How To Trade BTС In Forex?

How to trade BTC in Forex

When it comes to Bitcoin trading on Forex, there are two primary avenues: spot trading and derivatives trading. Each offers unique benefits and caters to different trading styles.

1. Spot trading. Spot trading involves purchasing actual Bitcoin and selling them at a higher price. It’s direct and straightforward. To engage in spot trading, one must set up an account with a cryptocurrency exchange that offers liquidity and competitive rates

2. Derivative trading. On the other side of the Bitcoin trading spectrum are derivatives—financial contracts whose value is derived from the performance of an underlying asset, which in this case is Bitcoin

These derivatives include futures, options, and Contracts for Difference (CFDs), each offering a different risk profile and method of exposure to Bitcoin’s price movements.

Source: Metatrader4

For those interested in derivative trading, it is crucial to select a broker that is reputable and transparent.

Best cryptocurrency exchanges

1

9.4/10

Go to broker

Your capital is at risk.

Minimum deposit:

$1

Review

The Binance exchange is one of the largest cryptocurrency exchanges in the world with its headquarters in Hong Kong. According to the CoinMarketCap cryptocurrency portal, Binance holds the top spot in terms of aggregate indicators of the platform's daily turnover, the number of novices and active users, liquidity, and web traffic (ranking, queries, statistics in search engines, etc.). The exchange is also a cryptocurrency startup that has its own “native asset” used in the Binance ecosystem as the “basis gas” (payment internal unit). More about Binance Card

Pros/Cons

•low commissions due to liquidity and trading volumes.

•high platform performance;

•proprietary BNB Coin which allows Binance to reduce the commission size;

•a proprietary cold wallet guarantees the security of your crypto assets by storing them.

•complex verification procedure;

•the exchange is not licensed by a regulator;

•The platform can go offline without warning;

•there are complaints about the technical functionality of the platform;

•there is an intricate mechanism for calculating commissions and rewards (grid system Maker/Taker).

Study Review

2

9.2/10

Go to broker

Your capital is at risk.

Minimum deposit:

₮1

Review

The BitGet crypto exchange provides traders with the opportunity to trade in spot, futures, and cryptocurrency. Cryptocurrency is used exclusively as instruments at the exchange: BTC (₿), LTC (Ł) ETH (Ξ), USDT (₮) and others. Trades are carried out on the crypto exchange’s own platform, which is available as a web terminal and an application for mobile devices. BitGet's fees are lower than its competitors in the market, with maker fees of 0.02% and takers of 0.06%. The commission can also be paid with bonus funds that each BitGet client receives upon registration, verification, and a trading account replenishment. There are no fees for maintaining an account, but a commission is charged upon withdrawal, the amount of which depends on the cryptocurrency in which the withdrawal is made. For investors, BitGet offers its own service for copying trades, and it is available at the exchange and at an affiliate program. Novice traders can use demo accounts to hone their trading skills, but there are no educational materials on the website. The BitGet cryptocurrency exchange provides services on an international level and cooperates with traders from different countries.

Pros/Cons

•availability of demo accounts;

•convenient ways to contact the support service;

•a wide range of cryptocurrencies for account replenishment;

•service of copying trades for receiving passive income;

•ability to reduce commissions using credits earned in the bonus program;

•ability to engage in algorithmic trading;

•the exchange uses hot and cold cryptocurrency wallets to store client funds.

•Deposits and withdrawals in fiat currencies are not available.

•There are no educational materials for novice traders on the exchange website.

Study Review

How to trade BTC using technical analysis

Technical analysis is a vital tool for traders navigating the volatile waters of Bitcoin trading. It entails scrutinizing price charts and utilizing various indicators and patterns to forecast future market movements.

Chart patterns

Chart patterns are foundational to technical analysis. They provide a visual representation of market sentiment and potential price movements. Recognizing these patterns can be a game-changer in predicting future price actions. Common patterns include head and shoulders, triangles, flags, and wedges.

Indicators

Indicators serve as the compass for technical analysts, guiding through the market's directional trends and momentum.

There are two primary types of indicators: leading and lagging. Leading indicators, such as the Relative Strength Index (RSI) and Stochastic Oscillator, predict price movements before they occur. Lagging indicators, like moving averages, confirm trends after they have begun.

To harness these tools, traders must select indicators that align with their trading strategy and risk tolerance. It is often recommended to use a combination of both types of indicators to cross-verify signals and improve the accuracy of trade execution.

Support and resistance

Support and resistance levels are the foundation of market psychology, marking key price levels where an asset often experiences pressure.

A support level is where the price tends to find a floor, and buying interest is sufficiently strong to overcome selling pressure. Conversely, resistance levels are where selling pressure overcomes buying interest, creating a ceiling.

To utilize these levels, traders should observe where price reversals have occurred in the past and apply these insights to anticipate future market behavior. Psychological levels, often occurring at round numbers (e.g., $20,000 or $30,000 for Bitcoin), can be particularly strong due to the human propensity to favor round figures. Traders can set entry or exit points near these psychological levels to capitalize on the predictable reactions from the market.

How to trade BTC using fundamental analysis

Unlike technical analysis, fundamental analysis dives into the core factors that can influence Bitcoin's intrinsic value. This approach examines everything from macroeconomic indicators to specific events that could impact supply and demand.

The most important factors to consider when doing BTC fundamental analysis are:

• Adoption rate. The adoption rate of Bitcoin is a telling sign of its mainstream acceptance and potential for growth. Increasing acceptance by consumers, businesses, and even governments tends to correlate with a rise in Bitcoin's value. Analysts assess adoption through various metrics such as the number of active wallets, transaction volumes, and retail and institutional investment flows. A growing adoption rate can suggest a bullish outlook for Bitcoin

• Bitcoin halving. Bitcoin halving is a significant event that slashes the reward for mining new blocks in half, occurring approximately every four years. It effectively reduces the rate at which new bitcoins are generated, thereby limiting supply. Historically, halving events have preceded substantial rallies in Bitcoin's price, as the reduced flow of new coins can lead to supply shortages amid steady or increasing demand. Fundamental analysts closely watch the timing of these halvings, as they can be a precursor to a long-term price increase

In addition to these factors, fundamental analysis may include scrutiny of many other factors, such as economic indicators, industry trends, political developments, technological innovations, regulatory updates, network activity etc.

How to trade BTC using on-chain analysis

On-chain analysis offers a deep dive into the blockchain itself, providing a transparent view of Bitcoin's network activity. This form of analysis can yield powerful insights into the movements of large-scale holders, known as whales, and the overall sentiment of the market.

• Whale movements. A “whale” is a popular name for an entity or individual who holds significant amounts of Bitcoin. Their transactions can have a substantial impact on the market due to the large volume of coins they move. By analyzing the blockchain, traders can track when whales accumulate or reduce their positions. An influx of Bitcoin to exchanges might indicate potential selling pressure, suggesting a bearish sentiment. On the flip side, the withdrawal of Bitcoin from exchanges typically signals accumulation, which could be a bullish sign. Monitoring these movements allows traders to potentially anticipate major price movements

• Market sentiment. On-chain data can also reflect the broader sentiment of the market. Metrics such as network hash rate, transaction volumes, and active addresses provide a sense of market vitality and trader enthusiasm. For instance, a rising hash rate indicates a strong miner commitment, often correlating with positive sentiment, while a declining hash rate may signal waning confidence

On-chain analysis can give traders a comprehensive view of the Bitcoin market, aligning their strategies with the underlying blockchain dynamics to better navigate the volatile cryptocurrency landscape. Read also about: Generating profits using on-chain metrics and indicators in the TU article.

Risk management

Effective risk management is the cornerstone of sustainable trading, particularly in the volatile realm of Bitcoin. The cryptocurrency's rapid price fluctuations can generate high returns, but they also carry the risk of equally swift losses. Thus, implementing a robust risk management strategy is essential for protecting your capital while pursuing potential profits. You can find some useful tips below:

• Setting stop loss and take profit levels. One of the fundamental tools in a trader’s arsenal is the use of stop loss and take profit orders. A stop loss order automatically closes a position at a predetermined price level to limit potential losses. Conversely, a take profit order locks in profits by closing a position once it reaches a specific profit target

• Position sizing. Position sizing is another critical aspect of risk management. It involves determining how much capital to allocate to a single trade, based on the trader’s risk tolerance and overall account size. A common rule of thumb is not to risk more than a small percentage of your capital on any single trade, thus ensuring that no single loss can significantly impact your account balance

• Diversification. While Bitcoin might be the focus of the trade, diversification across different assets can reduce risk. Diversifying your portfolio with a mix of cryptocurrencies, or even other asset classes, can help spread and mitigate risk, as the performance of these assets can be uncorrelated

• Risk-reward ratio. Understanding the risk-reward ratio, i.e. how much risk is being taken in comparison to the potential reward is vital. Traders should aim for trades where the potential upside outweighs the downside, ensuring that over time, profits will cover any losses incurred on other trades

• Continuous education. Lastly, continuous education is a form of risk management. Keeping abreast of market trends, understanding new analysis tools, and learning from past trades are all practices that contribute to more informed decision-making and reduced risk over time