Cryptocurrency Basics Concepts
Learning to trade the btcusd trading market is much easier for beginners when beginners start by learning the bitcoin trading basics. This way the other cryptocurrency trading concepts become much easier to learn because the new bitcoin trader will have already learnt about the basic ideas before proceeding to the other bitcoin trading concepts.
The bitcoin basics that traders should learn first before starting bitcoin trading are:
What is Bitcoin?
Bitcoin is the simultaneous buying and selling of one financial instrument for another. Bitcoin traders buy & sell for speculation purpose and for the purpose of trying to make a profit. Bitcoin traders will buy bitcoin that they think will appreciate in value and sell bitcoin which they think will depreciate in value.
In Bitcoin traders buy crypto instruments when they become undervalued and sell crypto instruments when they become overvalued. This is the basic concept of trading bitcoin, as a beginner if you want to become successful when trading bitcoin you must learn to buy undervalued crypto instruments & sell overvalued crypto instruments. Many Bitcoin traders miss this concept and do the exact opposite buying overvalued crypto instruments because that is when these crypto instruments seem to be moving up and up and they sell undervalued crypto instruments because these crypto instruments seem as if they will continue to move lower.
Just like in stock market successful trader buy stocks when the stock bitcoin trading price is low & sell stocks when the stock bitcoin trading price is high. This is the same trading concept which traders should follow when trading bitcoin.
What is Bitcoin Crypto?
Bitcoin trading is the simultaneous exchange of one financial instrument for another, for this reason bitcoin is traded in symbols known as crypto trading instruments.
What is a Bitcoin Quote?
Because crypto instrument is traded in symbols, the bitcoin trading price at which these crypto instruments are exchange is determined by the bitcoin trading quote.
BTCUSD Crypto is quoted in the format of decimal places.
What is a Pip?
Cryptocurrency is quoted in the format of decimal places. Second last decimal place represents a Pip which is the smallest movement used to calculate profit & loss in cryptocurrency market moves.
Pip means Bitcoin Price Interest Point: it's a one point move in the bitcoin trading quote.
What is a Lot?
Bitcoin is traded in units known as lots. There is also the Mini lot which is made up of fractions of the standard crypto lots & the Micro crypto lots which are fractions of the bitcoin trading mini lots.
What is Bitcoin Trading Leverage?
Because not many traders can afford to trade standard crypto lots which require a lot of money to trade, there is bitcoin trading leverage in Bitcoin which means that traders can borrow money and use the borrowed money to make trades with. For example cryptocurrency leverage of 100:1 means that a trader with capital of $10,000 can borrow up to 5 times using the 5:1 cryptocurrency leverage option & therefore after borrowing using this bitcoin trading leverage the trader will have a total of $10,000 multiplied by 5, which means the trader will have a total of $50,000. This cryptocurrency leverage is what makes Bitcoin accessible to retail bitcoin traders because retail cryptocurrency traders can start with little capital of their own & use bitcoin leverage to borrow the rest of the money required for trading. Money that the trader deposits is referred to as a bitcoin trader’s margin & a trader can continue borrowing money using this cryptocurrency leverage option as long as they have the required margin in their trading account. This is why traders must have the required account balance in their account to open the trade transactions they want to.
What is BTCUSD Trading Margin?
Margin is the particular amount of money that a trader is required to put aside in order to continue holding an open bitcoin trading leveraged trade. Margin can also be explained as the deposit a trader is required to keep so as to maintain his open positions. This margin is a percentage of account equity that has to be set aside and allocated as a margin deposit for the open positions that are held by a bitcoin trader.
