Bitcoin Trading: Read My 5 Steps Guide Before Dive

(Last Updated On: November 20, 2020)

Bitcoin trading is one of the most lucrative ways of trading in present time. If we think to dive into digital currency trading bitcoin should be our first choice in all Cryptocurrencies. The main reason for choosing bitcoin for trading is its price which is growing rapidly.

After launching in 2008, The price of Bitcoin has risen like a giant monster. Thanks to Satoshi Nakamoto, the founder of Bitcoin who gave us the new and very lucrative way of trading.

As the price of Bitcoin and other digital currency is rising, we can easily imagine the future of currency is Cryptocurrency and trading is Bitcoin will like as get rich quick scheme. Just imagine when Satoshi Nakamoto founded Bitcoin in 2008, it’s price was basically nothing as shown in the report by Wikipedia. In 2010 its price was raised just $0.003. 

And on 5 Feb 2018, its price is $6,200.

Now you can easily decide should you trade in Bitcoin or not.

In this article, we will discuss all the aspects of Bitcoin trading. Here you will find the “5 Steps guide” on Bitcoin trading. At the end of this article, you will be far familiar with digital currency trading. And, if you follow all the 5 steps in the right way, you will definitely be the master of Bitcoin trading.

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#1 Reasons why Bitcoin Trading is beneficial

Our first step on Bitcoin trading is building a proper knowledge of why trading in Bitcoin is considered so beneficial? Here are the 3 reasons.

The global presence of Bitcoin

As a Cryptocurrency Bitcoin is equally available for everybody in the world. Unlike from traditional currencies, Bitcoin is not operated by any particular country and no one holds the right to this currency.

This is the first reason behind the popularity of Bitcoin. As it is independent currency so no country or organisation have the power to change its value.

We all know the value of a traditional currency depends on 2 factors. The economy of the country from which the currency belongs to and the amount of gold that particular country currently holds.

But these factors do not bring any effect on the value of Cryptocurrency. Bitcoin and other cryptocurrency are independent of any economic changes or Gold reserves.

Unlike from traditional currencies, the price of Bitcoin or other cryptocurrencies depends on the supply and demand. New Bitcoins enter only into the system by Bitcoin mining.

This process generates Bitcoins at a fixed rate and Bitcoin mining difficulty is increasing with time. If the supply beats demands then Price decreases and if demand beats supply then you can see the price hikes.

In the whole history of Bitcoin, the demand always has beaten the supply. Hence the price hiked so much within 7 years.

24/7 Availability Bitcoin

The 2nd factor of the popularity of Bitcoin depends upon its availability. Just like all other Cryptocurrencies, Bitcoin is available 24/7. As it is a Cryptocurrency you don’t have to carry them in your leather wallet or deposits in banks.

You can keep them in your offline personal computer, and also online. Whenever you wanna spend them you just go online and reach your wallet. Easy reach makes Bitcoins and other digital currencies 24/7 available.

Although, yet today we have some restrictions on Bitcoins such as it is not available as a payment option on most e-commerce site. You have to exchange them with other traditional currencies before buying something. But if we take a look at the current price of Bitcoin the future of Cryptocurrency is bright.

Bitcoin is Volatile

Can you imagine how volatile Bitcoin is? In 2017 Bitcoin’s value takes a jump from $1,000 to straight $20,000 and at the end of the year, it drops to $13,000. It is the most active currency on the market today.

Its volatility is risky for newbie traders though, if you can have a close look at the prices you can withdraw a huge profit.

As trading in a volatile market is risky but for an experienced one, volatility is a winning tool. In the old days and even today, day trading in oil is volatile and many professional traders made a huge amount of bucks in oil trading.

And now Bitcoin took over the market of volatility. You can’t imagine, Bitcoin traders are making millions in a day.

#2 Finding Bitcoin Exchange

As any traditional trading Bitcoin has it’s exchanges too.

There are many out there but you should choose the best one. On the way to choosing a best Bitcoin exchange, you should take a look below. Below I have described some points which can help you to choose a good and reliable Bitcoin exchange to trade.

Properties of Good Bitcoin exchange 

Location of exchange

Before choosing an exchange to trade in Bitcoin the first thing you should aware of is, where is it located? Cryptocurrencies are not directly related to legal tenders but at the end of the day, you have to convert it into legal tender.

Now suppose your Bitcoin exchange is located in tier 2 or tier 3 country then the chance is they don’t accept many valuable legal tenders(physical currencies). It all depend’s on the economic growth of that particular country.

Before choosing an exchange you must read all the terms and conditions including which currencies they accept for exchange.

Also, you should give priority to the home-based Bitcoin exchanges because in your home country when you exchange Bitcoins with legal tenders you won’t have to pay more exchange fee.

If you want a full list of Bitcoin exchange locations, go to Buy Bitcoin where you can get the list of country wise exchange locations.

Fees they charge

The other factor you should take into account is the exchange fees. Take a look how much fee they charge for the exchange. Also, have a look at their Terms and conditions. Most of the exchanges change their fees with time and the value of currencies.

Some exchanges charge additional fees on top of the Bitcoin transaction fees. You must know that fees vary from exchange to exchange so choose an exchange.


As referred to Investopedia The currency market is all time most liquid market. One step further Bitcoin has beaten other legal tenders in liquidity. You can buy Bitcoin, sell it immediately and your pocket will be poured off some extra cash.

But to own that extra cash, you must know the degree of liquidity of your chosen Bitcoin exchange. You should know the liquidity of Bitcoin exchange before diving into.

Although, liquidity is useful for day trading and also long-term trading sometimes liquidity ruins the market. If you turn pages of the book of economic history you can find there are many shreds of evidence of the economic crisis in many countries where liquidity was the only reason behind.

Although, In the Bitcoin aspect the high degree of liquidity can give you extra power to trade on the daily basis and experience the cash flow.

Trust flow and regulation factor 

Let’s simplify this point as much as possible. Trust flow is the word which gained with time. Go check the most popular Bitcoin exchanges

As you know many Bitcoin exchanges and mining platforms are the fraud, you should follow the trust flow which any Bitcoin market gains over time. Don’t go with new exchanges.

Going to the link of I have provided above you can view the trust flow of most popular Bitcoin exchanges. You can view top 10 BTC markets, Live trade history and many more statistics.

Those statistics will help you to choose best Bitcoin markets.

Also, You can use those analytical data to find the regulation factor of those popular Bitcoin markets.

Few good Bitcoin exchanges

Here is my own suggestion of good Bitcoin exchanges which help you to securely trade in Bitcoins.

Following Bitcoin exchanges are considered as most trustable platforms and providing best service for years.



As Coinbase is considered to be world’s largest Bitcoin Exchange, with the availability in tier 1 countries US, UK, Canada, Singapore and Europe, will be the first choice in choosing the best Cryptocurrency Broker.

There are many deposit/withdraw options available including bank account, credit/debit cards, SEPA transfer, Interac Online, iDEAL etc. Although these payment options depend on the location.



Kraken is an another Europe based Bitcoin exchange and running for many years. Listed in they have a huge trust-flow and regulation. They just don’t have Bitcoin trading but you also trade in other popular currencies with them.

In my opinion, Kraken is one of the best Bitcoin trading platform to choose. I personally used it for my long and short and gain a huge amount of money from the market.

As their fees are a quite high nut as they are one of the best Bitcoin brokers you can blind faith in Kraken.


Now, this is the most popular place in Bitcoin exchanges. Ya, Bitstamp became huge providing their secure and reliable service since 2011. Bitstamp is the first exchange who provided Multisig technology for it’s hot-wallet, They have the offline secure vault where they deposit 98% BTC of customers.

They have extra security features like 2-factor authentication and email confirmations.

They have a good fee structure and good liquidity. You can consider to choose them as their overall performance is good in Bitcoin market.



Bitfinex is my last recommendation in the list of Bitcoin exchanges. It is purely a Bitcoin-fiat exchange. It provides margin trading it also has a liquidity provider.

You can easily trade in margin trading like short Bitcoins. You can trade it with other Cryptocurrencies like Etherium and Litecoin. Just like Coinbase, it has many deposit and withdrawal options. You can use bank accounts as well as credit/debit cards and also other Cryptocurrencies to deposit and withdraw.

They have a tight security and they assure you that your money is in secure hands.

#3 The risk in Bitcoin Trading

Every capital trading is full of risk. Bitcoin trading has no exception. Rather, in Bitcoin trading, you have a lot more risk to lose your capital. The reason behind is its liquidity. Bitcoin is changing every second. And if you do not see its liquidity as a plus point then this liquidity could ruin your capital marketing career.

Although, Many’s are making a huge amount of money using its liquidity as a weapon. You can also make this money but you have to be more cautious and clever. Understanding the advanced trading mechanism you can also make that huge money. It all depends on you how clever you are and how you trade in the market.

Also, you have to put a lot of money in Bitcoin market to gain some position. As the price drops in a fraction of the time, you can only save your capital, leveraging margin a lot amount of margin.

Leaving your Money on an Exchange after trading

The 1st step in becoming a clever Bitcoin trader is not leaving your money after a successful trade. I am telling again don’t leave your money on the exchange after trading.

Although Cryptocurrency is much secure then traditional currency I won’t suggest you leave your money in exchange. There are 2 reasons why am I saying that?

If your exchange face any big loss you can lose your money and there are no recovery options. So before registering for any trading agency go and read their terms and conditions carefully.

The second reason is today Bitcoin bankruptcy and stealing from the bank is on the top of the news. Few days are gone I saw a news in my regular newspaper that somebody has stolen Bitcoins worth millions of dollars from the office of Cryptocurrency exchange located in Delhi the Capital of India.

So it is not advised to leave your Bitcoins in the cold storage of trading agency. Withdraw your money as soon as your close the trade.

Capital Market Risk

There is a common risk in Bitcoin market which is a Capital market risk. This is a common risk factor in all capital markets including, share trading and other long-term tradings.

But the risk of losing capital is much more in Bitcoin trading. You can decide yourself whether to take the risk of losing your money in the capital market or not as the margins are huge. Today when I am writing this article, the price of Bitcoin is 9148.83 US Dollar.

#4 How to trade Bitcoin

Finally, we have arrived at the main topic of this article.

Now, you are aware of the benefits of Bitcoin trading, Risks behind Bitcoin trading and you also gained some knowledge of few reliable Bitcoin agencies. It’s time to learn the procedure of trading in Bitcoins.

The procedure is just similar to traditional trading. There are four steps.

  1. Open a trading account with any reliable Bitcoin exchange.
  2. Fund your account with sufficient amount.
  3. Fillup the amount which you have to invest.
  4. Go long or short means Buy and Sell Bitcoins.

But there are many other important steps in between these 4 main procedures.

Let’s go into detail.

Step 1

Open a trading account with your prefered Bitcoin agency.

Step 2 (optional)

Open a separate Cryptocurrency wallet. You can open an online wallet or download an offline wallet software for extra security. is a popular and absolutely free online Bitcoin wallet. There are many Offline wallets too. Just google and you have many options to choose.

Step 3

Connect your trading account with your bank account or Debit/Credit card. This step is important as you have to deposit or receive your funds in your bank account. Many Bitcoin agencies don’t recognise your bank if you live in tier 2 or tier 3 country. In this case use debit/credit cards or online wallet which you have created in step 2.

Step 4

Now, assuming you have funded your trading account with sufficient fund its time to start the trade. Choose a currency to buy and Go long(means buy Bitcoins). Just as the traditional day trading keep your eyeballs on the chart and whenever the exchange rate is high go short(Sell your Bitcoins).

Apart from Bitcoins, you can trade with any Cryptocurrency pair available in your trading platform. Also if your trading platform provides, you can use an auto-trader bot to Go long and short when the trade will be beneficial.

To use auto-trader bot you have to set up the margin and currency pairs and leave all the tasks on auto-trader bot.

Step 5

the final step is to withdraw your fund in your bank account. Also, you can withdraw your funds in your crypto wallet as it is easier to reuse that fund immediately from your wallet.

Don’t leave your funds in the trading account after each trade. I have told you earlier in this article that what is the risk of leaving your funds in trading accounts after the trade.

You saw how easy is trading in Bitcoins. But if you are thinking it’s too easy then you are wrong. Just like traditional trading, you have to be a master in some tools which will help you grow in the path of being a Bitcoin millionaire.

I have described those useful tools below.

#5 Best Bitcoin Trading Tools

Charts show you the increment and decrements in an understandable way. To analyze the price changing with time you should use Bitcoin charts. Bitcoin charts are a good way to forecast the future price of Bitcoin.

Before trading in Bitcoin, you should take a brief look at the charts. Charts help us a lot to keep a clear vision of current price and making a strategy for a successful trade.

Coindesk Charts



The above chart is obtained from Coindesk website and you can clearly see the price is increased $9150 to $9250 in just 24 hours. Means $100 rise in just 24 hours. So at the time of writing this article trading in bitcoin is quite beneficial for you.



Tradingview is an another Bitcoin charts and current price-watching website. They can help you a lot in Bitcoin trading. In their service, they provide Top authors, Market summery, Stocks charts, Economical calender and many more tools to help you grow in Bitcoin trading.


Cryptowatch is another useful website which can help you in trading bitcoins. It is equally helpful for other cryptocurrency traders as it can display detailed charts of all major cryptocurrencies.

Try out Crptowatch once. In my opinion, it will help you a lot.

Bitcoin Wisdom

Bitcoin Wisdom not only gives you a different view of charts but also give you the difficulty level and hash rate of that particular Cryptocurrency mining.

You should try all the above Cryptocurrency chart tools and find the best suited you. If you ask me to choose one I would suggest you Coindesk. I love its GUI which gives you the clear vision of charts.


Cryptocurrency CFDs

Traders can trade Cryptocurrency CFDs using contracts for difference without owning tokens.


Final Words

After the birth of Bitcoin there are many other Cryptocurrency came into the market but no doubt, Bitcoin is the king of Cryptocurrencies. As it’s price is skyrocketing day by day you can make a decent money trading in Bitcoin today. 

But as every trading has full of market risks it is not an exception. Think twice and then come to the decision that you should trade in Bitcoin or not.

If you like this article share it with your friends. Sharing encourage me to write more useful articles on these topics.


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