Posted by Fred Lake

Comparing Bitcoin and Stock Trading

Comparing Bitcoin and Stock Trading

The key to succeeding in bitcoin and stock trading is the understanding of charts. Not being knowledgeable about trading patterns could make you lose money. 

Bitcoin Trading 

The price volatility of bitcoin is critical for traders since it brings the opportunity for profit as long as you understand the chart. 

Random purchase of bitcoin without any specific knowledge is a sure way to lose money. Before buying bitcoin, it is advisable to research a lot in times of the best place to buy it, a hack resistant wallet provider, and proper guidance. Do not take the advice from journalists and bloggers seriously; you are better off with guidance from a crypto expert. 

The best approach to understand candlestick and charts is via forex brokers or websites giving out independent financial advice. 

To store and trade bitcoin, you should get a bitcoin wallet. There are reputable wallet providers like coinbase with a simple interface.  Bitcoin price could range from $7000 to $9000. You can, however, buy bitcoin in fractions; hence trading with $50 will be a good idea. It can guide you to understand the ups and downs of the market. This, however, applies when trading BItcoin price using a forex broker or buying on a forex broker. However, trading with real money will teach you many things that you will not learn utilizing a demo account. 

Understanding and reading the market is vital as you should be able to buy and sell bitcoin and ultimately increase your wealth. The timing of your transaction is also critical. Buying when many people are buying will result in a higher cost price. Also, selling when there is panic selling will make you lose money as you will sell lower. 

Trading Stocks

Stock market share price changes are usually minute, even if it is a couple of days, weeks, or months. The implication of this is that whatever profit or loss you will make with stocks, it is much lower compared to bitcoin. 

When you consider the daily chart, you will see a lot of variations. Many people, however, consider stocks a long term investment. Some essential tips and strategies can guide you online. The disadvantage of this is that countless people will be using the same tips; hence you will not get good deals, whether you are buying or selling. 

Comparing Trading and Investment 

The idea of trading is to buy when you predict a short term price growth – the idea is to buy low and sell high. There is also a risk that after purchasing, the price will fall. Your loss is, however, limited to the transaction amount. 

Using CFDs, you can also sell before buying. When you sell at a high price, you short a stock that is not yours, then you purchase it, hopefully at a lower price. This, however, comes with some risk as the price could rise just after buying; hence it comes with unlimited potential loss as well.

Many people prefer holding stocks in the long run – years or decades. People that do this go with stocks paying good dividends and with growth prospects. You are an investor and not a trader if you hold stocks for years.

Most life assurance policy funds and pension funds are invested in blue-chip shares. These are low-risk investment funds, although some funds specialize in high-risk growth shares or market shares like property or technology. 

Concluding Remarks

What attracts many people to Bitcoin is price volatility. Traders who do not mind an element of risk to get an enormous reward will find trading in crypto attractive.

Bitcoin trading is not for the weak, uneducated, or faint-hearted. An understanding of candlestick charts and how it helps predict rise and fall in price is vital. Beginners can get started at Forex sites to learn about how to predict the future cost based on the charts.

All investments in learning how to read charts are worthwhile as it will save you from critical mistakes in trading and timing of your trades. The most common mistake people make is to buy high and sell low, which discourages so many people in the bitcoin trading business.

Fred Lake
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