If you’re looking to start trading cryptocurrencies, you’re on the right path as this page will hopefully teach you everything you need to know to get you on your way. For those of you that are already familiar with cryptocurrency trading, you can check out our list of the best Bitcoin trading brokers, while others can continue reading our guide to learn more.
Best Bitcoin Trading Brokers
Here you can find a table of the best Bitcoin cryptocurrency brokers so you can get started with trading right away:
1
Minimum Deposit
$10
Exclusive Promotion
User Score
10
More than 3,000 assets, including currencies, stocks, cryptocurrencies, ETFs, indices and commodities
This ad promotes virtual cryptocurrency investing within the EU (by eToro Europe Ltd. and eToro UK Ltd.) & USA (by eToro USA LLC); which is highly volatile, unregulated in most EU countries, no EU protections & not supervised by the EU regulatory framework. Investments are subject to market risk, including the loss of principal.
What Do I Need to Trade Cryptocurrency?
To get started with trading cryptocurrency, you will need some basic knowledge about how online trading works and access to a platform that offers cryptocurrency trading services such as an exchange or brokerage.
Where Do You Trade Cryptocurrencies?
Cryptocurrencies are traded on different online platforms. These include exchanges and CFD Brokers. Let’s go over some of their main differences.
Buy Bitcoin now at our preferred partner:
1
Minimum Deposit
$10
Exclusive Promotion
User Score
10
More than 3,000 assets, including currencies, stocks, cryptocurrencies, ETFs, indices and commodities
This ad promotes virtual cryptocurrency investing within the EU (by eToro Europe Ltd. and eToro UK Ltd.) & USA (by eToro USA LLC); which is highly volatile, unregulated in most EU countries, no EU protections & not supervised by the EU regulatory framework. Investments are subject to market risk, including the loss of principal.
Exchange
A cryptocurrency exchange is a platform that allows its customers to trade cryptocurrencies for other assets, such as fiat money or other digital currencies.
CFD Broker
A CFD broker allows its clients to trade cryptocurrencies through derivative instruments. Contracts for Difference (CFDs) enable users to speculate on the price movement of a specific digital currency without needing to own the underlying asset.
Should I Trade Cryptocurrencies?
The answer to this question is up to you and your specific goals. We would suggest that you do your research, educate yourself, and test things out first before you make a full decision. Use our site to help you make this decision, as we have all of the information you require. Remember to only invest money you can afford to lose.
What Is the Best Way to Trade Bitcoin for a Beginner?
The best way for you to trade Bitcoin as a beginner is to use a CFD platform.
This is due to the fact that:
You are not required to store cryptocurrencies
You get a higher level of flexibility
Most brokerages are fully regulated and, as such, have a higher level of security.
Once you become more familiarised with these platforms, you can slowly make your way towards using a cryptocurrency exchange.
How to Trade Bitcoin Using a Broker
To trade Bitcoin through a broker, you will need to open an account with a brokerage. You should consider the security features, fees, and other things before making your final choice. However, here are the three steps you can take in order to start trading today.
Step 1: Open an account with your broker
Signing up for a cryptocurrency brokerage is a simple process and typically involves just entering your email address, password, and username. Keep in mind that some cryptocurrency brokerages may require additional documentation such as know-your-customer (KYC) verification to comply with regulations. Make sure to review the reputation of the brokerage to see if it has had security issues in the past to gauge its safety.
Step 2: Deposit funds into your account
Once you have successfully created your cryptocurrency brokerage account, the next step is to deposit some money by selecting your preferred payment method. Many brokerages will provide you with the option to pay using credit cards, debit cards, PayPal, direct bank transfers, and other methods. Once your funds are loaded onto your account, you can move on to the next step.
Step 3: Plan your trading strategy
The next thing you need to consider is what your trading strategy will be. Sticking to a plan is the best way for you to get the most out of your trading, and these are the four main strategies you can consider.
Day trading – This is where you essentially open a position on the same day, expecting the Bitcoin token to grow in value. You need to learn how to read charts and conduct technical analysis for this to work in your favor.
Swing trading – This is a short-term trading strategy that has a longer time frame when compared to day trading. You hold your position for a period that ranges from a single day to up to a few days with the intention of profiting from the price swings.
Scalping – Through this strategy, you are essentially capitalizing on the market inefficiencies, with the goal of getting repeated smaller gains. The two most common ways to the scalp are through arbitrage and spread scalping.
Automated trading – This is a form of trading that is conducted through an algorithm or a “trading bot”. Beware when coming across trading bots that promise incredible gains. As always, if it sounds too good to be true, then it probably is.
Step 4: Place your first trade
Once you have created your account, funded it with money, and selected your preferred trading strategy, you can begin trading.
Each brokerage will have a different system in place, but most will generally be very similar.
Simply select Bitcoin and place your trade. You will be prompted to another menu where you can choose your leverage. Keep in mind that there is a spread associated with trades, and these spreads are how the brokers make money. Dive deep into trading and analyze as much as possible.
How to Trade Bitcoin Using an Exchange
There are many cryptocurrency exchanges out there, with the biggest ones letting you trade a wide range of cryptocurrency tokens. Here’s what you need to do to get started:
Step 1: Decide which exchange you want to use
The first step that you need to make is to select an exchange that will allow you to buy cryptocurrencies with fiat currency. For example, if you’re in the US, you will look for an exchange that offers BTC/USD trading pairs.
Step 2: Set up an account
Next, you will set up your account. This will generally involve you providing an email address, password, and username; however, you may be required to send additional documentation such as the know-your-customer (KYC) form for regulation purposes.
Step 3: Select which cryptos you want to hold and trade
You will now need to decide which cryptocurrencies you want to hold and which ones you will want to trade. These are based in pairs, so for example, you’ll have a BTC/USD pair or an ETH/USD pair. Additionally, you have cryptocurrency pairs such as BTC/ETH. It is best to start buying some of the most well-known cryptocurrency tokens using fiat money if you are new. Ensure that you conduct an analysis of the market to see which coins you want to invest in.
Step 4: Place your trade
When it comes to placing your trade, there are different order types to choose from, these are the primary ones you need to be aware of as a beginner.
Buy order – This is an order when you purchase a number of cryptocurrency assets.
Sell order – This is an order when you close your trade either by cashing in your position to make a profit or cutting your losses.
Put or Call – When you are using options, you can bet on the price of Bitcoin going up, which is a call order, or on it going down, which is a put order.
Market Order – This is an order you make when you want to buy Bitcoin at the current market rate given on the exchange you have selected.
Limit Order – This is when you want to buy Bitcoin but are only willing to pay a specific price. Here, you essentially set a price and ensure that you do not buy any Bitcoin above the amount that you are willing to spend.
Stop-loss order – This is an order when you buy cryptocurrency, then tell your account to sell the coins if the value falls to a specific amount. If BTC drops by 15%, for example, your account will automatically sell it, limiting your losses.
Step 5: Receive your coins
Once you have placed your trade, you should see the Bitcoins on your account balance. What you do next is up to you. You may want to withdraw your tokens into a private wallet for good security practice.
1
Minimum Deposit
$10
Exclusive Promotion
User Score
10
More than 3,000 assets, including currencies, stocks, cryptocurrencies, ETFs, indices and commodities
This ad promotes virtual cryptocurrency investing within the EU (by eToro Europe Ltd. and eToro UK Ltd.) & USA (by eToro USA LLC); which is highly volatile, unregulated in most EU countries, no EU protections & not supervised by the EU regulatory framework. Investments are subject to market risk, including the loss of principal.
What Are the Alternative Ways to Get Bitcoin?
There are alternative methods through which you can buy Bitcoin. You have cryptocurrency brokerages, peer-to-peer (P2P) marketplaces, decentralized exchanges, ATMs, and so on. It’s worth trying each one out to see which one you prefer.
Final Thoughts on Trading Bitcoin
Trading Bitcoin requires a lot of research to stay consistently profitable, and hopefully, through this article, you now have a higher level of understanding when it comes to how all of it works. There are numerous brokerages, exchanges as well as alternative methods through which you can trade the token, and given the fact that it is the number one cryptocurrency token in terms of market capitalization, it is safe to say that you will always find somewhere to buy it or trade it. It is the go-to currency for newcomer trades and is highly recommended due to its long history of remaining at the number one spot.
FAQs
Can I Deposit Money Using PayPal to Trade Bitcoin?
Many cryptocurrency brokerages and exchanges will indeed provide you with the opportunity to deposit money through the usage of a PayPal payment method.
Can I Deposit Money Using a Credit or Debit Card to Trade Bitcoin?
This is dependent on the cryptocurrency brokerage or exchange in question. However, most of them do indeed offer this as an availability.
Can I Deposit Money Using Bank Wire Transfer to Trade Bitcoin?
This is something that depends on the brokerage or exchange that you end up picking. There are options out there that give you this as an availability. However, you will first need to deposit the funds from the bank to a trading account and then buy crypto.
Will I Lose Money Trading Bitcoin?
Bitcoin trading does put you at risk of losing money. However, the more you study the token and its trading methods, the better your chances for success will be.
Is Bitcoin Safe to Trade?
No commodity is safe due to the fact that if you can make money by trading something, you can also lose money. It is safe to trade in the sense that the cryptocurrency brokerages and exchanges have security measures in place to reduce the risk of it getting stolen, but as a commodity, it will always have risk associated with it.
What Are the Trading Hours of the Bitcoin Market?
Bitcoin lives on and is run by a blockchain network, which makes it always online.
Can I Trade Bitcoin on My Mobile Phone?
There are numerous cryptocurrency brokerages and exchanges which do offer mobile applications that will allow you to trade Bitcoin on the go.
Is It Easy to Withdraw My Profits?
This is dependent on the platform that you end up using. Withdrawals are typically a simple process. However, it could take a few days before you get access to your funds, depending on the withdrawal method.
Amala Pillai
Amala is custom content and news editor based in London. She is a former financial journalist based in Singapore with 7 years of experience covering a range of business and financial topics. Now she focuses on crypto and macro-economics. She has also covered feature profiles, tech, business politics and ESG— she was the Environment Editor for the Solutions Newspaper, 2016 and worked in an editorial capacity at both News corp (Dow Jones) and JBN. She also has experience as a content creator, strategist and brand editor for various financial institutions and banks.
