Becoming a Bitcoin Trader With eToro

Becoming a Bitcoin Trader With eToro

eToro is a great platform to start experimenting with becoming a bitcoin trader. They offer a free demo account where you can test you skills and is the worlds leading social trading platform.

How Start trading crypto on eToro

The first thing you need is a bitcoin wallet you can either make your own blockhain wallet, paper wallet or store your bitcoin on a wallet at your selected exchange. eToro offers free and safe bitcoin wallets for all their customers.

Various cryptocurrency logos.
Various cryptocurrency logos.

When you have created your account or demo account you can start trading crypto with low transaction fees on eToro. It has a wide range of currencies available and is a great place to buy bitcoin.  It is possible to store your crypto within eToro and quickly sell it if you want to withdraw your profits.

Crypto trading strategies

Bitcoin traders are always finding new and better solution on how to trade bitcoin profitably. This can be hard and requires a lot of trial and error due the the volatility of bitcoin. The methods we will teach here can provide a good baseline for new crypto traders.

Keep in mind that it is very possible to lose money trading bitcoin. You capital is therefore at your own risk when you trade cryptocurrencies, since it is still trading and speculation at the end of the day.

This is why we always recommend starting with the eToro demo account to get a sense of you well you are trading and what strategies work well for you.

Day trading

Day trading is one of the most well-known crypto trading strategies, but it is also on of the hardest to be successful at you might have heard that 99% of all day traders fail to make a profit long-term.

Day trading means that you enter and exit positions on the same day. Meaning shorter and much more frequent trades. Traders aim to capitalize on volatile intraday prices and this is also why bitcoin is very popular to trade due to its high volatility.

Digital currency platforms are also open 24/7 meaning that day traders can always enter and exit the market, which is a full-time day traders dream, compared to the stock market that closes in the evening and weekends.

Swing trading

Swing trading is a longer-term strategy that often means that you hold your positions for a longer time than a day, but typically still exit within a few weeks. Swing trading is often seen as the middle child of trend trading and day trading.

Swing traders take advantage of volatility yet again making crypto swing trading very exciting. Swing traders use a combination of fundamental factors and technical analysis. Swing trading is a more convenient method of trading due to the lower requirement of time invested in front of your trading platform screen.

Swing traders also has the advantage that they have longer time to evaluate their positions and take profit or cut their losses before they grow, compared to day trading.

Trend trading

This is also sometimes called position trading it is a strategy that involves entering your positions over a longer period for at least a couple of months “riding the wave” up. Trend traders enters lon positions in an uptrend and a short position in a downtrend.

This is typically based on fundamental analysis, but it is not always the case. An essential part about trend trading is that is assumes that the asset will follow the trend for a longer period either up or down.

Trend trading is often ideal for new traders if they do a proper research and due diligence while managing their risk.

Best short-term bitcoin trading strategy

You need to follow the charts closely on your potential cryptos and when you notice that one of them is at a new 20-day low is when you need to be ready to enter your position.

ABBC coin charts.
ABBC coin charts.

When a valid 20-day low pattern is confirmed it is time to wait for the crypto to break the 20-day moving average. This is when you enter your position.

Remember to place a protective stop-loss below the swing low prior to the 20 day moving average breakout.

Next step is to take your profits at the 50 % Fibonacci retracement level of the previous prevailing downtrend

Chart explaining trading actions based on the market movements.
Chart explaining trading actions based on the market movements.

Closing thoughts

Devising a crypto trading strategy before you buy bitcoin can be a smart way to be a more profitable trader in the long term. We covered some of the most basic and common crypto trading strategies so you can select the strategy that suits your risk profile and time investment.

You need to experiment in order to find what works the best for you and therefore making an eToro demo account is a great way to test various strategies and see where you can be a profitable crypto trader.

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