Do you want to trade in bitcoin and gain profits? There are various ways using which you can trade in bitcoin such as direct buying and selling, leverage trading, future, and binary options trading. I have explained every method in this article. If you want to learn them and use it for your trading purposes, read on. Before that, I would like to shed some light on bitcoin and its potential as a digital asset.
Bitcoin: A Great Digital Asset
Bitcoin when first released in 2009, the price for 1 unit was nothing. The first dollar value of 1 unit of bitcoin was traded at only $0.0008. Gradually, the value increased significantly over the years. In 2017, the value of 1-unit bitcoin was around $1000 in the first half of the year. But the value increased to $17, 450 in December 2017. This was unbelievable many people were suspicious and thought that it was a scam. But it was the real growth of 1-unit bitcoin at that time. Now its value is around $10,000, but bitcoin experts predict that it will reach $25,000 in the upcoming years.
So, if you want to invest or trade in bitcoin then it is not too late. You can try a free demo to practice trading bitcoin and also other crypto coins. Keep reading how you can use cryptocurrencies as digital money
One important thing to note, the information in this article is to provide you knowledge about the market. But don’t take it for granted that you should invest in whatever is recommended here. Take your investment decisions according to your risk tolerance and investment goals. When you invest in the market, make sure that you take the risk according to your financial condition.
How to Gain Profit from Short Selling?
First of all, let us understand about short selling. Short selling means you earn a profit from the market when the price goes down. You may wonder, how can someone earn money when the price of bitcoin goes down. Yes, it is possible to earn money while the price is going down by short selling. If you anticipate that the price will go down, you can first sell it at that price then buy it later when your target is reached.
As I have mentioned above that you can trade bitcoin in so many different ways. Here I am sharing how you can gain profit by short selling bitcoin.
- Direct Trade or Spot Trading:
In this trading you sell off the bitcoin at your desired price and wait till it drops to the anticipated price range then you buy it. In this type of short selling, you can gain a profit with the amount of money you have without taking any margin.
- Leveraged Trading
In leverage trading you short sell bitcoin but you can take a large position in the market with less money. Here you borrow money from your trading broker. They offer you a margin to take a higher position with less money in the market.
But it associates high risk, so be careful before taking leverage from your broker. Practice with spot trading and if you become successful and gain profit from spot trading for a period of time then you can switch to leveraged trading.
- Future Trading
You can also gain profit by short selling in the future market. Here you will bet for a future value of bitcoin that the price will go up or go down. Then you make a contract that you will buy bitcoin at a future date anticipating the future value of bitcoin.
- Binary Options Trading
Another way to short sell bitcoin is by binary options trading. This is also a contract-based trading like future trading, but has two options; one is ‘put’ and the other is ‘call’. In the ‘put’ option contract, you can sell the contract which you set at a particular time and price. In the put option, you gain profit if the value of bitcoin goes down. In the ‘call’ option, you can buy the contract at a specific time set by you at a specific price.
Now you have four options to short sell bitcoin and gain profit from it. So, start investing but focus on learning and practice to gain confidence.