How to Trade Bitcoin In The Financial Markets — FinexCrypt

There are two ways about how to trade bitcoin: either by buying the currency itself in hopes of selling it and making a profit by that, or speculating on its value without owning the symbol, and that is how the contracts for difference (CFDs) work.

As Bitcoin is the world’s №1 cryptocurrency, many see it as the most challenging currency for traditional currencies. However, when looking at Bitcoin’s history, it appears that a lot of volatility awaits this currency.

A CFD enables you to trade the contract based on prices in the underlying market. CFDs are considered leveraged products. The reason of that is the possibility to place a small initial deposit and get more exposure. This may magnify your profits, and it may have the same effect on your losses.

Should I use an exchange to trade bitcoin?

  • These exchanges lack adequate regulation, public records, and the infrastructure to respond quickly to requests for support.
  • The compatibility drivers and servers in use cannot be trusted. This could lead to market disruptions or low implementation accuracy
  • These exchanges impose fees and restrictions on the financing and withdrawing from your account with them, while the funds themselves may take days to obtain these balances.

By trading Bitcoin CFDs, you get a significant improvement in liquidity, at the rate you choose. When you buy and sell directly from the stock exchange, you often have to accept several prices to be able to complete your order.

What drives Bitcoin’s price?

Fluctuations in Bitcoin price are driven by several external factors, including:

Several external factors drive the bitcoin’s fluctuations :


Market value

Negative press material

Technological Improvement

Industry adoption of Bitcoin

Main events

Strategies To Trade Bitcoin

Day Trading

This strategy works for you if you want to respond to short-term opportunities in the bitcoin market due to developing news or emerging patterns.

Trade volatility or price swing

This strategy suits you if you want to take advantage of opportunities based on the strength of market activity and its trends.

Lightning speculation

This strategy works for you if you want to position yourself to get continuous small profits, rather than waiting for a fake breakout or significant downtime.

Automated trading

This strategy works for you in case you want to be a passive trader.

Steps in Bitcoin trading

Set up a trading plan

Here are some tips for preparing a trading plan:

  • Define the goals you want to achieve, and divide them into short-term and long-term goals.
  • Decide on the risk acceptable in each trade, and the amount of risk you are willing to take as a whole.
  • Choose your risk-reward ratio to find out what potential profits you need to cover potential losses.
  • Choose the markets you want to trade. Do you want to trade bitcoin only or try other cryptocurrencies?

Do your research

When interpreting Bitcoin’s behavior, charts can be a valuable tool. Past data may help you understand how the market is moving, while a time frame comparison gives a closer insight into trends and patterns.

Make a trade

If you believe that the value of Bitcoin will rise, then you will buy, and you will sell if you think that the value will decrease.

To close your position, you have to reverse what you did when opening the position. If you bought at the beginning of trading, you would have to sell the same amount; If you sell, you will have to buy this time.

Originally published at on June 17, 2020.