Bitcoin and Crypto Currencies day trading is becoming more popular.
How to take advantage and day trade Bitcoin and Crypto currencies is a new manner of making money online for traders.
Digital currencies can be day traded with Forex, CFD’s and are offered by some Forex Brokers. Naturally, as always, you should take heed and be very careful when choosing a broker to trade with. There are plenty of scams around, especially in this new digital system of payment and investment. Yes, there is plenty of money of the made with the rising sensation of some currencies like Bitcoin. However, caution,care, and due diligence are always advised.
Crypto Day Trading – What is Forex, CFDs and Simplified Forex?
If you are planning to Day Trade Bitcoin and Crypto Currencies then you should know the different ways of trading and invest your money. If you are planning to get into the game of day trading crypto currencies, then simplified forex, and Forex/CFD are three ways of trading. Just like any type of Forex Trading, trading virtual currencies presents opportunities and pitfalls. If you are ready to start trading Crypto currencies, then we need to start at the very beginning.
#1 Day Trade Bitcoin and Crypto Currencies – Simplified Forex
Simplified Forex is nothing but a variation of Binary Options. Binary Options as the name implies is a financial derivative. It basically is a wagering system. It has been termed by some including Forbes as nothing but a gamble.
With simplified Forex, you are never really the owner of the Digital currency. You are merely placing a bet for or against the movement of the asset. You will know ahead of time how much you are placing on your investment, and what your payout will be if you win.
As such in this case, you choose a digital asset. You decide whether the price will rise or fall. You will pick a time frame within which to execute the trade. And you will decide on the value of the investment. As soon as you have made these three decisions, you will receive the data on how much you will be paid if your decision is a correct one. You will lose your entire wager if the price goes against you. With simplified forex you know all the odds ahead of placing your trade. If you decide to Day Trade Bitcoin and Crypto Currencies – then you must at least ensure that you select a broker that is CySec approved.
#2 Day Trade Bitcoin and Crypto Currencies – CFDs
You can also Day Trade Bitcoin and Crypto Currencies by way of CFDs (contract for difference). In this case, the making the right guess in terms of the direction of where the currency will head is just as important as is simplified forex. However, in the case of CFDs the lot size is a crucial difference. CFDs work more like proper forex trading.
The price movement, in this case, is going to determine the size of the profits of the trader. Like simplified forex, CFD’s are ruled by an expiry time and therefore the transaction cannot be closed earlier than the expiration time. Even when you are registering a profit or want to minimize your loss.
#3 Day Trade Bitcoin and Crypto Currencies – Spot Forex
Spot Forex or Forex Trading as it is better known is simply buying into and trading Bitcoin or Crypto currencies. You will decide the direction where the currency is heading and basically sit on it until you see a profit. Although this may sound simple, one has to be careful with leverage.
If you are new to trading then you should consult with our post – 10 Trading Tips for Beginners
When day trading Bitcoin, crypto currencies or currencies for that matter, you do not need to hold all the capital that you are trading. You will be trading with a leverage and your profits or losses could be to a much higher extent than the amount you wager. For this reason, it is important to know how to put “your take profits” and “your stop losses”.
The advantage of Spot Forex over Simplied Forex or CFD’s is that you can close your position and take your profits or cut your losses at any time.
Recently, given the growing interest in crypto currencies, most FX brokers have been adding digital currencies such as Bitcoin, Litecoin, and Ethereum to their asset selection. As such if you are now interested in this type of vertical, it is much easier to trade on a daily basis.
As with any kind of trading, the type of asset you decide to trade depends entirely on your risk appetite. All trading carries risk and this should be clear at the outset. You must always properly consider your knowledge and your flair and knack for trading. Before committing to any investment or trading you must always weigh out your risk.
Planning to Day Trade Bitcoin and Crypto Currencies? Find the Best Brokers
Make sure that you do not fall prey to a scam. Always check with us before you pick a new broker. We are in contact with traders on a daily basis. Through them, we are aware of who has been scammed or which broker has defaulted on payments. Below you can find a list of brokers that we and our subscribers have been trading with them for a long time. This is the only way you can make sure that they are trustworthy and a legitimate broker.
EToro – Forex and CFDs Broker – Copy Trader – best social trading platform
Minimum deposit is restricted to just $50
EToro is a Forex/CFDs trading platform that allows copy trading. This is the world’s best social trading platform. It is now offering cryptocurrencies including Bitcoin. Other currencies include Ripple, Dash, LiteCoin and Ethereum. EToro has a copy fund which is very useful for new traders and who do not have a great knowledge of how crypto currencies function and react to market conditions.
EToro offers a very easy manner of trading without needing much knowledge.
IQ Option.com – Offer Forex, Simplified Forex and CFD Brokers
Official Website: IQOption.com
Minimum deposit $10 (yes! you can afford to try it out)
The advantage of signing up with IQ Option is that you will get immediately a free demo account of $10,000 where you can test out the waters before actually dipping in!
The platform supports all three types of trading from Simplified Forex, CFD’s and proper Forex Trading. They have multiple coins as assets to trade in which include the standard Bitcoin, Litecoin, Ripple, Dash and Ethereum.
24 Option.com Simplified Forex and CFDs Broker
Minimum deposit $100
24 Option is a CySec regulated brokerage that has recently started offering day trading on crypto currencies. To celebrate the extension of their regular assets to include Bitcoin and other digital assets, they have reduced their starting capital from $250 to $100.
How to Day Trade Bitcoin and Crypto Currencies – Conclusion
The same trading principles that apply to Forex will apply to trading Bitcoin and Crypto Currencies. We strongly recommend that you do as much reading as possible in order to grasp the basics. There is plenty of information online which is free and we also give you access to our THE SECRET TRADER. We also recommend that you subscribe to the Sheriff University for valuable information on trading.
For those of you who want to start trading, we recommend that you open an account with any of the above brokers but use your first month to trade on a demo account. This is the only way that you will build your confidence and understand price movements without exposure to your capital.
Since Crypto currencies are quite new, you may just wish to open a digital wallet where you can just sit on your coins as a long term investment. The trend is up, and although the past performance is no guarantee of future performance, it seems that the potential for growth is still in its infant stages.
Buy and store your own Bitcoins
We certainly would like to issue a warning against using auto trading robots with both crypto currencies and standard FIAT currencies for that matter. We have come across too many scam systems including our recent review on Bitcoin Millionaire – It is very unlikely that you will come across a legitimate auto trading system easily. If and when we do, we will test it and give you a full rendition of its performance. However, up to now, we do not feel it is safe to make any recommendations.
Disclosure: Trading and Investment in crypto currencies offers a potentially high risk of loss of capital. The recommendations being made in this article carry affiliate links by which the owner of the website may benefit.