Cryptocurrency is a digital currency. There is no central authority that controls it. And this is its main advantage. Bitcoin is the most popular cryptocurrency nowadays. It is valuable because the amount of bitcoin is limited to 21 million. At the highest point bitcoin value reached nearly $20,000. Although today it fell to about $8,000, it is still highly ranked.
Olymp Trade provides traders with an excellent chance to invest in BTC, as well as several else cryptocurrencies. In this guide, we will focus on bitcoin. If you, however, prefer a different cryptocurrency, stay with us. You can easily apply the same rules we will describe here.
Cryptocurrencies available at Olymp Trade
For the present moment, there are 9 cryptocurrencies that you can choose from. There are available leveraged cryptos. BTCx10 for example simply describes a bitcoin with a 10 times lever. Using multipliers can significantly boost profits. But they increase the potential risk of massive loss as well.
How to get started with cryptos
To configure a trading chart for bitcoin, you need to click on the field with the asset name in the left top corner of the trading interface. Next, you find “crypto-assets” and select bitcoin.
On the right side of the interface, you will find numerous fields. Look at the screenshot below. Number 1 is the amount of money you invest plus multiplier (x10 in this example.) In box number 2 you can choose to set “take profit” or “stop-loss”. If you decide to do so, the trade will be closed automatically in case you reach the indicated profit or incur the loss. Further down you will find the information about the commission from the transaction that will be charged to your account. And finally the green button “buy” and the red “sell” to decide which position you wish to take.
A couple of important terms when trading cryptocurrencies
- Multiplier (1). This is the leverage effect used for a given cryptocurrency. Let’s say you set the leverage at 10. This will result that your investment will work on bitcoins worth 10 times more than your real investment. For example, the investment of $100 in a BTCx10 trade, will be equal to investing $1000.
- Take Profit and Stop Loss (2). Before you enter a trade you can predefine levels of profit and loss. If your transaction result will reach either Stop Loss or Take Profit, your trade will be closed immediately.
- Commissions (3). Based on your position size and multiplier Olymp Trade platform will calculate commissions for your upcoming trade.
Is it safe to trade bitcoin?
In the beginning, bitcoin, as well as other cryptocurrencies, were characterized by high volatility. In just a few days the value could be doubled or even tripled. Today, the periods of high volatility still happen, but the value of bitcoin is rather stabilized.
Taking the above into account, bitcoin trading is not recommended for short-term traders. Yet, it is a good investment resource for the traders who are ready to keep the position open for a few hours or days even.
You can see in the chart below, that bitcoin price often fluctuates in a narrow range. When it breaks the range the price movements are usually dynamic. Price can change from a few percent to around 10% in a matter of hours.
Remember, aim at long term trading if you are interested in bitcoin or other cryptocurrencies. You need to remember that rollover is not available for bitcoin. All bitcoin trades are automatically closed at 20:55 UTC.
Ways of trading bitcoin CFD at Olymp Trade
A good and simple way to trade bitcoin CFD is to use support/resistance levels. I’ve already said that bitcoin price tends to fluctuate within a narrow range for quite a long time. And this is very helpful in identifying strong support and resistance levels.
The other good thing is that usually after the price breaks through support or resistance level, the following trend is also strong.
I would recommend using a 1-hour timeframe candles chart to draw support and resistance lines. Just like the chart you can see below.
Now you can switch to a 15-minute chart. This procedure will make the identification of the moment of breaking through the support/resistance lines more accurate.
Take a look at the chart beneath. This is a 15-minute candlesticks chart for bitcoin. You can clearly see when the price begins to break the resistance level. You ought to wait for the candles to close over the resistance line. Thus, you have certainty the uptrend is developing and that now is the time to enter a buy position. It should last 1-3 hours.
Another thing you can read from the given chart is how the bitcoin price increases. In about 3-4 hours it rises from around 8,100 to 8,800.
Olymp Trade offers you the opportunity to trade bitcoin and other cryptocurrencies. It can generate great profits not only for experienced traders but for the novices too. However, you need to remember that trading bitcoin takes time. You should be ready to hold a position for hours because sometimes it will be a while before the trend is clearly visible.
Try trading cryptocurrencies on the Olymp Trade practice account. We would love to hear your feedback in the comments section which you will find further down the site.
Wish you success!
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