InsideBitcoins.com

Bitcoin Trading for Beginners | How to Get Started 2020

We explain how to trade bitcoin step-by-step, review the top crypto trading platforms and explain terminology, tips and strategies.
Avatar
Author: John Ladeluca
Last Updated: 09 July 2020

Want to trade Bitcoin but not sure where or how to start? Our full bitcoin trading guide below will explain everything you need to know about how to get started such as how to select a trading platform like Bitcoin Loophole, deposit and place your trade, as well as essential terminology, tips and strategies you should be aware of before you start trading. By the end of this guide, you will be able to trade bitcoin with confidence.

On this Page:

    Best Bitcoin Trading Platforms

    The first step to get started trading bitcoin is choosing a reliable platform. When starting out with bitcoin trading, we recommend that you opt for a user-friendly, regulated broker such as eToro, especially for U.S. traders. eToro is a highly regulated broker with 6 million users worldwide. Their social trading platform allows beginners to learn from, and copy successful bitcoin traders as well as share trading tips and strategies. If you’ree looking to learn more check out this eToro review.

    For non-US traders, Bitcoin Trader is a fantastic bitcoin auto-trading platform, with an award-winning software that trades Bitcoin on your behalf at an alleged success rate of 90%.

    Our Recommended Crypto Exchange (US Friendly)

    Our Rating

    • 15+ cryptocurrencies available
    • Crypto wallet
    • Accepts PayPal
    • Social and copy trading
    75% of retail investor accounts lose money when trading CFDs with this provider. Cryptoassets are highly volatile unregulated investment products. No EU investor protection.

    Try the most popular auto-trader in 2020! (Non US)

    • 88% Claimed win-rate
    • $/£ 250 Min Deposit
    • Accepts Debit and Credit Card
    All trading carries risk

    How to Trade Bitcoin on eToro (U.S. Friendly)

    Step 1: Registration process

    The first step to trade Bitcoin on eToro is to create your account. The registration process on most bitcoin trading sites is fairly straightforward and only takes a few minutes. Firstly, visit the platform’s official website by clicking on our tables above. Once you’re there, click the “Register” or “Create an account” button.

    You’ll need to complete a form where you’ll need to enter your full name, email, password and phone number. If ever the bitcoin trading site allows registration via Facebook or Google+, you can also take advantage of this option to easily create an account.

    Once you’re done providing your basic information, open your email account and verify your email. Other well-known platforms also require their users to verify their phone numbers.

    Step 2: KYC & Verification

    Many of the best trading platforms in the US and the UK will not require you to verify your identity. In fact, with Bitcoin Trader, you can start depositing, withdrawing and trading bitcoin straight away.

    With brokers such as eToro however, identity verification will be needed. ID verification is typically needed if you want to have higher deposit and withdrawal limits. This is to ensure that the trading platforms’ users are real individuals and not fake people who want to launder money or engage in other illegal activities.

    Some of the documents that you will need to submit are a clear photo of a valid and recent government-issued ID, passport and driver’s license. Moreover, you’ll need to provide either a bank account statement, utility bill or any other document that can verify your address. The address on the documents should match the address you entered when you created your account.

    Step 3: Fund your trading account

    You won’t have a hard time depositing money on bitcoin trading platforms because most of them offer a wide range of payment methods you can choose from.

    On most platforms, you can deposit fiat money through bank transfers. The time it will take for the funds to be deposited in your account will depend on your bank schedule. It can take a few hours up to three business days.

    Debit and credit cards can also be used. Just enter your card’s details such as your name, card number and CVC as well as the amount you’d like to deposit.

    On the other hand, there are also bitcoin trading platforms that only accept other cryptocurrencies as deposits.

    Depositing funds on eToro is very straightforward. Not to mention the fact that you can buy Bitcoin with Paypal as well as Skrill and Neteller.

    Step 4:  Place your first Bitcoin trade

    Once your Bitcoin account are funded, you can now buy Bitcoin and other cryptocurrencies.

    In order to begin trading, choose a currency pair first then decide if you want to have a buy order or sell order. It’s highly recommended that you only trade a small amount of money if you are still a beginner. This is to ensure that you can gain valuable trading experiences without the risk of losing a big amount of money.

    75% of retail investor accounts lose money when trading CFDs with this provider. Cryptoassets are highly volatile unregulated investment products. No EU investor protection.

    How to trade on Bitcoin Trader (Non-US)

    Step 1: Create your account

    The first step to trading bitcoin with Bitcoin Trader is to open your account. You will be asked to fill in a short registration form with your basic details such as name, email and telephone number. The sign-up process takes less than 2 minutes and there is no KYC, which means that you will be able to get to trading much faster than on other bitcoin trading platforms.

    Step 2: Deposit funds into your account

    The next step will be to fund your trading account. The minimum investment required to get started is $/£/€250.

    Step 3: Demo trading

    We recommend you start out with demo trading in order to familiarise yourself with the software and have the best chances of success before risking your capital. Bitcoin Trader’s demo mode gives you access to all the trading functions and you can place trades, the same way you would with live trading. Once you feel confident enough,  move on to step 4.

    Step 4: Live trading

    You’re now ready for live trading. Firstly, adjust your trading settings, which include the amount you want to invest for each trade, the maximum amount per trade every day, your Bitcoin profit targets, the currency pairs you wish to trade with and click on “Save Settings”.

    Once your account is set-up, hit the “auto-trading” button and the bot will get started trading on your behalf. Let the Bitcoin robot work and check on it regularly to make sure you’re on the right track. If you’ve hit your profit targets, you can then choose to re-invest, or withdraw your funds. Withdrawals are processed within 2 working days and customer support is available 24/7 should you require any assistance.

    What is Bitcoin Trading?

    Bitcoin trading is the act of speculating on Bitcoin’s price in order to generate profits. Unlike buying Bitcoin, when you’re trading bitcoin, you’re adhering to a few different criteria.

    For starters, you’re only making a bitcoin buy or sell order with the pure intention of seeking price movement. Thus, you don’t have any intention of using it as a currency. You’re only looking at the asset through the lens of its market movement. An exact parallel is in the foreign exchange market. In the foreign exchange market, US Dollars, Japanese Yen and other global currencies can be bought and sold at fluctuating prices. Although the underlying asset can be used as a form of payment in the economy, in the foreign exchange market, all that is cared about is the price movement of the currency. Bitcoin and cryptocurrencies are the same.

    In order to generate profits, bitcoin traders aim to buy low and sell high.

    What Are the Pros and Cons?

    Pros

    • Low fees – Trading bitcoin involves low fees. Bitcoin trading platforms charge low amounts. Also, withdrawing bitcoin and turning it to cash involves little to no fees. You can send millions of dollars and only pay less than $100.
    • Good track record – Bitcoin is the first cryptocurrency to overcome negative market sentiment. Many international stores now accept it as a payment method. Thus, it will be easy for you to withdraw or spend the bitcoins you’ll get from trading.
    • Lots of bitcoin trading platforms – It is easy to start bitcoin trading with the help of numerous bitcoin trading platforms available worldwide.

    Cons

    • Price volatility – Because of the high volatility of bitcoin, there is a high possibility that you’ll lose a lot of money in case you have a buy or sell order that is against the market trend.
    • Little historical data and support – Unlike stocks, bitcoin has only been around for a decade so there are not lots of historical data you can check out.

    Note: Learn how the cryptocurrency market works and do your research before risking your capital.

    What Moves Bitcoin’s price?

    Bitcoin’s price is highly volatile because it is being affected by a lot of factors.

    Geopolitical events and statements made by governments around the world can affect bitcoin’s price. Negative opinions made by politicians and international organizations can scare bitcoin traders, investors and holders and this can result to a lot of bitcoin sell orders. Because of the high amount of sell orders, bitcoin’s price will fall.

    Shocking news like the bankruptcy of Mt. Gox in 2014 and the Youbit cryptocurrency exchanges in South Korea can also negatively affect bitcoin’s price. Many sell orders also happen whenever news about how bitcoin’s anonymous and fast transactions help drug dealers and child pornography site owners appear on major news platforms.

    Uncertainty of how bitcoin’s price will be in the future, fear of having strict bitcoin regulation and high taxes for cryptocurrency-related activities are also some of the factors that can negatively affect bitcoin’s price.

    On the other hand, news about how more and more people are considering bitcoin as the digital gold helps increase bitcoin’s price. Reports stating the increase of the total number of banks and international institutions that are using bitcoin and other cryptocurrencies also drive bitcoin’s price up. Recently, the successful launch a Chicago-based derivatives exchange CME’s futures contracts for BTC also helped increase bitcoin’s price.

    What are the Best Bitcoin Trading Strategies?

    1. Day trading

    Day trading is the most active trading method you can try. As the name suggests, it involves buying and selling bitcoin within the same day. For instance, you make a bitcoin buy position in the morning then sell it before the day ends. Many professional traders make a lot of money by day trading

    2. Swing trading

    When a trend breaks, that’s when swing traders come in.  This is because price volatility happens after a trend ends. Swing traders create trading rules based on their technical or fundamental analysis.

    3. Scalping

    Scalping is mostly only used by advanced traders. Scalpers take advantage of numerous price gaps that are caused by either buy-sell spreads or order flows. Trading positions made by scalpers will only last for a short period of time because they quickly make buy and sell orders once they’ve calculated that they have profits already.

    Bitcoin Margin Trading and Trading with Leverage

    Bitcoin margin trading enables you to open a trading position with leverage. This is done by borrowing funds from the exchange that you’re using, with some exchanges offering as high as 100x leverage. For example, if you opened a Bitcoin margin trading position with 2x leverage and Bitcoin’s price had increased by 5%, then you would have made a profit of 10% due to using 2x leverage. With no leverage, you would have only made a 5% profit.

    However, if you had opened a position with 2x leverage and Bitcoin’s price had decreased by 5%, then you would have made a loss of 10%. So it’s important to note that margin trading works both ways, allowing  you to gain profits quicker, but also making you lose profits just as fast.

    Bitcoin trading with leverage works by the exchange providing loans to traders which is why it is considered risky for beginner Bitcoin traders. If you’re a new trader and want to start margin trading then we recommend starting small to get an idea of how leveraged trading works, and the risks of it. Ideally, never use 100% of your funds in a single margin trade because if the price goes the opposite way – you could lose all your funds in one transaction.

    Are there Any More Reliable Crypto Trading Platforms?

    Plus500 - UK's no 1 CFD bitcoin broker

    Plus500 Broker

    Plus500 is a regulated CFD broker where you can trade a wide variety of different cryptocurrencies including Bitcoin, Ethereum, EOS, and more. Plus500 requires a verified profile in order to get started on the platform. You’ll require a document for proof of residence, a valid form of identification, as well as a selfie holding your identification to confirm validity. Plus500 is a great option for those in the UK and Australia as it offers access to CFD trading and also provides an intuitive platform where users can manoeuvre between funding, markets, and portfolio positions all on the same trading portal interface.

    Visit Plus500

    80.6% of retail CFD accounts lose money

    24option - Free bitcoin trading signals

    An additional trading platform that has garnered global exposure is 24option.com. The platform has enabled Forex and CFD trading for a wide variety of different assets and currencies, cryptocurrencies included. 24Option is also able to be interlinked with MetaTrader4 which is one of the most popular global cross-exchange trading platforms with advanced charting and position mapping.  Their trading platform enables usage for a variety of markets including global equities, commodities, and even foreign currencies (Forex). The site also distributes free eBooks in the form of educational instructional guides; that applies for learning how CFDs function, how to trade them on the platform, and even an in-depth guide walking through the exchange and its functionality.

    Visit 24Option

    Binance - Regulated crypto exchange

    Binance is a rising contender when it comes to global bitcoin trading platforms; although the platform has catered more towards vetting and processing correct due diligence on any and all assets that are listed on the exchange, the exchange has some of the most varied and extensive lists of tradable assets across all exchanges. It should be noted also that Binance does not require absolute verification to begin purchasing and selling assets on the exchange. This is great if you’re looking to immediately get started with a real-time cryptocurrency account and learn the ropes of trading by starting with a small account. Binance also has a variety of deposit methods, which includes over 100 different cryptocurrencies available for deposit as well as credit card purchase availability. Binance maintains a very easy to use interface when it comes to trading; they also enable an “Advanced” trading portal that can be opened if you’re looking to start more advanced strategies and ‘charting’, which is analyzation of price movements placed on a visual scale, and even create more precise order types.

    Visit Binance

    Markets.com - Low spreads on bitcoin CFD & futures trading

    markets.com logo

    While purchasing actual underlying assets has its advantages, exchanges such as Markets.com have created a very effective blend of traditional equities and derivatives market trading security and cryptocurrency CFDs. The platform, enabled in a variety of jurisdictions, offers interactive CFD trading with an operating entity overseen by a FTSE250 subsidiary; in other words, the exchange has integrated oversight and trading technology that has proven effective in institutionalized markets where billions of dollars, if not trillions of dollars in capital flow safely in and out of the markets on an almost monthly basis. This level of security demonstrates that Markets.com maintains a level of security in their processing that other CFD brokers haven’t caught up with yet; a clear edge for traders.

    Visit Markets.com

    CryptoRocket - Leveraged crypto trading with fast execution

    CryptoRocket has become an important name in the market, not only it is a multi-asset broker that offers access to a vast majority of financial markets, but it is also a pioneer in the crypto trading market. The firm currently offers Bitcoin trading through CFDs, allowing individuals to trade BTC with incredibly fast execution. This fast processing allows trades to be opened and/or closed in milliseconds.

    Disregarding the type of strategy that you are following for your trading, CryptoRockets offer a platform that will suit most types of trading (swing trading, Day Trading, Scalping, etc). If you are interested in a fast and cheap option to trade BTC like a pro, you should consider CryptoRocket as your go-to option.

    Visit CryptoRocket
    For more information about this CryptoRocket you can read our Full Review.
    These are all very reliable trading sites but the risks associated with crypto trading remain. However, trading on reliable platforms can improve your chances of being successful.

    How can I Trade Cryptocurrency in My Country?

    UKUS & CanadaAustralia

    There are a large number of platforms that enable Bitcoin trading within the UK. Plus500 is arguably the best option namely because 1.) It is actively regulated by the FCA, and also 2.) It also enables a variety of different deposit methods including credit card and PayPal. These methods can be linked very quickly and easily within seconds.

    You can also trade Bitcoin CFDs on sites such as Plus500 as mentioned above; Binance is another alternative. Bitcoin trading can be done on Binance if you’re in the UK, however, at the moment Binance is not actively regulated by the FCA, and does not enable trading of any contract products such as CFDs. Rather, you’d be trading actual Bitcoin.

    If you’re interested to try automated bitcoin trading, it’s highly recommended that you check out Bitcoin Trader robot. It’s an automated trading software made by Gary Roberts. By automatically checking the market trends and executing bitcoin buy or sell orders within as fast as 0.01 seconds, it can allegedly help you get profits quickly.

    Bitcoin can be traded in the USA through a number of different methods. If you’re looking to trade Bitcoin by using an investment vehicle, such as a CFD, which is as previously stated a contract for difference, you can do so on eToro. When buying a CFD on eToro, you’re not actually buying Bitcoin itself, rather only its price value, so it can be deemed in many cases, a more efficient vehicle for trading than simply purchasing the asset itself.
    You can also trade Bitcoin in the USA through other platforms such as Binance, however, in cases such as these, you’re rather buying the actual asset of Bitcoin, not just a price representation. Trading strategies can just as equally be implemented, however.

    Residents in US and Canada can also get try automated bitcoin trading through the Bitcoin Trader robot. It’s well-known for helping many traders get a minimum profit of $1,300 per day.

    If you’re in Australia or New Zealand, buying Bitcoin with PayPal may be restricted in some areas. The ideal answer is to utilize Plus500 and its built in PayPal functionality. Through this method, you’re able to link your PayPal account directly to your Plus500 platform account and fund your trading portal directly through this process. PayPal integration is supported through Australia and New Zealand on Plus500, as well as all trading functionalities. In this way, all that’s required is to verify your Plus500 account, add your PayPal account as a funding method, and fund the account. Then, you’re free to purchase Bitcoin CFDs directly on the platform as instructed previously.

    The Bitcoin Trader robot is also recommended for Australians who want to give automated bitcoin trading a try. The trading signals from this trading software is said to give traders up to 88% possible return.

    Bitcoin Trading Tips and Things to Avoid

    Tips

    • Cut your losses – Use stop losses and make sure you have exit strategies on a position.
    • Use margin responsibly – Margin trading, lets you trade Bitcoin with more money than you actually have. This means you can make gains faster, but it also means you can lose money faster. Use this margin responsibly.
    • Use programmatic strategies – If you learn to code, a whole new field of trading Bitcoin can be opened. Through certain algorithms that trade based on finite parameters, there are a plethora of different opportunities when it comes to both analysis and execution that is possible when engaging in programmatic trading.
    • Learn different methods – Expanding your knowledge as far as trading strategies, utilities, and methods will only help you in making the most money trading Bitcoin.
    • Size your positions accordingly – Ensure that whenever you’re trading, you’re putting the correct amount of money into a trade, but also that you’re keeping tabs on specific sizing methods.
    • Stay up to date on updates and technological changes – Bitcoin and bitcoin  trading employs tools and different types of technology that is constantly changing. Try to stay current with new tools, updates, and frameworks that are being released.
    • Find the best brokers tailored for you – Each person has their own trading style and individual methods they develop. Find brokers/exchanges that are the best suited to your trading needs.

    What to avoid

    • Trading based on emotions – One of the biggest mistakes a trader can make is trading immediately off of emotions or feelings. This can lead to large losses and irrational movements; the best traders trade strictly without emotion.
    • Not using demo accounts – Almost all exchanges, especially ones that support CFD trading, implement “Demo” accounts which are accounts that allocate imaginary money to your trading portal for you to play with. If you are a novice trader and yet you don’t take advantage of demo accounts to practice trading using fake money, then there is a high chance that you’ll lose real money in no time at all.
    • Not reading company news – Cryptocurrency prices and volume can be heavily reliant on company news and releases. If Ripple releases an announcement that XRP will be used as the main currency at Santander, that will definitely shift prices upward; staying up to date on this news is important if you plan to buy Ripple.

    How Much Can I Make?

    How much you can earn by trading bitcoin largely depends on your trading experience, industry knowledge, capital, total time allocated for bitcoin trading, patience and trading strategies.

    According to a Cointelegraph report, 95% of bitcoin traders fail. This is largely because many of them thought that they can easily make money by trading bitcoin. However, this is not the case. In fact, the cryptocurrency market is deemed as one of the most difficult markets for beginners. The high volatility of the market also mostly doesn’t help newbie traders.

    Also, Cointelegraph stated that professional bitcoin traders can turn $10 into $1,000 through leveraged trading. However, this is something that is not easy to achieve.

    If you think that bitcoin’s price will go over $20,000, you can also be a long-term holder and invest $1,000 once its price is at $10,000. By doing so, your $1,000 will become $2,000 once bitcoin’s price reaches $20,000.

    What is the Difference Between Trading and Buying Bitcoin?

    Trading

    • Associated with quicker, shorter term positions (Seconds, minutes, hours, days)
    • Brokers enable trading with margin through CFDs
    • Trading using leverage requires less capital to get started
    • Trading is usually associated only strictly on price reliance. It does not use the underlying asset for utility
    • Considered riskier than buying the asset outright

    Buying

    • Buying outright enables cryptocurrencies to be owned, sent, and received
    • Considerably less risky
    • Buying outright is associated with longer terms – weeks, months, years
    • Brokers don’t enable purchase outright of an asset on margin; rather you’d have to seek a bank or loan provider
    • Leverage cannot be used on brokers in an outright purchase
    • Buying outright requires larger minimums usually

    Want to Trade on the Go? Top Bitcoin Trading Apps for 2020

    As we enter 2020 and the virtual currency market keeps moving forward, there are some crypto-related applications that every single trader and crypto enthusiast must try at least once. Some of them are going to help users trade digital assets, while others will be helping investors to keep track of their portfolio.

    The next bull run in the crypto space will attract new investors and users to the space. Thus, having applications that advanced and inexperienced users can download is always an advantage. In this article, we have reviewed and ranked a number of bitcoin apps currently on the market. Read on to find out which bitcoin apps we have found to offer real advantages when it comes to cryptocurrency trading.

    Robinhood - Commission free bitcoin trading

    Robinhood allows individuals to buy stocks, ETFs, options and cryptocurrencies. This is one of the favourite applications for millennials in the US market. Robinhood’s main feature is that it does offer its services based on a commission-free scheme.

    Pros:

    • Accepts US customers
    • Offers trading services without fees
    • Easy to use
    • Great option for newcomers
    • Offers support in a large number of US states

    Cons:

    • It doesn’t offer crypto-wallet services
    • It only offers support for US users

    Visit Robinhood

    Cash App - Buy and sell Bitcoin in seconds

    Cash App is one of the most popular applications for buying and sending Bitcoin. Users that have funds on their accounts can simply purchase the most popular digital asset in just a few clicks.

    Pros:

    • Simple to use
    • Could Support the Lightning Network in the future
    • Good for beginners

    Cons:

    • Only offers Bitcoin support
    • Low sending limits

    Visit Cash App

    Abra - All-in-one exchange and wallet supporting 28 cryptocurrencies

    Abra is a cryptocurrency wallet and exchange that aims to become an all-in-one tool that helps users manage crypto and fiat currencies. The application allows users to buy and sell cryptocurrencies from their wallets. Abra supports 28 virtual currencies and more than 50 fiat currencies. In the future, there might be a larger number of coins added.

    Pros:

    • Support a large number of cryptocurrencies
    • Includes support to several fiat currencies
    • Innovative interface
    • Provides flexibility to users

    Cons:

    • Spreads apply
    • No advanced tools for traders

    Visit Abra

    Blockfolio - Track and monitor a vast selection of virtual currencies

    Blockfolio is different than the previously listed applications. This one is not a wallet, it is just a portfolio management tool. This application allows users to easily track and monitor a vast selection of virtual currencies. All the information about prices can be gathered from different exchanges, providing a better user experience.

    Pros:

    • Offers free services to users
    • Investors can add multiple portfolios
    • Automatic backup

    Cons:

    • It does not offer web support
    • It only works as a portfolio

    Visit Blockfolio

    Recommended Bitcoin Trading Books for Beginners

    If you are a newbie to the world of BTC trading or trading in general, check out the bitcoin trading books below.

    1. Cryptocurrency Trading Indicators by J. Kelley II
    2. Cryptocurrency Trading Journal by Crypto Traders
    3. Swing Trading: Learn How to Generate Profits, Using Money Management, with the Best Strategies for Beginners to Trade Stocks, ETFs, Options, Futures, Currencies and Cryptocurrencies by Daniel Kusmich
    4. Bitcoin and Cryptocurrency Technologies by Keizer Soze
    5. Investing for Beginners, Swing Trading, Options trading by Carl Hitoshi
    6. Forex and Cryptocurrency Trading by Jay Ross
    7. Crypto Trading for Beginners by D.K. Livingston
    8. How to Trade for a Living by Bryan Lee
    9. The Crypto Trader by Glen Goodman
    10. Cryptocurrency Investing for Dummies by Danial

    What are the Best Courses?

    If you also want to learn through the tips and tutorials made by expert cryptocurrency traders, below is the list of the top cryptocurrency courses you can consider buying.

    1. Crypto Investing Pro ($600 per year)
    2. Tai Lopez Bitcoin Crypto Academy ($1,500 per 8-week program)
    3. Crypto Investing Insider ($97 per month)
    4. $20 Bitcoin Blueprint by Agora Financial (offers free ebook and costs $49 per year)
    5. Cryptocurrency Fundementals: Buy, Sell, Trade Cryptocurrency (available on Udemy for $94.99)

    Terms that you Should Know

    Exchange

    A cryptocurrency exchange, also known as digital currency exchange (DCE), is a marketplace to exchange and trade crypto coins.

    FIAT

    A fiat currency is a national currency that has a value backed by the issued government. Most fiat currencies are backed by gold or other precious metals.

    Whale

    A cryptocurrency whale is a term to describe an entity or individual that holds a large amount of certain cryptocurrency.

    Limit order

    A limit order is an order that enables traders to buy or sell a cryptocurrency pair at a specified price or better. A trader will place a limit order to buy below the market or sell above the market at a certain price.

    Market order

    A market order in the cryptocurrency market is an order to buy a certain digital asset immediately at the best available price.

    Going long

    A long Position is the action of purchasing a certain cryptocurrency pair with the intention to sell the pair later at a higher price.

    Going short

    A short position is a trading technique in which a trader sells a certain cryptocurrency with plans to purchase it at a higher price.

    Bullish

    A bullish is a term to describe a person who believes that the crypto market or a certain crypto coin is expected to rise.

    Bearish

    A bearish is a term to describe a person who believes that the crypto market or a certain crypto coin is expected to fall.

    Altcoins

    The term Altcoins simply refers to any cryptocurrency other than Bitcoin.

    Tokens

    Crypto tokens are cryptocurrencies that have been created through an Initial Coin Offering (ICO) process. They are used by startups and large companies in order to raise funds.

    ECR-20 Tokens

    Like other blockchain assets, ECR Tokens are digital assets that can be used as a payment method on the Ethereum platform only.

    ICO

    ICO, also known as Initial Coin Offering, is a type of fundraising using digital tokens. ICO is equivalent to IPO (Initial Public Offering) in the stock market.

    IPO

    Initial Public Offering (IPO) is a fundraising process in which shares of the company are sold to the public in return to a share of the company.

    Fork

    A fork is basically a software upgrade to a certain blockchain network of a cryptocurrency. The most well-known fork happened in the Bitcoin blockchain network and has created Bitcoin Cash and Bitcoin Gold.

    ROI

    Return on investment (ROI) is a ratio or percentage value that measures the profitability of a certain trade.

    Market Cap

    In the cryptocurrency market, the market cap is defined as the circulating supply of a certain crypto coin multiplied by its current price.

    TA

    Technical analysis applies to cryptocurrencies the same as it applies to any other security. TA is used to predict future price movements of a specific cryptocurrency or the crypto market in general.

    MACD

    The Moving Average Convergence Divergence (MACD) is a popular technical analysis indicator that helps traders to identify patterns in the market. MACD was designed to reveal the strength and momentum of a trend.

    Bollinger Band

    Bollinger Bands is another popular trading indicator used by cryptocurrency traders to predict price movements. Bollinger Bands indicator is effective in the crypto market as it measures the volatility of the underlying asset.

    Mining

    Cryptocurrency mining is a process in which transactions are verified and added into the blockchain ledger.

    Blockchain

    Blockchain is the technology behind every crypto coin in the market. In simple terms, blockchain records chains of transactions, which ensures security, transparency, and decentralization.

    Software Wallet

    A software wallet is simply a program that allows users to store cryptocurrencies. The software interacts with the blockchain network to enable users to send and receive digital assets.

    Hardware Wallet

    A hardware wallet, also known as a cold wallet, is an external hardware device that allows users to store cryptocurrencies. It is considered the safest way to protect and store digital assets.

    Paper Wallet

    A paper wallet is an unsecured method of storing bitcoin that has been used by crypto users between 2011 and 2016. Nowadays, a paper wallet is considered an irrelevant tool in the crypto market.

    Final Thoughts

    While there is definitely an opportunity in being successful with trading cryptocurrency, there is just as much the potential for the complete opposite.

    This means that although it is possible to trade cryptocurrency and become wealthy from it, it is also possible that while trading with bitcoin pro or any other platform, you lose substantial amounts of your portfolio.  For this reason, it is important to use a reliable platform such as those recommended in this guide. We would also recommend that you read and research the topic well before investing, as trading carries risk.

    Our Recommended Crypto Exchange (US Friendly)

    Our Rating

    • 15+ cryptocurrencies available
    • Crypto wallet
    • Accepts PayPal
    • Social and copy trading
    75% of retail investor accounts lose money when trading CFDs with this provider. Cryptoassets are highly volatile unregulated investment products. No EU investor protection.

    Try the most popular auto-trader in 2020! (Non US)

    • 88% Claimed win-rate
    • $/£ 250 Min Deposit
    • Accepts Debit and Credit Card
    All trading carries risk

    FAQs

    What is the best site to trade cryptocurrencies?

    There is a plethora of different sites and exchanges that you can utilize to trade cryptocurrencies. One of the most interactive and customizable platforms for trading cryptocurrencies is Plus500 due to its global appearance as well as hybrid structure in enabling trading of CFDs as well as underlying asset purchasing.

    Can you get rich trading cryptocurrencies?

    People in the past have in fact gotten rich off of trading cryptocurrencies, however, it is far from a safe and low-risk method of generating larger profits. Trading cryptocurrencies is speculative and reliant upon your own doing.

    What is the best cryptocurrency to trade?

    There is no strict or explicit cryptocurrency that is the best to trade. Bitcoin and Ethereum are majorly the two underlying assets that are paired when trading cryptocurrency, however.

    Can I trade cryptocurrencies in the US or UK?

    Yes - there are no laws that restrict trading cryptocurrencies in the US or UK.

    How much do I need to get started trading cryptocurrencies?

    To get started trading cryptocurrencies, you don't need to have that large of an account. It is generally recommended to get started with around $250 or so; however, keep in mind that with additional margin and financial products such as CFDs, you can trade cryptocurrencies with even larger amounts.

    Is bitcoin trading safe?

    Cryptocurrencies are very volatile assets that are not regulated on the majority of exchanges they are enabled. Cryptocurrencies are in no way zero-risk assets and carry a higher degree of volatility and risk than other assets or currencies.

    Can I use Metatrader to trade cryptocurrencies?

    Dependent on your broker and exchange, you can more than likely link Metatrader to your account to begin using Metatrader as a link to trading cryptocurrencies. It's best to check beforehand with your broker, however.

    How can I be a better cryptocurrency trader?

    When it comes to bitcoin trading, practice is essentially what makes perfect. You will only improve your general skills and be a better overall trader by trading more; use practice accounts, demo accounts, and utilize the informational guides and tutorials that are available on InsideBitcoins.

    What is the best bitcoin trading strategy?

    This is very subjective, mainly because there is no singular cryptocurrency strategy that is better than the other majority strategies. The greatest strategy and the ones that make traders the most money are the ones that they tailor themselves and begin to comprehend in their own light.

    How long does it take to become an expert at trading cryptocurrencies?

    With proper dedication and the right diligence, it doesn't take long to get the hang of trading cryptocurrencies. It simply requires a long string of work and dedication in the singular sector.

    A-Z of Trading Pages

    ABCDEFGHIJKLMNOPQRSTUVWXYZ#
    Remember, all trading carries risk. Past performance is no guarantee of future results.
    Avatar

    John Iadeluca is the founder of the Wall Street hedge fund Banz Capital. He's a blockchain developer, quant, and consultant that specializes in the digital asset sector. He is an authority on blockchain and has written for a number of publications including Forbes.com.

    44 thoughts on “Bitcoin Trading for Beginners | How to Get Started 2020

      1. Hello Ari009. Thank you for your question. The answer to this question is not as straight forward as you might think. If you are wondering how easy it is to get into bitcoin trading alone, then yes, it really is that easy. All you have to do is choose the platform you prefer and sign up on it, it really does take a few minutes to get into it. If your question is more linked to whether newcomers can make profits, then that is more of a tricky one. The answer would be yes, you can make profits, but as you probably already know, even the most experienced traders often experience heavy losses that they have to recover from and that is because online trading is not stable and it’s often unpredictable. So it is risky and making profits is not easy, but anyone can do it if they put their mind to it and make the effort of doing the appropriate research before trading.

      1. Hello lo57. Thank you for your question. Yes, MetaTrader4 certainly is among the best trading platforms out there. 80% of all the most trusted brokers use it as a trading platform firstly because of the reputation preceding it. Other than that, MT4 also has a remarkable trading interface that is suitable for both beginners and experienced users. Beginners can benefit from it because it is very intuitive and you can learn how to use it within a few minutes, even if you are not familiar with it. At the same time, more experienced users can benefit from the trading platform because it offers all of the tools and functionalities they need to pursue more complex investment strategies, including trading charts, history, financial news and so on. I hope that helps.

      1. Hello kat43. Thank you for your question. There are quite a few reasons why trading bitcoin is a good idea. First of all, it is currently the biggest and most popular cryptocurrency out there and quite a few people have made significant profits trading with it. Of course, there are risks associated with it, but you really can make money with it. Other than this, Bitcoins cannot be falsified or have duplicated entries. It is also very transparent, in the sense that transactions can be monitored through the distributed ledger, also known as blockchain. Many well-reputed companies, such as eToro, currently back Bitcoin as well as other cryptocurrencies, meaning that they are now as easy to find as any other popular stock. So as long as you are on a well-established and trusted broker, you will definitely be able to find cryptocurrencies on offer.

      1. Hello pol79. Thank you for getting in touch. Yes, there are a few criteria you can base your decision on. First of all, have a look at what are the platforms out there that offer bitcoin as a trading option. Nowadays, that is probably most of them, so you will probably have to narrow down your search. We recommend looking for fully regulated platforms such as eToro. The most trusted regulatory agencies are the FCA, ASIC and CySEC so if you find a platform regulated by one of those agencies, that is definitely a good sign of their reliability. Other than that, we recommend to look for platforms with smooth and easy sign up processes, a good asset variety as well as low fees and a good variety of payment options. Asset variety is a very important characteristic because we recommend not to trade with bitcoin only, but to diversify your trades as much as you can.

      1. Hello hen38. Thank you for your question. Liquidity basically refers to how slow or how fast an instrument can be bought or sold. When an instrument, like Bitcoin in this case, has high liquidity, it means you will be able to buy it very quickly, whereas when an asset has low liquidity, you will have to wait before you can purchase it. An example of an asset with particularly low liquidity are penny stocks. I hope that answers your question.

      1. Hello julan8. Thank you for your question. Trading bitcoin is very simple. All you have to do is sign up to a trading platform, possibly a trusted one like eToro. You will be required to type in some personal details whenever you sign up on a platform. You normally have to include your full name, email address, country, password and then you are required to accept the terms and conditions. After that, regulated brokers normally require you to verify your identity by providing all of the appropriate documentation, including a copy of your passport and a bank statement to verify your address. It usually takes a few days for your verification to be processed. Once that is done, all that’s left for you to do is deposit your funds and then access your trading space. To trade bitcoin, you can search for “cryptocurrencies” or “bitcoin” on the search engine of the platform. You can then select it and click on “buy” to start trading it. I hope that helps.

      1. Hello tor51. Thank you for your question. The negative side of bitcoin trading are the risks associated with it. Bitcoins are part of a decentralised market, which makes them particularly volatile. When we say volatile, we mean that its value often increases and decrease suddenly, and it is fairly complicated to predict. That is why we recommend particular caution whenever you trade bitcoin. A good way to face these risks is to always invest amounts that you are willing to lose and that would not have an impact on your financial circumstances. Another way to deal with the risks is diversifying your trades as much as possible. We recommend not to trade bitcoins only but to place investments on as many assets as you can so that if one trade goes wrong, you will have other investments to limit your losses.

      1. Hello mil06. Thank you for your question. We recommend using eToro to trade bitcoin if you are based in Europe. The platform is available in the vast majority of European countries so it most likely that it will be available in yours. We recommend eToro in particular because it is a fully regulated broker with over 10 million users worldwide. Some of its main characteristics are a quick sign up process, an efficient verification process, a simple trading interface, great asset variety and a good variety of payment methods. The most important feature offered by the platform though, is the copy trading option. You are basically allowed to place the same trades as the ones placed by top investors on eToro. It is a great opportunity for beginners because they can get a chance to speed up their learning process and start developing their very own bitcoin trading strategy.

    1. I thought about starting to trade bitcoin lots of times but never gotten to the point of signing up on an exchange. thinking of doing it now though!! how do I start bitcoin trading on binance??

      1. Hello ale99. Thank you for getting in touch with us. Trading Bitcoin on Binance is fairly simple and the sign up process is quite fast because it does not require in-depth verifications of your account. You are only required to provide proof of your identity. To sign up on Binance, you will have to go on the official website and click on “sign up” at the top right side of the page. You will have to type in your email address and create a password. You will also have to add your phone number and full name. Once your account is verified, you can move on to the deposit stage. Once you have selected your deposit amount and chosen your payment method, you can make the deposit. After that, you can finally start trading Bitcoins. To do that, you will have to access the trading platform and have a look through the asset list to find currency pairs that include Bitcoin. You can then select on the one you prefer and start trading with it.

      1. Hello nal30. Thank you for your question. Between the two platforms, we definitely recommend going for eToro. Even though they are both excellent platforms to trade bitcoin, eToro is one step ahead. Evidence of that is its regulatory status. eToro is in fact regulated by some of the most trusted regulatory agencies available, CySEC, FCA and ASIC. The agencies are constantly monitoring the platform’s activity to ensure the protection of users. Other than this, the broker is very simple to use, has a much wider asset variety than what 24 Option has to offer and has lower fees as well. If you are indecisive between the two, eToro certainly is the right way to go.

      1. Hello pas534. Thank you for your question. The major risk of bitcoin trading is capital loss. Bitcoin and all other cryptocurrencies are known to be very volatile because they are associated with a decentralised market that is independent from financial institutions. This means that the fluctuations of their value and price is often unpredictable so placing profitable trades is not always easy. For this reason, we always tell are users to be extra careful when trading with Bitcoin and other cryptocurrencies because of the risk of capital loss. There are a few things you can do to limit such risks, one is diversifying your trades as much as possible, the other is to only invest amounts that you feel ready to lose and that will not affect you in any way. I hope that helps.

    2. Hello. Thank you for the review. I found it very helpful. I was wondering though, could someone please explain how to trade Bitcoin on Markets.com? I just created an account and I feel completely lost.

      1. Hello Liam. Thank you for your question. So, once you’ve created your account, you are required to verify your identity. You will have to provide a copy of your passport and a bank statement with your address written on it to confirm that the one you provided is correct. It will probably take a few days for them to verify your identity. After that, you will have to deposit your initial funds into your new account. Once you’ve deposited your funds, you can finally start trading Bitcoin. To do that, you will have to access the trading asset, go on the search engine of the trading space and type in “bitcoin” and then click on “buy”. It really is as simple as that.

      1. Hello Esther. That is definitely a difficult question to answer. The thing is that profits depend on a variety of factors. First of all, they depend on how much you invest. The more money you invest the larger are the potential returns but also the bigger are the risks of losing funds. It also depends on how much you diversify, investing all of your money in one cryptocurrency is never a good idea because if that investment goes wrong, you will lose all of your funds, whereas if you invest in several assets, you might lose a couple of them and win the rest. What I can tell you for certain though, is that some people became millionaires trading bitcoin so there actually is no limit to how much you can make. I hope that helps.

      1. Hello Paula. Thank you for your question. MetaTrader4 is one of the most popular trading platforms that many brokers use to support trades. Around 80% of the brokers online use it as a trading platform and it is famous because of its ease of use, which makes it perfect for beginners. On top of being so simple to use though, it also maintains all of the more complex functions that more experienced users need to pursue more complex investment strategies. MetaTrader4 can be downloaded on your desktop or on your phone and you have to type in your credentials to access it through your broker account. Bitcoin is of course available among the assets listed on MetaTrader4. I hope that answers your question.

    3. Hello there. It seems to me like you would recommend eToro over all the other platforms to trade Bitcoin. I’ve been thinking about what platform to sign up on to begin my Bitcoin trading experience but I could not decide which one. Why do you think eToro is so much better than the others?

      1. Hello Brad. Thank you for your question. There are quite a few reasons why we believe eToro to be one of the best platforms out there. The first one is that it is a CySEC-regulated platform, which certainly adds reliability to it. It is also known for its efficiency during the verification process. It only takes up to a couple of days to verify your identity once you’ve signed up. Other than that, it has a user-friendly interface, a good asset variety and it offers quite a few payment methods to choose from. One of the most important features offered by eToro though, is the copy trading option. Not many platforms out there offer it. It basically allows you to copy the trades places by some of the best investors on eToro. This makes it a great feature for all kinds of users.

      1. Hello Hans. Thank you for getting in touch. We recommend doing long term investments on eToro. Trading one time and hoping to make profits is usually not very realistic, the best thing to do is invest for the long term. This way you will definitely be able to ride out most of the bumps along the way. Another important thing to remember is to diversify your investments. We recommend to never invest in Bitcoin only, but to trade with several assets to limit your chances of losing funds. These two things are very important to keep in mind whilst trading. Good luck!

      1. Hello Yona. Thank you for getting in touch. Trading Bitcoin can definitely be a highly profitable activity and some people have become rich trading with it. However, you should keep in mind at all times that it is considered a risky activity that can result in loss of funds. The best way to prevent that is to spend enough time doing your research to place investments and to trade on trusted and well-reputed exchanges. I hope that answers your question.

      1. Hello Jack. Thank you for your question. I think a lot of it depends on your level of online trading experience. If you do not have much, we would recommend having a look at auto trading robots. They are based on extremely sophisticated technologies that allow the platform to carry out the market analysis for you and to place the most profitable trades in complete automation. All you have to do is spend a few minutes a day to modify the settings but that’s it.

        We suggest having a look at our bitcoin robot page if you are considering opening an account on an auto trading bot. For cryptocurrency platforms, you will most likely have to spend more time on it. To make the right investments you will have to do your research, read financial news and so on, and that can take hours. There are relatively new kinds of platforms like eToro though, where you have the option of copying the trades places by top ranking investors. Doing that would definitely save you a lot of time. I hope this helps.

    4. Hi there. Thank you for this review, it really helped me understand a few things I had no idea about. I was wondering, what would you say is a good starting amount to begin trading cryptocurrencies?

      1. Hi Elli123. Thank you for the kind words. I would say that a good starting amount to begin trading cryptocurrencies would be around $250. Most trading platforms, and by that I mean both auto trading robots and brokers, require a minimum deposit of $250 to give you access to their trading spaces. That means that without that amount you won’t even be able to start trading. Of course, having more as back-up would be advised in case you were to lose your money and wanted to try and get it back.

    5. Hi. I read I’ve been reading online and I found very contrasting information. Which is better to trade bitcoin, Plus500 or eToro?

      1. Hello Harriet. Thank you for your question. We are aware that finding the right information available online can be very confusing. That often depends on the legitimacy of the review page you’ve consulted or on the way the platforms have been tested.

        We’ve accurately tested both eToro and Plus500 and found them to be equally legit. It is hard to tell which one is better because both have their strengths and their weaknesses. They are both very similar in terms of sign up process and security measures, such as the documentation required to prove your identity and the personal details you have to provide. In terms of trading experience, they both use highly sophisticated software that definitely can make you earn money.

        I think what will help you make your decision is in the detail. eToro has a special feature that Plus500 is lacking and that is the “copy trading” option. If you are an inexperienced trader, you can always choose to copy the investments made by the highest ranking traders using eToro, and that is definitely a feature that has to be taken into consideration.

        Plus500 on the other hand requires a minimum deposit of $100 while eToro requires $250. Plus500 also offers over 2,000 assets to choose from while eToro does not have anywhere near as many. If you want to find out more about them, you can check our both our eToro review and Plus500 review. In general, both options are really excellent, and no matter what you choose you are in safe hands. I hope that helps.

    6. Hi there. Thanks for this review, I found it really helpful. Would you say that trading Bitcoin can be more profitable than trading with any other cryptocurrency? Also, does trading Bitcoin involve less risks than trading with, say, Ripple?

      1. Hi. It’s important to remember that trading with Bitcoin or any other cryptocurrency carry the same amount of risk. The market of cryptocurrencies is highly volatile and investing in it can result in a loss of funds. Similar profits can be made trading with any cryptocurrency, including Bitcoin. I hope this helps.

    7. From your opinion, what would be the best reason for trading Bitcoin? I like the idea of higher rewards. Are you worried about the risks?

    Leave a Reply

    Your email address will not be published. Required fields are marked *

    X

    eToro: Buy Bitcoin with 0% Commission

    eToro: Buy Bitcoin with 0% Commission

    eToro: Buy Bitcoin with 0% Commission

    Visit eToro

    Cryptoassets are highly volatile unregulated investment products. No EU investor protection.

    eToro: Buy Bitcoin with 0% Commission
    Visit eToro

    Cryptoassets are highly volatile unregulated investment products. No EU investor protection.

    X