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5 Actionable Steps To Start Investing In Bitcoin and Crypto (Beginner's Guide)

Author
|Updated April 1, 2022 09:43
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Investing in cryptocurrency (Bitcoin and Altcoin) has proved to be an appealing venture. Some crypto has grown hundred times in a short span translating to massive profits.


If you want to learn how to start investing in Bitcoin and other crypto coins, you have come to the right place.


Crypto investing is not complicated, simply follow the steps below. By the end of this guide, you will have sufficient knowledge to start trading independently.


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Discover Crypto Trading on Mitrade ››


Step 1: Start investing in crypto - understand main concepts

If you plan to start investing in the cryptocurrency market, it is essential to understand trading terms you will come across frequently.


Here are the most common terms.


❖  Limit Order/ Limit Buy/ Limit Sell - buying or selling an asset at a preset price. It is considered a "for-sale" sign.

 Market order/ Market buy/ Market sell - A purchase or a sale of a crypto-currency at the current (market) price.

 Market trading - The action of using your existing crypto coins to leverage the trades. It is highly rewarding but is very risky too.

 Go short - When you go short, you gain profits if the price decreases

 Go long - Going long means you will gain profits if the price increases

 Bearish - Anticipation of a falling price trend

 Bullish - Anticipation of a rising price trend

 Altcoin - Any crypto-currency, except for Bitcoin and Ethereum.

 Tokens - Tokens are a representation of assets or utility in blockchain and are used for investment or storing value

 ICO - Initial Coin Offering is a crowd-funding method where a start-up creates its token to raise money.

❖  Arbitrage - The act of buying an instrument and selling in a different market to benefit from the price difference. For instance, you can compare Bitcoin prices on US exchanges and UK exchanges to see which BTC market is cheaper to buy or sell.

❖   ATH - All-time-high is the highest price of a certain crypto-currency so far.

    TA - Technical Analysis, the prediction of the market move by examining current charts.


BTC/USD price chart on Mitrade▼

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Step 2: Invest In a safe crypto investment platform

You probably know the unique features of cryptocurrencies, including decentralization, anonymity, and no intermediary. However, you must choose a cryptocurrency platform with top-notch security features to enjoy the benefits and secure your digital assets.


Nowadays, exchange sites apply 2 procedures: KYC (Know Your Customer) and AML (Anti-Money Laundering) regulations to eliminate scams and frauds from the markets.


KYC - Know Your Customer

Know Your Customer is a procedure to verify the identity of the platform users. KYC is not unique to the crypto space only; it is a requisite procedure in financial institutions. The aim is to prevent the use of cryptocurrencies for illegal activities.

The scanning procedure includes submitting Identity Proof (IDs, residential address, contact numbers, passports, etc.) to ascertain the users are real and qualified.


AML - Anti Money Laundering

Financial institutions are required to apply sets of procedures and regulations to detect and prevent money laundering activities. These measures protect the industry and prevent the use of cryptocurrencies for illegal activities such as market manipulation, illegal trading of goods, tax evasion, and public funds corruption.


Other crypto-currency regulations

Apart from KYC and AML, there are a lot of regulations used to monitor the transactions of crypto-currencies. While crypto-transactions are untraceable and anonymous,   financial institutions and governments are looking for ways to monitor and regulate crypto space.


Today, dozens of exchange sites satisfy KYC/ AML regulations. One of the top crypto-currency buying/ selling platforms that adhere to these regulations is Mitrade. It has the best features for both beginners and experienced traders.


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- trade with Mitrade platform -


Mitrade has a license from ASIC (Australian Securities and Investments Commission), a highly demanding world-class regulator. The broker also uses KYC as a security procedure.


On the Mitrade platform, you can Go Long or Go Short on various crypto instruments like Forex trading. Additionally, you can leverage your trade up to 1:30. But given the high volatility of Bitcoin and cryptos, you can adjust your leverage to1:2.


Mitrade also offers many incentives such as zero commission, low spread, and low deposit requirement. All of your transactions are processed in no time, less than 0.1 seconds.


If you are looking for an excellent Bitcoin investment platform, Mitrade is a good start. It is imperative to note that trading is risky. Mitrade provides leveraged products that can result in the loss of your capital.


Keep reading to learn how you can trade Bitcoin on Mitrade.


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Step 3: Do Your Analysis to Determine Ideal Time to Enter the Trade

Before you start trading crypto, you must learn how to research and determine the best time to open a buy or sell position. You might be wondering, what kind of analysis should I do before investing in cryptocurrency?

There are numerous analysis methods these days. However, they fall under two broad categories: Technical Analysis (TA) and Fundamental Analysis.


Technical Analysis (TA)

This method relies on reading charts to collect data, find trends, and predict future prices. Generally, history tends to repeat itself because traders' behaviors follow a pattern. Therefore, you will likely come across similar trends in the future. Many daily traders extensively use TA to decide whether to buy or sell a coin.


Fundamental Analysis (FA)

This method predicts the value of crypto based on news events, upcoming projects, the team, and behind the projects. It also looks at the features improvement, the problem-solving capabilities, and other intrinsic aspects. You need to be well versed with FA to make correct price predictions.


Bear in mind that any method you choose will need sufficient practice time. It is prudent to start with a demo account to familiarise yourself with the trading platform and understand the crypto investment, especially beginners. Click here to get a free demo account to trade cryptos on Mitrade and enter the markets today!


Step 4: Decide the direction: Buy/ Sell

Next, we come to one of the crucial parts. We know you have been waiting for this section. Let's see what happens when you buy or sell cryptocurrency.


Trading means buying or selling a financial instrument. When it comes to buying/ selling cryptocurrencies, there are two ways to go about it: open a short position and long trade.


If you go short on a trade, you are banking on the price to drop. You start by selling a coin with the intent to repurchase it at a lower price and get the profit.


For example, if you go short on 2 Bitcoin at the price of $9,000, you will receive $18,000 into your account, but it is not your money yet because you have -2 BTC in your balance. Later on, if you can repurchase 2 Bitcoin at $8,500, your total profit is $1,000 (minus fees).


In Long trade, you buy a coin with the expectation of selling it at a higher price and profit.


For example, if you are going long on 2 Bitcoin at $ 9,000, your transaction will cost $18,000. Later, if you can sell 2 Bitcoin at $9,500, you will get a $1,000 profit (minus fees).


Short   trade

Step 

Your   balance (in BTC)

Your   balance (in USD)

Sell 

Sell   2 coins at $9,000 = 2 x $9,000 = $18,000

-   2 BTC

$18,000

Buy

Buy   2 coins at $8,500 = 2 x $8,500 = $17,000

+   2 BTC

-$17,000

Close 


0

+   $1,000


Long   trade

Step 

Your   balance (in BTC)

Your   balance (in USD)

Buy 

Buy   2 coins at $9,000 = 2 x $9,000 = $18,000

+   2 BTC

-$18,000

Sell

Sell   2 coins at $9,500 = 2 x $9,500 = $19,000

-   2 BTC

+$19,000

Close 


0

+   $1,000


The key difference between the two methods is the potential earnings.


When going long, your potential earning is unlimited because the price of a coin can rise infinitely. In contrast, when you short a crypto coin, earnings are restricted to the amount you receive for your initial sale.


Step 5: Set up your order: Trade Volume/Take-Profit/ Stop-Loss

Once you choose the cryptocurrency to invest in, it is time to enter the trade. Before the trade goes live, you should set up your trade order, including trade volume, Take-Profit, Stop-Loss, and leverage.


Setting Take-Profit/ Stop-Loss points is a crucial step in trading crypto-currencies.


The Take-Profit helps you close a position when the digital currency reaches your target price. On the other hand, the Stop-Loss point instructs the broker to cut the losses of a certain trade when the market moves against your position.


Both are crucial elements to maximize your earnings and limit your risks. Therefore, if you want to succeed in this field, you should master calculating ideal take-profit/ stop-loss points.


There are several ways of calculating the stop-loss/ stop profit size. The rule of the thumb is to limit the loss of every trade to 2% of the total account balance.


There are numerous strategies based on percentage, volatility, and time. The whole idea is to choose a strategy that suits your trading style. It can take quite a while before you become well conversant with a trading technique. So, the prudent thing to do is to keep practicing frequently.


The picture below shows a Buy order on BTCUSD with Mitrade. I decided to start with a small volume of 0.01 Lot with leverage 1X. The starting deposit is 464USD, according to the current price.


Note: Your margin will automatically appear at the bottom of the deal ticket after selecting a position size.▼

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( Place a BUY order on Mitrade )


How To Start Investing in Bitcoin and Crypto on Mitrade?

Investing in cryptocurrencies like Bitcoin and Ethereum on the Mitrade platform is easy. Simply create an account and start trading in less than 3 minutes.


Here are the steps.


1. Open an accounton the Mitrade platform. Mitrade has a KYC check to verify identity and enhance security. Therefore, you have to answer several questions (about 10), upload your ID, and verify your address, phone number, and email. Mitrade will investigate all the documents and inform you about your account status in just an hour.


2. Deposit your fund and start trading. You can use Bank transfer, VISA, Master Card, Skrill, and Wire Transfer to add money into your account.


3. Start trading. Now you can Buy/ Sell Bitcoin, Ethereum, Dogecoin, and other coins on Mitrade. Mitrade has lots of useful features such as Take Profit, Stop Loss, Trailing Stop, and leverage to help you limit the risks and maximize earnings automatically.


Here is the best part. You do not need a lot of money to trade on Mitrade. The minimum volume per trade is just 0.01 lots, and you can use a Leverage of 1X or 2X for cryptocurrency. This enables beginners to enter the crypto market easily and start enjoying the benefits.


Trade on Forex, Commodities, Indices, Shares, and Cryptocurrencies in 3 Steps:

Conclusion


Trading cryptocurrency doesn't have to be challenging to master. You only need to understand the main concepts, seek a suitable exchange or platform with high security, and practice your strategies.


If you are a beginner, the best way to start crypto investment is to try Mitrade Demo Trading, which simulates buying and selling crypto coins on the real markets at no cost. Once you develop mastery of analyzing charts, crypto trading is a perfect place to make a fortune.


You now understand how to invest in Bitcoin and cryptocurrency. It's your turn! Sign up today on Mitrade and start making profits.


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If you want to learn strategies and free demo trading, please click here to sign up for Mitrade's multi-asset trading platform. We offer trading on 300+ the world's most popular assets.   


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Risk Warning: Trading may result in the loss of your entire capital. Trading OTC derivatives may not be suitable for everyone. Please consider our legal disclosure documents before using our services and ensure that you understand the risks involved. You do not own or have any interest in the underlying assets.

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