Make Money with Bitcoin: the tips to succeed
Published: December 21, 2020 by Andrew
Are you constantly looking for clear advice on how to Make Money with Bitcoin, but have not found anything satisfying so far?
Well, don’t be afraid and don’t give up: you are in the right place!
In fact, in the next few lines we have tried to take action of what are the tips that traders starting from scratch should read and metabolize before launching too much into the financial markets in order to make money with Bitcoin.
We therefore recommend that you take some time, read carefully what we have to say and, in the end, share your reflections with us in the comments area.
Make Money with Bitcoin thanks to CFDs
When we will share with you the best ways to make money with Bitcon, we will explicitly refer to Bitcoin CFDs. Do you know what they are?
In short, trading contracts for difference, more commonly known as CFDs, are an increasingly popular financial instrument among traders, which will allow you to benefit from the movement of the price of the underlying asset (in this case, the cryptocurrency), without having to own and keep it.
It is therefore a way to invest in Bitcoin as an alternative to buying with exchanges, and certainly more convenient!
Having clarified this, let’s get to the heart of our tips to make money with Bitcoin!
Start with a Demo Account
The first tip we have already partly anticipated: use a demo account!
Among the best online CFD brokers, you will notice that the majority offer free demo accounts. These accounts allow you to experience all the features of the platform without risking your own money. Similarly, you will certainly not be able to earn money using demo accounts (only virtual money is used here!), but they can still help you develop a strategy and get used to the platform. And, for the moment, that’s exactly what we want.
For example, eToro (here the official website) allows you to open a demo account with a very quick registration (here). Due to the high risk involved in trading with CFDs, it is important that you are able to practice for a long time with a demo account, and only once you feel fully comfortable, switch to real capital trading.
Even IQ Option (here the official website) allows you to open a free demo account here. Practice a little with both platforms and, after a few days, you will certainly be able to understand which one is best for you!
Use Stop Orders
Before opening a position, remember to set both the up and down limits of your trade.
In this way, once the set value is reached, the position will be automatically closed.
While this may seem counter-intuitive, especially if the asset continues to move in the direction you predicted and, therefore, even though you are generating gains, setting automatic limits actually reduces the risk of emotional trading, one of the most serious risks a novice trader could run.
Stop-loss orders, in particular, are extremely useful, as they will prevent you from losing all your invested capital!
Don’t stop learning, if you want to make money with Bitcoin
Even if you have built an enviable investment portfolio and even if you may have years of experience and success behind you, one thing is certain: you will never have learned enough. The CFD market is constantly evolving, with new investment platforms and new underlying assets. Bitcoin CFDs have become popular recently, as has social trading, a pioneering concept from eToro, which you can see here.
By understanding market charts and developing your trading skills you can reduce potential losses. Nonetheless, CFDs remain a high-risk trading product, so much so that most retail investor accounts are at a loss.
Therefore, it is worth keeping in mind the importance of continuing education.
Set the Leverage
Although Leverage may seem like “free money”, you should understand that it is, in reality, a loan that you have to repay, even if the price of the asset does not evolve in the direction you predicted. It is therefore better to try to use a lower leverage, because this limits the exposure to risk, or perhaps avoid trading in leverage, especially for the first period.
If you can’t do without financial leverage, an alternative is to lower the amount of your trading position. Remember that this is a high-risk tool, and therefore you should approach it with the utmost caution.
Learn more: Financial Leverage
Plan your Investments
Most investors looking to achieve success with cryptocurrency trading aim for a single investment and… normally end up losing their money. Instead, focus on making multiple, smaller investments and try to make a sustainable profit over time.
We therefore recommend that you plan your investment strategy in advance, once all the costs of online trading have been calculated. Therefore try to identify your “breakeven point” and, consequently, structure a coherent path in order to reach the target.
Make every trade and position fit your long-term strategy.
Don’t be stubborn about a loss
If an operation did not go according to your plans, do not overdo the new positions for the sole purpose of trying to recover the losses.
If you have not exposed yourself to unsustainable risks, then you should be able to manage the loss. Therefore, remember to always use the limits on the positions that we already had the opportunity to comment a few lines ago when we talked about stop loss and take profit, and try to keep emotions out of trading.
Your decisions should be based on logic, reason and strategy. And remember that tomorrow is – really! – another day. Losses should therefore not burden your reasoning: all traders face many losses, and you will certainly not be an exception!
Diversify your investment
Based on your research and experience, you will likely develop “one of a kind” feelings and insights.
While it may be beneficial to follow these insights, we recommend that you never invest all of your funds in the same underlying assets.
In fact, remember that the best brokers such as eToro (official website) and IQ Option (official website) offer you a wide variety of assets, ranging from Forex to stocks, passing through dozens of different cryptocurrencies. Therefore, avoid concentrating your capital too much in a few positions and in a few assets.
Diversification strategies also need to be well planned. Try experimenting with different stock options with the demo accounts that the same online trading platforms already mentioned offer you. It will be the right opportunity to try to maximize the return on your portfolio by lowering the level of risk.
Sometimes, to make money with Bitcoin, you just have to wait
Typically, to start seeing a return on your cryptocurrency CFD investment, you need to have an overall performance of at least 60% successful trades and 40% unsuccessful trades.
Sometimes, however, you will notice that the best way to achieve this is not to invest in as many trades as possible, but to wait for the right moment.
Remember that markets can be slow to react, and sometimes – conversely – you can be slow to react to them. So try to be patient when trading, especially if you feel you have missed a significant move. You will certainly have other opportunities in the near future, and it is certainly not convenient to invest in a causal or too impetuous and poorly reasoned way on the market for the sole purpose of trying to make up for lost time.
Monitor your investment
CFDs tend to be very volatile, especially when the underlying asset is represented by cryptocurrencies.
For this reason we suggest that you monitor its progress carefully. Limits such as stop losses and take profits can certainly intervene and execute the instructions you will give to the broker when you are not there, but you should not simply rely on them, because errors – even simple ones – are just around the corner.
You may also have to close your positions every day, so as not to incur the overnight expense of holding positions overnight. Also, you need to be aware of margin calls, which are certainly more common in CFDs, to fund your account or risk losing your invested funds.
To Make Money with Bitcoin you have to choose the right Broker
While the competition among CFD brokers is truly fierce, with new traders entering this lucrative market every day, the best ones can actually be counted on the fingers of one hand.
For example, eToro (here the official website) has proven for years to be reliable, affordable and generally superior to all others. In the case of eToro, it is important to remember that it offers the possibility to copy, in a completely automatic way, what the best investors in the world do.
Thanks to eToro it is therefore possible to immediately obtain the same results as the greatest experts and even learn from them to invest.You can sign up for free on eToro by clicking here
The same goes for IQ Option (official website), one of the most innovative brokers in the sector.
However, we are well aware that not every broker can meet the needs of all investors and all trading strategies in the same way.
Therefore, we recommend that you take a look at our reviews on the best online trading platforms, and carefully evaluate the most important factors to consider when deciding to choose an online CFD broker, such as commissions, the simplicity of the trading platform, investment, customer service, and so on.
Below, a full rundown of the best CFD brokers to invest in Bitcoin:
Min. Deposit: 50€
Min. Deposit: 100€
Min. Deposit: 10€
Min. Deposit: 250€
Min. Deposit: 100€
Min. Deposit: 250€
Learn to make forecasts (or copy those of the best ones)
To make money, you need to be able to predict Bitcoin. It is not as complicated as it may seem. Basically, there are two methods to get correct predictions:
- Fundamental Analysis: in these cases, the factors that move the price of Bitcoin are analyzed. For example, news of Bitcoin’s adoption as an accepted currency by some big online player is causing the price of cryptocurrency to skyrocket. Conversely, news of scams or legal problems bring it down.
- Technical Analysis: in this case only the graph is taken into consideration and mathematical analyzes are carried out to extrapolate the price trend.
Both types of analysis are fine, and the best investors can combine them appropriately. Obviously, for those who want, there is always the possibility to copy the best investors for free thanks to eToro.
Among other things, by copying it is possible to see live what the great experts do and therefore it is easier to learn.
Beware of Scams
Unfortunately, we cannot conclude this paragraph without referring to Bitcoin scams: the fact that it is possible to earn so much, has pushed a good number of scammers to create miraculous systems that should make you earn colossal figures in a short time.
Obviously, those who fall into the trap lose everything: for this reason those who want to make money with Bitcoin should learn to distinguish these scams, but it is not difficult.
First, if you decide to invest in cryptocurrencies, do so only with authorized and regulated platforms. Even simpler, if someone promises you too easy money, then they’re a scammer!
How to Make Money with Bitcoin: Conclusions
We hope that these tips have been useful for you to approach your earning path with bitcoins with greater awareness. Summarizing what you should do, here are the points we suggest you always keep in mind and reread when it seems to you that you have lost the right path:
- Study: the first thing you need to do is study the markets and financial products. In them, you will also find a lot of material on cryptocurrencies, a relatively new asset class that, as such, must be faced with innovative and unique analysis systems. Dwell with particular attention on this study material and remember that the training of a good trader never ends;
- Strategy: once you have studied enough, you can try to understand how to prepare a good trading strategy. You can of course take inspiration from the ones you will find online, but remember that each strategy is unique because every trader is! Therefore, make an effort to try to understand what your goals are and how you want to achieve them in a conscious and sustainable way;
- Demo Account: after the first two steps, all you have to do is apply your trading strategy in reality! To do this, however, do not immediately use your capital. The error rate in your early stages of trading (even, simply, operational) will in fact be very high. Therefore, it is better to open a demo account with one of the brokers we have suggested above, and use it to be able to test your intuitions in a safe environment. Only after you feel sufficiently comfortable with the broker’s trading platform and your strategy, will you be able to translate it on the financial markets;
- Invest: at this point all you have to do is break all delay and invest with cryptocurrencies! Always remember to open positions by setting stop loss and take profit, and to periodically review your strategy, also using the tools that the best known online brokers will make available to you for free.
We would like to invite you to talk about this and your experiences with cryptocurrencies in the comment space. It will be the right opportunity to learn more and compare yourself with our entire community, looking for the best ideas to be able to try to maximize your opportunities to make money with Bitcoin!
Yes, as long as you use reliable and safe investment platforms.
Everyone, even beginners starting from scratch
Bitcoin is a cryptocurrency, that is, a decentralized asset that works thanks to cryptography.
Make a profit by intelligently leveraging Bitcoin price changes (both rising and falling).