Bitcoin Day Trading 2018 – Tutorial and Brokers

Bitcoin Day Trading 2018 – Tutorial and                                    Brokers

What Is Bitcoin? Why Day Trade Bitcoin?What You’ll Need To Start Trading

Step 1 – Find out the price
Step 2 – Pick a broker
Step 3 – Capital
Step 4 – Bitcoin strategies Risks Last Words

What Is Bitcoin?

Bitcoin is part of the emerging cryptocurrency market. Whilst cash is made of paper, bitcoins are basically clumps of data. Scrapping the bank or governmental middle man that act as an intermediary for your money, cryptocurrencies enable the transfer of money directly between individuals, utilising secure blockchain technology.

The blockchain is a secure ledger of transactions. Digital coins can be mined by processing complex mathematical algorithms. The blockchain network records each transaction, securing the entire process – but crucially – speeding it up. Charges are made per transaction.

Bitcoin was the first cryptocurrency to utilise the technology, and subsequent growing pains have led to ‘forks’ in the process. This resulted in the introduction of Bitcoin Cash. Other currencies then tried to improve the process, both in terms of speed, but also, costs and energy requirements. Ripple, Ethereum & Litecoin all claim to be superior to Bitcoin. The vast wealth of bitcoins are held in the hands of a few, so bitcoin is bought in fractions as low as one-hundredth of a million, which equates to just less than one-tenth of a cent currently. This means anyone can dabble and explains the boom in bitcoin trading volume per day.

The current cryptocurrency market is estimated to be worth around $148 billion, but analysts believe that figure could climb to a staggering $1 trillion by 2019. This makes day trading bitcoin in 2017 an appealing proposition. Bitcoin makes up half of the cryptocurrency market and Roger Ver, Bitcoins CEO, believes ‘it’s the dawn of a better, more free world’. Whilst that remains to be seen, it does have certain attributes that make it tempting for those looking to make money day trading bitcoin.

Why Day Trade Bitcoin?

Never a dull moment – With swings of over 10% in a matter of hours, this volatile market should give you the chance to find traceable action, and a potential profit for a savvy bitcoin day trader. Put simply – it’s an exciting market to day trade in. So unless you hand over your trust to a  day trading bitcoin bot, you’ll have fun glued to the screen.

Ideal for those comfortable with Forex – 

You don’t need to understand the complex technical world of cryptocurrencies and bitcoin. It’s basically a currency, enabling you to apply the same thought processes when you’re day trading bitcoin as you would when you’re day trading Forex.

Potential for leveraged trading – Some bitcoin exchanges offer leveraged trading, which could give you greater exposure to upside and downside price risk than your trading budget may normally allow.

Universal access – You can start day trading bitcoins anywhere on the planet, 24 hours a day, 7 days a week, 365 days a year. You simply need an internet connection. Plus, because you’re day trading you don’t need to have a long term view about whether cryptocurrencies will succeed. In addition, whilst the stock market can be a pricey place for normal investors, with Facebook and Apple shares costing around £110 per share, you can dive into the cryptocurrency market with just a dollars or pounds.

Low day trading bitcoin fees and taxes – Compared to many traditional exchanges, bitcoin focused exchanges offer low fees and minimums.

Go Long or short – Each day is different, you can be bullish and bearish the same week.

Bitcoin Wallet

To actually own bitcoin (rather then speculate on the price), you need a digital wallet to store your cryptocurrency. There are a whole range of wallet providers out there, but we like Hodly. It offers higher levels of security than most and is backed by large, regulated brokers.

What You’ll Need To Start Trading

So you want to make money day trading bitcoin? Now you understand why to trade and what you’re trading, but here’s a bit more detail on the how.

Step 1 – Find out the price

One of the first things you’ll need to know is what the price is. To do that you’ll need to head over to an index or broker to see the latest traded value. You can also use orders – open orders or limit orders – to enter the market at the point you want to.

Step 2 – Pick a broker

One of the biggest decisions you’ll have to make is which exchange or broker to deposit funds with. Day trading bitcoin on Coinbase has become particularly popular in recent years. Coinbase acts like a digital wallet, allowing you to transfer currency with ease from an app. However, there are other choices too, including:

• Bitfinex
• Bitstamp
• Kraken
• BTC-e
• GDAX
• Luno

Away from the direct exchanges, there are also brokers that will allow you to trade the underlying asset of Bitcoin, without actually owning it. It can for example, be traded within a forex pair against the US dollar. Other brokers, such as IQ - Option, will also allow you to speculate on bitcoin via CFDs or spread bets.

Step 3 – Capital

Before you can make money day trading bitcoin you’ll need some capital to start with. The internet is packed full of warnings about losing all your money so let’s keep this brief. Whilst you find your feet, using a small amount is advisable. It’s also worth highlighting that you should never trade more than you’re willing to lose. Be strict and regimented with what you can and can’t afford to lose, and you’ll never need to worry about losing out to the cryptocurrency market.

Useful tip – If you’re using credit cards, you may get charged up to 3.99%, so keep an eye out for credit cards that offer 3% cash back so you can negate part of the cost.

Step 4 – Bitcoin strategies

Rodger Federer doesn’t step onto the tennis court without a clear trading strategy, and you shouldn’t start day trading bitcoin without one either. Some people seek the assistance of a bitcoin day trading bot, others rely on their own technical analysis and judgement. Nearly all bitcoin day trading tutorials will suggest you utilise price charts and have an effective money management strategy. This will help you keep losses at a minimum and profits high.

Reading the charts

Whilst you will find an abundance of line and bar charts, don’t make them your bread and butter. Candlestick charts offer you the most information in the smallest amount of space. From them you can learn several essential bits of information:

What was the price when it opened and closed.How high the price got during the time frame, as well as how low it dropped.If the candlestick is green, then you know the price closed higher than when it opened.When it’s red, it tells you it closed lower than when it opened.If the chart is mostly green and heading upwards, you’re in an upwards trend.You know if the chart is mostly red, you’re in a downwards trend.

When using your chart ensure you have the right timeframe settings. For day trading bitcoins you want charts that are between 1-30 minutes.

If you want to make money day trading bitcoin you’ll need to get familiar with candlesticks and their indicators (see example below). It isn’t uncommon for bitcoin to fall into a repetitive trend for months on end. If three of the last four candlesticks have been red, then there’s a good chance it’s going to carry on heading that way, unless the RSI suggests it’s been seriously oversold.

On Balance Volume Indicator

Whether you were day trading bitcoin in 2015, or day trading it now in 2017, consider using the on balance volume (OBV) indicator. It utilises an intelligent combination of price and volume activity to tell you what is the total money flowing in and out of the market currently.

How do you apply it to Bitcoin? If bitcoin trading is on the rise whilst the OBV trading is heading south, then you know people are selling into this rally, however a move to the upside would not be sustainable. The same logic can be applied in reverse.