Cryptocurrency Basics Concepts

Learning to trade the btcusd market is much easier for beginners when beginners start by learning the bitcoin basics. This way the other 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 concepts.

The bitcoin basics that traders should learn first before starting bitcoin trading are:

What is BTCUSD Crypto?

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 earn 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 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 instruments seem to be moving up and up and they sell undervalued crypto instruments because these instruments seem as if they will continue to move lower.

Just like in stock market successful trader buy stocks when the stock bitcoin price is low & sell stocks when the stock bitcoin price is high. This is the same 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 price at which these instruments are exchange is determined by the bitcoin quote.

BTCUSD Crypto is quoted in the format of decimal places.

What's a Pip?

Cryptocurrency is quoted in the format of decimal places. Second last decimal point represents a Pip which is the smallest movement used to calculate profit & loss in market moves.

Pip means Bitcoin Price Interest Point: it's a one point move in the bitcoin 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 lots & the Micro crypto lots which are fractions of the bitcoin trading mini lots.

What is Bitcoin Leverage?

Because not many traders can afford to trade standard lots which require a lot of money to trade, there's bitcoin leverage in Bitcoin which means that traders can borrow money & use the borrowed money to make trade transactions with. For example 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 leverage the trader will have a total of $10,000 multiplied by 5, which means the trader will have a total of $50,000 dollars. This leverage is what makes Bitcoin accessible to retail bitcoin traders because retail traders can start with little capital of their own & use bitcoin leverage to borrow the rest of funds required for trading. Money that the trader deposits is referred to as a bitcoin trader’s margin & a btc usd trader can continue borrowing money using this leverage 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 trades 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 leveraged trade. Margin also can be explained as the deposit a bitcoin trader is required to maintain so that to keep the open trade positions. This margin is a percent of trading account equity that has to be set aside & allocated as a margin deposit for the open trade positions which are held by a bitcoin trader.

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