Can Bitcoin Really Survive on the Forex Exchange Market?
Dec 03, 2017 Posted / 9160 Views
The traditional Foreign exchange market is a platform where currencies are sold and bought for the purpose of making profits. Prices of the currency keep on varying and the user aims to buy at lower prices and sell at higher prices with respect to the moving averages. Bitcoin prices fluctuate more than that of the fiat currencies making it a difficult commodity to trade on the forex market.
Let's suppose you decide to trade Bitcoin or you are already doing it, this article is guided beginners and a reference material to current traders to help them stay updated with the trend in Bitcoin trading. Let's start with why someone would want to trade Bitcoin in the first place,
Bitcoin has a limited supply meaning its supply is restricted while the demand is unlimited making its future price expected to increase during low supply periods. Holding a couple of Bitcoins in your wallet for a few years can definitely make for you some good profits due to appreciation in the value of cryptocurrency.
People are losing trust in fiat currencies like the USA the GBP amidst intense government regulation. The values of these fiat currencies can be eroded by central banks who continue to simply print new money.
The ability of Bitcoin to remain untraceable makes it a desired currency for many people, not just the criminals, and the tax evaders. These are the incentives associated with getting as much Bitcoin as possible and keeping it intact in your wallet.
Bitcoin has a very abnormal price fluctuation, prices can vary with values of more than $500 in a period of less than 1 day depending on some factors. In recent times it has been confirmed that the news influence Bitcoin prices to a significant degree, news about hardfork or related cryptocurrency like ethereum can drive prices high or down unexpectedly.
As a trader, you are already aware of the risks that are associated with trading whether it is Bitcoin, stocks, currencies, bonds, oil or commodities defining you specific risk is one of the steps in becoming a successful trader. Defining your traded specific risk and choosing a bias (Bullish or Bearish) is a plus to a trader trying to reap some profits off trading. A quick look at a recent Bitcoin chart indicates a price change of more than 30% within a period of just one month.
So after you have clearly understood the risks involved in trading Bitcoin you got to choose whether you still will trade Bitcoin or thinking of an alternative. Let's take it that you decide to continue trading Bitcoin. Relying on technical tools can help you define a bullish or bearish and the risks for a particular trade. Technical tools have become so effective in Fiat currency trading since they have been developed over a long period of time, Bitcoin being rather new on the trading market might not have these privileges yet. That can not be a set back for you as a trader, there are already some traders dealing in Bitcoin, so getting your hands on this technical tools is not going to cost you any much.
Using technical tools in Bitcoin Trading can help you can your losses and increase more profits. Technical tools alone does not guarantee you a consistent profit while trading Bitcoin, defining your own bias does. Meanwhile, technical tools can do a great deal of a good job in ensuring your success, your instinct to is necessary for consistency. Technical tools can guide you on when to trade and when to hold back.
Applancer is an open platform for discussion on all things like Blockchain , Cryptocurrency and Ico news updates. As such, the opinions expressed in this article are the author's own and do not necessarily reflect the view of Applancer .
Hottest Blockchain Newsletter
For updates and exclusive offers, enter your e-mail below.