stabilize. Ensure you choose a strategy that gives you the highest potential to make profit
- Once this is done, you can then start watching the market for an opportunity to make money.
Although bitcoin trading is very easy, the secret is normally not investing any money that you would not afford to lose because, you may be forced to sell your bitcoins at a loss, and the bitcoin economy may crash at any time.
You will also need to think of a secure place where you can safely store your bitcoins. This can be done by yourself using a bitcoin client but only after ensuring that your computer is well secured to avoid losing your money. You can also store them online with your exchange provider, and beware of trading scams which have also become very popular.