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1. What is Bitcoin Trading?
Bashir Aminu, founder of Cryptogene, explains the basic process of buying and selling Bitcoin as follows:
"If you buy Bitcoin at a certain price and then sell it at a higher price, you will profit from the price change. However, if the price of Bitcoin falls, you may find yourself in a dilemma, unsure whether to sell the Bitcoin and accept a partial loss or to hold on and hope that the price will rise again, with no guarantee that the decline will stop."
There are two types of trading in the market: short-term trading and long-term trading. These two types differ in the duration that traders hold Bitcoin before selling it back to the market.
Long-term traders typically analyze price trends over extended periods. This thorough market analysis helps them decide to buy and hold Bitcoin for the long term, hoping to profit from a significantly higher price than the initial purchase price. Given that Bitcoin is currently experiencing strong growth, many users advise buying now.
=> This advice is well-founded, as increased adoption of Bitcoin leads to higher demand for the cryptocurrency and related technologies, which in turn boosts the market demand for other cryptocurrencies. This has been evident recently, as significant increases in Bitcoin’s price are often accompanied by a surge in trading volume at that time.
In contrast, short-term traders monitor every small movement of Bitcoin on a daily basis and take full advantage of any price fluctuations. These traders thrive on the market's volatility, which is a characteristic feature of Bitcoin at present.
=> Initially, Bitcoin trading experienced high volatility, where even minor events in the cryptocurrency sector could have a significant impact on its price. However, experts now recommend buying Bitcoin because it is entering a more stable period, gaining broader acceptance, and is less likely to lose trader support compared to the past.
2. 6 Principles for buying and selling Bitcoin
Trading Bitcoin can be highly profitable if you truly understand each move you need to make. According to Aminu, it all depends on the market’s movement model. The value of Bitcoin fluctuates significantly from day to day. This can be a risk if you misjudge the situation.
Here are 6 principles for buying and selling Bitcoin:
1. Avoid the "All or Nothing" Approach: Instead of risking everything on a single trade, divide your investment into smaller portions and buy at various price levels.
2. Utilize Available Technologies: Make full use of all available technologies to maximize your profits.
3. Understand the market as a Continuous Process: The market requires significant time, focus, and effort. Conduct your own research and stay updated on trends.
4. Know opportunities to invest: This requires concentration, professionalism, and not being swayed by emotions.
5. Remember That Wins and Losses Are Part of Trading: What matters most is how much profit you have accumulated over time.
6. Regularly Monitor Coin Prices: Stay updated with exchange rates to make accurate decisions.
3. Conclusion
When investing in Bitcoin, applying these six key principles can help ensure success. First, understanding Bitcoin’s volatility and being prepared to face risks is crucial. Second, having knowledge of blockchain technology and how Bitcoin operates allows you to make more informed decisions. Third, researching and analyzing the market is necessary for timing your buys and sells effectively. Fourth, managing risk and diversifying your portfolio helps protect your investments. Fifth, focus on reliable information and avoid relying too heavily on news and rumors. Finally, patience and emotional control are essential for maintaining and achieving long-term success in Bitcoin investing.
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