Bitcoin trading is common today due to the many benefits attached to it and also how more people are beginning to show interest in trading and investments. It is also because bitcoin is a decentralized currency and it makes transactions across countries easier than ever. There are software and apps available today such as Bitcoin up that makes the trading process easier for everyone, including beginners. However, beyond these apps, there are certain important things every beginner in bitcoin trading should know.

What Every Beginner Bitcoin Trader Should Know

Know Your WHY

Why you want to trade is an important question you must have an answer to before getting started, as it helps you in creating a plan and also keeping you on track in the journey. Are you trading because you want to have another source of income or because you just find it fun? Do you trade to be financially stable or to prepare for retirement? Regardless of what your reasons are, it is important to know them to help you stay motivated and to also guide the decisions you make. Decisions such as what to invest in, how to diversify your portfolio, entry and exit strategies, among others.

Trading Methods

There are different trading methods to help every investor achieve their goals and this includes Day trading, Scalping, and Swing trading.

Day trading involves purchasing and selling within a single day or conducting multiple trades within a day, which is a common practice among short-term traders. They tend to spend a lot of time staring at their screens all day to know the best time to sell and make profits. At the end of each day, they close their trades and continue the following day.

Scalping involves profiting off small price changes. Like day trading, it is also a form of short-term trading but in this case, traders have to wait until a trade is executed and become profitable.

Swing trading is different from day trading and scalping in the sense that it waits a few days to several weeks before capturing gains acquired over time. Swing traders follow the natural swing of price changes and don’t have to monitor their screens all day.

Bitcoin Scams

Bitcoin scams are quite common and there have been different instances over the years when users have gotten scammed of huge amounts. The most recent was the 2020 Twitter Bitcoin scam where hackers made up to $120,000 by hacking the Twitter accounts of high-profile people. However, beyond prominent scams like that, people get scammed all the time in both little and huge ways.

Bitcoin is a decentralized currency and the government or any institution is not involved. This means your security is literally in your hands and if you lose your funds to internet fraudsters, there is no possibility of getting it back.

As a bitcoin trader, you should tread carefully by ensuring your private information, especially your private key, is kept safe. Also, choose your platform carefully and ensure it has proper security measures in place and is also transparent.

iLounge author Lucy Bennett

Lucy Bennett is a Contributing Editor at iLounge. She has been writing about Apple and technology for over six years. Prior to joining iLounge, Lucy worked as a writer for several online publications.