Bitcoin Trading 2024 – Tutorial and Platforms
Bitcoin trading has seen a huge surge. With plenty of volatility and price movements, it’s an enticing day trading market with huge trading volume per day.
This guide will help beginners learn bitcoin trading, outline bitcoin strategies and tips, plus highlight why a day trader looking for profit should delve into the BTC world. Use the list below to compare the best bitcoin exchanges 2024 and learn how to trade bitcoin.
Bitcoin Platforms
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1
NinjaTrader
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$00.01 Lots1:50NFA, CFTCForex, Stocks, Options, Commodities, Futures, CryptoNinjaTrader Desktop, Web & Mobile, eSignalACH Transfer, Debit Card, Wire Transfer, ChequeUSD -
2
Interactive Brokers
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$0$1001:50FCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB, FINMA, AFMStocks, Options, Futures, Forex, Funds, Bonds, ETFs, Mutual Funds, CFDs, CryptocurrenciesTrader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, eSignal, TradingCentralCheque, ACH Transfer, Wire Transfer, Automated Customer Account Transfer Service, TransferWise, Debit CardUSD, EUR, GBP, CAD, AUD, INR, JPY, SEK, NOK, DKK, CHF, AED, HUF -
3
eToro USAInvest $100 and get $10Securities trading offered by eToro USA Securities, Inc. (“the BD”), member of FINRA and SIPC. Cryptocurrency offered by eToro USA LLC (“the MSB”) (NMLS: 1769299) and is not FDIC or SIPC insured. Investing involves risk. https://www.daytrading.com/ is not an affiliate and may be compensated if you access certain products or services offered by the MSB and/or the BD.
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$100$10SEC, FINRAStocks, Options, ETFs, CryptoeToro Trading Platform & CopyTraderACH Transfer, Debit Card, PayPal, Wire TransferUSD -
4
IGForex trading involves risk. Losses can exceed deposits.
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$00.01 Lots1:30 (Retail), 1:250 (Pro)FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA, CONSOB, AFMCFDs, Forex, Stocks, Indices, Commodities, ETFs, Futures, Options, Crypto, Spread BettingWeb, ProRealTime, L2 Dealer, MT4, TradingView, AutoChartist, TradingCentralPayPal, Wire Transfer, Mastercard, Credit Card, Visa, Debit CardUSD, EUR, GBP, CAD, AUD, JPY, ZAR, SEK, DKK, CHF, HKD, SGD -
5
OANDA USCFDs are not available to residents in the United States.
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$00.01 Lots1:50NFA, CFTCForex, Crypto with Paxos (Cryptocurrencies are offered through Paxos. Paxos is a separate legal entity from OANDA)OANDA Trade, MT4, TradingView, AutoChartistWire Transfer, Visa, Mastercard, Debit Card, ACH TransferUSD, EUR, GBP, CAD, AUD, JPY, CHF, HKD, SGD -
6
UpholdTerms Apply. Cryptoassets are highly volatile. Your capital is at risk.
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$0$1CryptosDesktop Platform, Mobile AppWire Transfer, ACH Transfer, Bitcoin Payments, Debit Card, Credit Card, Mastercard, Visa, Ethereum PaymentsUSD, EUR, GBP -
7
IQCent20% to 200% Deposit Bonus
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$250$0.011:500IFMRRCBinary Options, CFDs, Forex, Indices, Commodities, CryptoOnline Platform, TradingViewCredit Card, Debit Card, Wire Transfer, Bitcoin Payments, Ethereum Payments, Visa, MastercardUSD, EUR -
8
Videforex20% to 200% Deposit Bonus
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$250$0.011:500Binary Options, CFDs, Forex, Indices, Commodities, CryptoTradingViewSkrill, Perfect Money, Bitcoin Payments, Neteller, Credit Card, Visa, Mastercard, Ethereum PaymentsUSD, EUR, GBP, AUD, RUB -
9
Plus500 USWelcome Deposit Bonus up to $200Trading with leverage involves risk.
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$1000.0 LotsCFTC, NFAFutures on Forex, Commodities, Cryptos, Indices, Interest RatesWebTrader, AppACH Transfer, Wire Transfer, Debit Card, Mastercard, VisaUSD -
10
CloseOption$10 Welcome Gift
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$5$1National Bank of GeorgiaBinary Options on Forex & CryptosOwnPayPal, WebMoney, Mastercard, Perfect Money, Wire Transfer, Bitcoin Payments, Ethereum PaymentsUSD
Here is a short overview of each broker's pros and cons
- NinjaTrader - You can get exposure to micro Bitcoin futures through the CME Group’s centralized exchange, which is highly regulated by the US CFTC. Micro contracts allow you to trade a fractional size of one Bitcoin, giving you more risk control and order flexibility.
- Interactive Brokers - IBKR lets you purchase and hold Bitcoin, Bitcoin Cash, Ethereum, and Litecoin at competitive commission rates and without needing a crypto wallet. Additionally, there is a range of other diverse assets to explore, such as crypto indices like the NYSE Bitcoin Index, as well as futures contracts like the BAKKT Bitcoin Futures.
- eToro USA - eToro US offers 24 tradeable cryptoassets, with just a 1% buying/selling fee added to the spread. Additionally, there are 80 different coins available through the broker’s proprietary wallet service. You can also practice your crypto strategies easily by switching between live and demo mode. Crypto asset investing is highly volatile and unregulated. No consumer protection. Tax on profits may apply.
- IG - IG's modest selection of 11 crypto CFDs trails top crypto brokers like Vantage which offers 40+ tokens. That said, it stands out with its crypto index, which tracks the value of the top 10 digital currencies by market cap and provides a holistic way to speculate on the value of the crypto market.
- OANDA US - Cryptocurrency trading is offered via Paxos, a separate entity from Oanda. You can speculate on the world’s biggest cryptos by market cap. Commissions are lower than many peers starting at 0.25%. Through the broker’s partnership with Paxos, clients can spot trade cryptocurrencies on the itBit exchange through the OANDA native platform.
- Uphold - You can buy and sell 250+ crypto assets with fiat currencies or in crypto pairs using the straightforward mobile app or through Uphold's browser-based account homepage. This is significantly more than many rivals. You can also earn up to 16% APY by staking one or more out of 32 valid tokens, or send tokens to an external wallet.
- IQCent - IQCent offers 17 crypto pairs through its proprietary terminal, including Bitcoin, Ethereum and Litecoin. Leverage on crypto CFDs is capped at 1:10, whilst binary options payouts vary by token but remain competitive. OTC assets, for example, pay out up to 95%.
- Videforex - Traders can speculate on crypto prices in pairs with USD and CNY through binary options and CFDs. The range of digital currencies is fairly narrow vs alternatives but major tokens like Bitcoin are available.
- Plus500 US - Plus500’s Micro-Bitcoin and Micro-Ethereum futures only allow traders to scratch the surface of crypto trading with bets on the two most popular digital assets. Importantly, you cannot buy and own the cryptos with these derivative contracts - you are speculating on their price.
- CloseOption - CloseOption traders can access high/low binary options on five major cryptos all paired with USD. Payouts of 40% are available due to digital assets' high market volatility, which compares well with rivals.
NinjaTrader
"NinjaTrader continues to meet the demands of active futures traders looking for low fees and premium analysis tools. The platform hosts top-rate charting features including hundreds of indicators and 10+ chart types."
NinjaTrader Quick Facts
| Coins | BTC |
|---|---|
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | Floating |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | NinjaTrader Desktop, Web & Mobile, eSignal |
| Minimum Deposit | $0 |
| Regulator | NFA, CFTC |
| Account Currencies | USD |
Pros
- Traders can get free platform access and trade simulation capabilities in the unlimited demo
- Low fees are offered, with $50 day trading margins & commissions from $.09 per micro contract
- NinjaTrader is a widely respected and award-winning futures broker and is heavily authorized by the NFA and CFTC
Cons
- There is a withdrawal fee on some funding methods
- The premium platform tools come with an extra charge
- Non forex and futures trading requires signing up with partner brokers
Interactive Brokers
"Interactive Brokers is one of the best brokers for advanced day traders, providing powerful charting platforms, real-time data, and customizable layouts, notably through the new IBKR Desktop application. Its superb pricing and advanced order options also make it highly attractive for day traders, while its diverse range of equities is still among the best in the industry."
Christian Harris, Reviewer
Interactive Brokers Quick Facts
| Coins | BTC, LTC, ETH, XRP |
|---|---|
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | 0.12%-0.18% |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | Trader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, eSignal, TradingCentral |
| Minimum Deposit | $0 |
| Regulator | FCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB, FINMA, AFM |
| Account Currencies | USD, EUR, GBP, CAD, AUD, INR, JPY, SEK, NOK, DKK, CHF, AED, HUF |
Pros
- While primarily geared towards experienced traders, IBKR has made moves to broaden its appeal in recent years, reducing its minimum deposit from $10,000 to $0.
- With low commissions, tight spreads and a transparent fee structure, IBKR delivers a cost-effective environment for short-term traders.
- There's a vast library of free or paid third-party research subscriptions catering to all types of traders, plus you can enjoy commission reimbursements from IBKR if you subscribe to Toggle AI.
Cons
- IBKR provides a wide range of research tools, but their distribution across trading platforms and the web-based 'Account Management' page lacks consistency, leading to a confusing user experience.
- TWS’s learning curve is steep, and beginners may find it challenging to navigate the platform and understand all the features. Plus500's web platform is much better suited to new traders.
- Support can be slow and frustrating based on tests, so you might find it challenging to reach customer service representatives promptly or encounter delays in resolving issues.
eToro USA
"eToro remains a top pick for traders looking for leading social investing and copy trading services. With a low deposit, zero commissions and an intuitive platform, the broker will meet the needs of newer day traders."
eToro USA Quick Facts
| Bonus Offer | Invest $100 and get $10 |
|---|---|
| Coins | BTC, ETH, BCH, DASH, LTC, ETC, MIOTA, XLM, EOS, NEO, ZEC, XTZ, MKR, COMP, LINK, UNI, YFI, DOGE, AAVE, ALGO, MANA, ENJ, BAT, MATIC, FLR, SHIBxM |
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | BTC 0.75% |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | eToro Trading Platform & CopyTrader |
| Minimum Deposit | $100 |
| Regulator | SEC, FINRA |
| Account Currencies | USD |
Pros
- The online broker offers an intuitive social investment network with straightforward copy trading on cryptos
- The low minimum deposit and straightforward account opening process means beginners can get started quickly
- eToro USA Securities is a trustworthy, SEC-regulated broker that is a member of FINRA and SIPC
Cons
- The proprietary terminal doesn't support trading bots and there are no additional stock market analysis tools
- Average fees may cut into the profit margins of day traders
- There's no MetaTrader 4 platform integration for traders who are accustomed to using third-party charting tools
IG
"IG continues to provide a comprehensive package with an intuitive web platform, best-in-class education for beginners, advanced charting tools bolstered by its recent TradingView integration, real-time data, and fast execution speeds for experienced day traders."
IG Quick Facts
| Coins | BTC, BCH, LTC, ETH, ADA, DOT, DOGE, LINK, UNI, XLM |
|---|---|
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | Variable |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | Web, ProRealTime, L2 Dealer, MT4, TradingView, AutoChartist, TradingCentral |
| Minimum Deposit | $0 |
| Regulator | FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA, CONSOB, AFM |
| Account Currencies | USD, EUR, GBP, CAD, AUD, JPY, ZAR, SEK, DKK, CHF, HKD, SGD |
Pros
- IG is amongst the best in terms of its range of instruments, which includes stocks, forex, indices, commodities, and cryptocurrencies, plus recently added US-listed futures and options, providing ample diversification opportunities.
- As a well-established broker, IG operates under strict regulatory guidelines in multiple jurisdictions, maintaining a high level of trust.
- The ProRealTime advanced charting platform is free as long as certain modest monthly trading activity requirements are met.
Cons
- IG has discontinued its swap-free account, reducing its appeal to Islamic traders.
- Stock and CFD spreads still trail the cheapest brokers like CMC Markets based on tests.
- While there is negative balance protection in the UK and EU, there is no account protection or guaranteed stop losses for US clients.
OANDA US
"OANDA remains an excellent broker for US day traders seeking a user-friendly platform with premium analysis tools and a straightforward joining process. OANDA is also heavily regulated with a very high trust score."
OANDA US Quick Facts
| Coins | BTC, ETH, LTC, BCH, PAXG, LINK, UNI, AAVE |
|---|---|
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | $100 |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | OANDA Trade, MT4, TradingView, AutoChartist |
| Minimum Deposit | $0 |
| Regulator | NFA, CFTC |
| Account Currencies | USD, EUR, GBP, CAD, AUD, JPY, CHF, HKD, SGD |
Pros
- The broker's API facilitates access to 25 years of deep historical data and rates from 200+ currencies
- Day traders can enjoy fast and reliable order execution
- Beginners can get started easily with $0 minimum initial deposit
Cons
- The range of day trading markets is limited to forex and cryptos only
- There's only a small range of payment methods available, with no e-wallets supported
- It's a shame that customer support is not available on weekends
Uphold
"Uphold remains a top choice for crypto investors looking for a one-stop-shop solution to accessing the markets. There are over 250 tokens to buy, sell and trade through flexible platform options."
Uphold Quick Facts
| Coins | BTC, BTCO, AAVE, ALCX, DYDX, INH, XYO, API3, GHST, LSK, AUDIO, GLMR, NMR, CAKE, GODS, REQ, CHR, TRB, DAO, ROOK, XRP, ETH, BAT, ADA, ALGO, ATOM, AVAX, AXS, BCH, BAL, BTG, CSPR, COMP, CRV, DASH, DCR, DGB, DOGE, DOT, EGLD and many more |
|---|---|
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | Up to 1.5% |
| Crypto Lending | No |
| Crypto Staking | Yes |
| Platforms | Desktop Platform, Mobile App |
| Minimum Deposit | $0 |
| Account Currencies | USD, EUR, GBP |
Pros
- UK users can get the Uphold card with up to 2% cashback in XRP
- Uphold is 100% reserved which helps to protect client funds
- Fees are competitive based on tests, with 26 underlying platforms helping to source the best prices
Cons
- The charting analysis features on the platform trail specialist exchanges
- Uphold operates with limited regulatory oversight
- Customer service is slow based on tests, with limited contact options
IQCent
"IQCent will appeal to day traders looking for a straightforward binary options and CFD trading platform with low fees, a range of accounts, and copy trading. Getting started takes less than 1 minute and a $250 deposit. "
IQCent Quick Facts
| Bonus Offer | 20% to 200% Deposit Bonus |
|---|---|
| Coins | BTC, ETH, LTC, ETC, DOGE, MATIC, QNT, SOL, XRP, USDT, XMR, BNB |
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | Variable |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | Online Platform, TradingView |
| Minimum Deposit | $250 |
| Regulator | IFMRRC |
| Account Currencies | USD, EUR |
Pros
- The broker's 24/7 customer support is fast and reliable, responding within 1 minute during tests
- There's an accessible $0.01 minimum stake for new day traders with a small budget
- IQCent is one of the few binary options brokers that also offers a copy trading service for hands-off traders
Cons
- IQCent charges a punitive $10 monthly inactivity fee if you fail to place at least 1 trade per month
- The market analysis is very basic with limited technical summaries and insights from analysts
- There's no automated trading support for algo traders
Videforex
"Videforex will serve traders looking for a no-frills, easy-to-use platform to speculate on the direction of popular financial markets through binaries. With a sign-up process that takes a matter of minutes and a web-accessible platform, getting started is a breeze. "
Videforex Quick Facts
| Bonus Offer | 20% to 200% Deposit Bonus |
|---|---|
| Coins | BTC, ETH, QUANT, UNI, SOL, BNB, DOGE, XRP, XMR, MATIC, USDT |
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | Floating |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | TradingView |
| Minimum Deposit | $250 |
| Account Currencies | USD, EUR, GBP, AUD, RUB |
Pros
- Traders can earn up to 98% payouts on 100+ assets with the broker’s binary options, bringing it in line with competitors like IQCent.
- Videforex is one of the few brokers with 24/7 multilingual video support, providing comprehensive assistance for active traders.
- Videforex regularly runs trading contests, offering practice opportunities and cash prizes to beginners and experienced traders, with position sizes from just ¢0.01.
Cons
- The client terminal needs improvements based on our latest tests, sporting sometimes slow and unresponsive widgets which could dampen the experience for day traders.
- Videforex lacks authorization from a trusted regulator, meaning traders may receive little to zero safeguards like segregated client accounts.
- The absence of any educational tools is a serious drawback for newer traders who can find blogs, videos and live trading sessions at category leaders.
Plus500 US
"Plus500 US stands out as an excellent choice for beginners, offering a very user-friendly platform, low day trading margins, and access to the Futures Academy to enhance trading skills."
Michael MacKenzie, Reviewer
Plus500 US Quick Facts
| Bonus Offer | Welcome Deposit Bonus up to $200 |
|---|---|
| Coins | MicroBitcoin, MicroEthereum |
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | WebTrader, App |
| Minimum Deposit | $100 |
| Regulator | CFTC, NFA |
| Account Currencies | USD |
Pros
- The Futures Academy is an excellent resource for new traders with engaging videos and easy-to-follow articles, while the unlimited demo account is great for testing strategies
- Plus500 US excels for its low fees with very competitive day trading margins and no inactivity fees, live data fees, routing fees, or platform fees
- The trading app provides a terrific user experience with a modern design, a clean layout and mobile-optimized charts
Cons
- Plus500 US does not offer social trading capabilities, a feature available at alternatives like eToro US which could strengthen its offering for aspiring traders
- The proprietary platform is user-friendly but lacks advanced technical analysis tools found in third-party solutions like MetaTrader 4
- Despite competitive pricing, Plus500 US lacks a discount program for high-volume day traders, a scheme found at brokers like Interactive Brokers
CloseOption
"CloseOption is a good pick for traders seeking a user-friendly binary options platform with high payouts and joining bonuses."
CloseOption Quick Facts
| Bonus Offer | $10 Welcome Gift |
|---|---|
| Coins | BTC, BCH, ETH, LTC, XBT |
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | No fee - payouts approx. 40% (Copper) |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | Own |
| Minimum Deposit | $5 |
| Regulator | National Bank of Georgia |
| Account Currencies | USD |
Pros
- Free demo account
- The user-friendly platform is compatible with most web browsers
- CloseOption offers weekly trading tournaments with cash prizes
Cons
- Binary options are only available on fiat and digital currencies
- CloseOption is not regulated by a well-regarded trading authority
- Clients need to deposit $50,000+ to qualify for the best payouts
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 and 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 $1.7 trillion, down from almost $3 trillion at the top. The market cap of bitcoin is $900 billion. This makes day trading bitcoin 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 than 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 Coinbase. 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 – it’s a “Trading Bitcoin For Beginners” step by step guide:
How To Trade Bitcoin 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 exchange 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 an exchange
One of the biggest decisions you’ll have to make is which exchange or brokerage to deposit funds with. Day trading bitcoin on Bitmex or Coinbase has become particularly popular in recent years. However, there are other choices too, including:
- Bitfinex
- Bitstamp
- Kraken
- BTC-e
- GDAX
- Luno
Away from the direct exchanges, there are also firms 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 exchanges, such as IQ Option, will also allow you to speculate on bitcoin via CFDs or spread bets. Our list of top Bitcoin brokers will show which firms offer one-click trading of BTC.
It’s also worth considering brokers that accept Bitcoin payments. These firms offer the seamless management and funding of BTC trading portfolios by reducing transfer charges and processing efforts.
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 strategy for how to beat his opponent, 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 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 2024, 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.
News
Another one of our top tips – It is imperative you utilise multiple news sources. Bitcoin value is extremely reliant on public perception, so news events can trigger spikes. Some of the most useful and user friendly news sources out there are:
- CryptoCoinsNews
- Bitcoin Magazine
- Coindesk
- The Street
- Coin Telegraph
- Business Insider
- Brave New Coin
- CNBC
When it comes to useful bitcoin day trading tips, many suggest that if there is zero negative news about bitcoin and cryptocurrencies in general, then it could well be the right time to sell. On the flip side, if there’s positive news then it could be time to buy.
Use this is a broad guide for day trading bitcoin and you’ll avoid some pitfalls and utilise some opportunities, hopefully making for a substantial bitcoin day trading profit.
Risks
Trading bitcoin for beginners introduces numerous risks – traders must be aware of them before putting money on the line. Learning bitcoin trading can involve expensive mistakes, so this list of risks with hopefully offer new traders some tips to avoid the pitfalls:
- Regulation – Bitcoins and cryptocurrencies are relatively new, making their future somewhat uncertain. People don’t know how governments will react further down the line and how stringent regulations will be. Could regulations cripple the market entirely?
- Dangers of volatility – Bitcoin is the most volatile of all assets, including the stock and gold markets. Whilst volatility brings with it opportunity to day trade bitcoin for a profit, it also brings with it doubt and unpredictability. For example, in June 2017 bitcoin was being traded at $2,983. It then lost 30% in value and crashed down to $1,992, only to climb up to $4,764 in September, boasting a 139% gain. You must ensure your bitcoin day trading strategies take into account the uncertainty.
- Exchange risk – Whilst your Bitcoins can’t disappear, the transactions you do are permanent and only the recipient can refund them. This means you must only do business with those you either know, trust or are widely reputable.
- Fees / Charges – If buying and selling Bitcoin directly, transactions costs can vary wildly. This can be a wider complaint with the concept as a whole, but for intraday traders making multiple trades, it is a significant risk. CFDs and binary options (or any derivative) can mitigate this risk.
- Margin Trading – Derivates can often be traded on margin. While this can increase profit potential, it also increases the risk. Losses can exceed deposits when trading on margin.
Last Words
The cryptocurrency market and bitcoin, in particular, are an exciting market for the aspiring day trader. Whilst there is understandable uncertainty, fortune favours the brave, and with these day trading bitcoin tips at your disposal, there’s serious potential profit to be made. Demo Accounts offer a risk free way to learn how to trade Bitcoin.