How To Simply Operate Bitcoin On Forex?
Despite the fact that the cryptocurrency Bitcoin is only 11 years old, in all this time, it has attracted the concentration of many investors, including traders with significant financial capacity. Investments in Bitcoin are, first of all, an investment opportunity in a sufficiently reliable and highly demanded currency. Investors who operate long-term and choose not to sell their assets in the periods of decline, which occurs in any short-term financial asset, receive very good returns.
In comparison to traditional currency investors, investing in Bitcoin offers a greater chance of making great profits, thanks to its unique property. The price of Bitcoin depends only and exclusively on the desire of people to pay for it a certain money. Furthermore, since the total amount of bitcoins in the world is determined in advance, the longer this cryptocurrency exists, the greater the demand and the higher the price.
The aim of investing in Bitcoin
Bitcoin is the world’s first digital cryptocurrency and remains the most prevalent. Today, thousands of dealers around the world accept this currency as payment for their products or services. Bitcoin can also be exchanged for ordinary money using specialized exchange points or trading platforms.
The characteristic that makes bitcoin an attractive asset to investors is that its production is limited, which protects it from inflation. Furthermore, the issuance of bitcoins is decentralized: the production of new bitcoins is carried out by those who want to use the power of the processing capacity of personal computers from anywhere in the world. There is no center that can issue this encrypted currency. Also, without any charge, you can transfer Bitcoins to your individual trading account.
The unconditional advantage of this encrypted currency is its anonymity. All an investor can see is the address of the wallet to which the funds will be transferred. Similarly, the investor need not provide any information about himself.
The total number of bitcoins in the world is limited to 21 million, while the launch (mining) speed of new bitcoins decreases approximately every four years, more or less, twice. Therefore, over time, the creation of new currencies is becoming slower and requires more resources, and therefore, the cost of bitcoin also increases. This, when investing, means that Bitcoin will increase its market value (price) in the long term, and over time a very good profit can be obtained.
Objectives and goals of investment in Bitcoin
Bitcoin’s potential growth rate is almost limitless relative to even the world’s strongest currencies, the euro, and the dollar, making it possible to convert this cryptocurrency as a highly reliable investment asset. Of course, we must earn money using this information, the growth that Bitcoin has, and will have with respect to the euro and the dollar. The main objective when investing in Bitcoin is to create a flexible long-term trading strategy.
Investor should avoid the temptation to “ditch” the cryptocurrency the moment the bitcoin rate shows an unexpected decline. It should also be recognized that the same cryptocurrency principle provides stable rate growth. Bitcoin’s security is in no way inferior to the similar characteristics of the same euro and dollar. At the same time, the Bitcoin rate is much less subject to fluctuations that occur with world currencies due to high-profile political and economic events.
How to operate the Bitcoin in the Forex market?
If strictly speaking, we refer to trading; then there are two options:
- Accounts in bitcoins
This option is the simplest. Some Forex brokers allow you to open trading accounts in bitcoins. In other words, your balance will be, for example, 1,523 bitcoins. Make some transactions; let’s say you trade with the EUR USD pair and make a profit or loss in BTC. By withdrawing your funds, for example, in euros, if the change of Bitcoin against the euro has grown, you will get additional benefits. And if not grown, you will get losses. It is completely analogous to the situation when you have a euro account.
- Trade directly with Bitcoin
In this option, we will obtain profits thanks to the fluctuations in the exchange rate of the cryptocurrency. The symbol is called Bitcoin or BTC USD. To successfully operate with Bitcoin, it is mandatory to have the best brokers that allow you to operate with Bitcoin.
Trading strategies for BTC/USD
Now we are going to recommend a few ways to trade for profit by trading the BTC USD pair.
1) Following the global rise trend
Of course, this currency pair is still too young, compared to mastodons like USD JPY, but now without a doubt, with which many analysts agree, we can talk about the BTC USD pair having a global trend. This should be taken into account when opening long-term positions.
2) Can operate 24 hours a day, 7 days a week
Due to the peculiarities of this currency, Bitcoin is actually trading tirelessly. It can be operated even on weekends. However, we advise you to refrain from transacting on non-business days for volume reasons.
3) Follow the news
Bitcoin is very vulnerable to the news. Its consequences have a lasting effect on it. Keep an eye on the economic calendar: If you see that a large fund has invested hundreds of millions of dollars in Bitcoins, and then consider opening buy positions in the coming days. If there is a sharp drop in a large stock exchange or in some country BTC has been banned, consider opening sell positions.
4) The technical analysis works very well
With the technical analysis, you can even operate simply based on a moving average, either one of 200 periods or one of 21 periods, among others.
5) Do not scalp with the Bitcoin
Due to its high spread, trading with low time frames is not recommended. It is recommended to operate in timeframes of one hour (H1) or higher.
6) Operate through gaps
Despite the fact that Bitcoin is traded every day, there is a possibility that gaps may appear due to lack of liquidity during the release of unexpected news.