Most of the time, your decisions on Bitcoin trades will only come from speculations, which is high risk. As mentioned, when trading Bitcoin, prices can quickly go very high or very low. Bitcoin’s legendary price volatility can excite many investors and traders—especially day traders. But the tradeoff is essentially adding a third currency to what was a trading pair. If you’re familiar with forex trading, trading bitcoin is most like “spot” trading a currency pair. Because of the popularity of cryptocurrency, a market was born to specifically trade cryptocurrency. Mostly, those ways have to do with the fact that bitcoin was invented in 2008, not centuries ago like most forex-traded currencies. Bitcoin’s legendary price volatility can excite many investors and traders—especially day traders. A forex trade is simply an exchange of one currency for another at its current rate. To prevent yourself from making impulse decisions when high volatility occurs, it’s very important for you to determine your limits. is that you have to determine and set a price that you’re willing to cut loss or take profit before the trade. But because cryptocurrencies are such a brand-new asset class, even experienced investors may find themselves asking, “How do I trade bitcoin?” Since Bitcoin is the most known cryptocurrency, many people started trading Bitcoin online. Because of this, you must only trade an amount that you’ll be comfortable losing.best bitcoin wallet for android In addition to these differences, experts like Investopedia recommend trading bitcoin at a regulated cryptocurrency exchange, such as Gemini Trust, rather than a traditional forex exchange, because cryptocurrency exchanges understand the market and security requirements better than forex markets. Unlike tourists who exchange their home currency for local spending money, forex traders are trying to make money off the continual fluctuations in the real value of one currency against another. Most forex trading is conducted in a decentralized fashion via over-the-counter markets. Traders who want to take on that risk should use only a locally regulated forex brokerage. Because of the popularity of cryptocurrency, a market was born to specifically trade cryptocurrency. Bitcoin is a digital currency, so investors may think of it in terms of the foreign currency exchange (forex) market. Consequently, bitcoin trading is simpler and more straightforward than forex. If you want to become a trader as well, here are some Bitcoin trading tips you need to consider in order to be successful. However, the fact that the forex market is decentralized and that bitcoin is considered to be a decentralized digital currency does not mean that the two are equivalent. The key distinction is that, though forex exchanges might be decentralized, the currencies themselves are backed by central banks in the countries that issue them.