Ready to roll into the world of bitcoin trading?
Bitcoin and cryptocurrencies are making news since the past 2-3 years and with that trading, sites are implementing Bitcoin too. Every Bitcoin trading site is offering extra features to lure crypto lovers. They give platforms for various types of traders to suit their style.
But before that, you need to familiarize yourself with various types of Bitcoin trading.
What are some different types of Bitcoin trading?
4 types of Bitcoin trading that you will get to know ahead in this article are the one that makes the headlines. Every Bitcoin trader should learn the basics of these trading types.
1. Bitcoin CFD trading
Also known as ‘Contract for Difference’, with CFDs you don’t actually buy real Bitcoins. Bitcoin here is the underlying asset. You just buy a contract with fiat currency too. There is no expiry on CFDs.
With CFDs, you can invest a little amount and earn more profit. Start with low leverage first as you learn how to trade.
eToro is the most well known Bitcoin CFD trading app.
2. Bitcoin Binary options
This is simplest of all Bitcoin trading types. All you have to do is to decide if the price of Bitcoin would rise or fall within certain time period.
For example, let’s say the time period is 1 minute, all you have to do is press UP or DOWN. Below is the image from OlymTrade app, where I was about to enter a Long position for 15 minutes –
To avoid losses, some techniques and use of technical analysis are advised.
3. Bitcoin day trading
Bitcoin day trading as the name suggests is valid for only one day. But you can get leverage for example if current leverage is 20x then you can trade 20 times more with your balance. But the risk is real in this type.
If you follow Bitcoin closely and learn from its history, day trading can be mastered. Just be sure when to stop and take profit. Be quick to soak in latest day trading guides for Bitcoin.
GDAX is the best website for Bitcoin day trading.
Understand the risk and follow top traders on Twitter to get inputs.
4. Bitcoin derivatives
Very similar to CFDs, Bitcoin futures have an expiry date(although there are some exceptions) but offer way more leverage than CFDs. Bitmex offers Bitcoin and other altcoin futures with no expiry.
To go Long or Short is up to you. Always maintain a minimum balance to avoid liquidation.