So what is Bitcoin Trading, and how is it different from investing in
Bitcoin? Well, when people invest in Bitcoin, it usually means that they are
buying Bitcoin for the long term. In other words, they believe that the price
will ultimately rise, regardless of the ups and down that occur along the way.
Usually, people invest in Bitcoin because they believe in the technology,
ideology, or team behind the currency. Bitcoin investors tend to HODL the
currency long-term. HODL is a popular term in the Bitcoin community that was
actually born out of a typo of the word “hold”—in an old 2013 post in the
BitcoinTalk forum. So while Bitcoin investors buy and HODL for the long term,
Bitcoin traders buy and sell Bitcoin in the short term, whenever they think a
profit can be made. Traders view Bitcoin as an instrument for making profits.
Sometimes, they don’t really care about the technology or the ideology behind
the product they’re trading. Of course, people can still trade Bitcoin if they
do care about it. And many people out there invest and trade at the same time.
But why are so many people looking to trade cryptocurrencies (especially
Bitcoin) all of a sudden? Here are a few of the reasons: First, bitcoin is very
volatile. In other words, you can make a nice amount of profit if you manage to
correctly anticipate the market. Second, Unlike traditional markets, Bitcoin
trading is open 24/7. Most traditional markets, such as stocks and commodities,
have an opening and closing time. With Bitcoin, you can buy and sell whenever
you please. Finally, Bitcoin’s unregulated landscape makes it relatively easy
to start trading—without the need for long identity-verification processes.
Trading method types For example, day trading involves conducting multiple
trades throughout the day, and trying to profit from short-term price
movements. Day traders spend a lot of time staring at computer screens, and at
the end of the day, they usually just close all of their trades. Scalping is a
day-trading strategy that a lot of people are talking about. Scalping attempts
to make substantial profits on small price changes, and it’s often referred to
as “picking up pennies in front of a steamroller.” Scalping focuses on
extremely short-term trading, and it’s based on the idea that making small
profits repeatedly limits risks and creates advantages for traders. Scalpers
can make dozens—or even hundreds—of trades in one day. Meanwhile, swing trading
tries to take advantage of the natural “swing” of the price cycles. Swing
traders try to spot the beginning of a specific price movement, and enter the
trade. Then they hold on until the movement dies out, and take the profit. They
try to see the big picture without constantly monitoring their computer screen.
