Starting out as a beginner in the world of bitcoin trading can be pretty confusing. You have to do a lot of research and you need to keep up to date with the bitcoin news. Locally in South Africa, but also international news. bitcoin trading for beginners start 1

But where do you start?

This depends on your current level of expertise and skills. It is one of the most important assessment factors to get right. For the purpose of this series of posts, we are going to assume that you have sufficient computer skills, so we will not be focussing on technical requirements.

1. Open a trading account on an exchange

You can open a trading account with iceCUBED bitcoin Exchange in South Africa to trade the bitcoin / Rand market. Click here

2. Follow the bitcoin market

Follow Twitter accounts like @ice3x or @bitcoinZAR for up to date information on the state of Bitcoin in South Africa. There are many good resources like Cryptocoincharts.info with charts and news resources. It is sensible to immerse yourself in the Bitcoin industry before attempting to become the next bitcoin millionaire trader. The bitcoin market like any other market is influenced by technical indicators, market sentiment and also world events (bitcoin spiked during the Cyprus financial crisis). In terms of trading on ice3x.com, bitcoin is an asset. The value of bitcoin can go up and down by as much as 50% in one day Although not often, this has happened! Bitcoin trading for beginners can be daunting but with effort you can master this market the same as you would any other market.

3. Create a bitcoin trading strategy

This is the single most important thing missed by when searching “bitcoin trading for beginners2. Lots of people and websites will tell you where to trade bitcoin, but nobody will share their trading secrets. Well you don’t need that, it is simple, all you need is a strategy, patience and determination. It doesn’t have to be a fancy strategy. Simply put, you need a plan. You could for example say that you will risk R1000 on 10 trades of R100 each with a projected return of 10% over a period of 30 days. You will not make money on every single trade. Nobody in the world can do that, but by spreading your risk and planning your trades, it is possible to realise a profit** of around 6%-9% per month without risking your life savings.

4. Test your trading strategy

Execute your strategy exactly as planned but limit this to testing the strategy first. Start with a few small trades, to get familiar with the market and the environment. You will learn a lot as you pick up new information streams to assist in testing your strategy. Remember you can trade tiny amounts as you want to test your strategy only.

5. Execute and refine your trading strategy

So if you have decided to place 10 trades worth R1000 a trade, and your first 3 or 4 trades realise a loss, you need to change your strategy. This may be changing the time period or profit percentage which you would like. Ask yourself questions like: How are the commodity markets doing? or Has there been any significant changes to the bitcoin price when the ZAR/USD price fluctuates?

6. Review your administration and accounting

Often something thought of as an after thought at the end of the month. This would be a big mistake. Your bitcoin trading administration and accounting is one of the most important tools you have to make your trading decisions. Review your accounting daily and polish your Excel skills. Trawling over your trades will do much to improve your gut feel for gauging the market sentiment.

Bitcoin Trading for Beginners – The Basics

Traditional Trading vs. Arbitrage Trading

Traditional Trading

In its simplest form traditional trading can be seen as buying bitcoin when the price is low and selling it when the price is high on a single market over a set period of time. This is not to be confused with binary options trading. Traditional bitcoin trading for beginners usually starts with an account on a single bitcoin exchange.

Arbitrage Trading

The least riskiest bitcoin trading strategy for beginners is probably arbitrage trading. What this simply means, is that you buy bitcoin from one exchange and sell it on another, taking advantage of the price difference between the two markets.

Markets

There are many markets and exchanges where you can trade bitcoin. Most of the reputable bitcoin exchanges like iceCUBED X, will require you to FICA your account. A single exchange can provide access to more that one market, indicated by the trading pairs they offer. For example BTC/ZAR or BTC/USD (The official trading symbol for bitcoin is XBT, but the most used and accepted symbol is BTC). For the purpose of this blog we are looking at the BTC/ZAR market on ice3x.com bitcoin exchange.

Currencies

When trading bitcoin, you can do so in many currencies. In South Africa, the easiest way to trade bitcoin, is in Rand (ZAR). In order to trade bitcoin in any other currency like Dollar or Euro you need to have a financial structure in place with a reputable Forex company and be aware of the limitations on buying foreign currency in South Africa.

TAX

You need to seek independent tax advice in order to understand how you may be liable for TAX on profits that you make when trading bitcoin as well as the record keeping requirements that may apply to you personally. There is no “blanket” answer in regards to the taxation of profits you make when trading bitcoin. Each individual will have different circumstances and therefore different rules may apply. For example, one trader might be trading full time, with a large turnover, whilst another trader might be selling bitcoin that was “mined” as opposed to “exchanged”, so you can see how different taxation rules may apply.

SARB

If you are trading bitcoin on an international exchange you need specialist advice on Forex transactions and Forex controls in South Africa. This is a very well regulated and managed industry overseen by the South African Reserve Bank. This topic is not to be dismissed and you need to be highly disciplined in your accounting and administration of your bitcoin trades.   Enjoy your trading and may the pips roll in.   [shareaholic app=”share_buttons” id=”19178829″]

15Mar 2020
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 Disclaimer

**This article is intended to educate and should in no way be seen as investment advice or an enticement to use the ice3x.com platform. Bitcoin is highly volatile with big profit opportunities but you should also remember that you could lose part or all of your investment whenever you take part in any high risk investment. Bitcoin trading is not a regulated industry in South Africa, which in itself carries additional risks. IF YOU ARE NOT AN ASTUTE BITCOIN TRADER, SEEK INDEPENDENT FINANCIAL ADVICE BEFORE MAKING ANY INVESTMENTS. 
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Disclaimer Notice:

This article is intended to educate and should in no way be seen as investment advice or an enticement to use the ice3x.com platform. Bitcoin is highly volatile with big profit opportunities but you should also remember that you could lose part or all of your investment whenever you take part in any high risk investment. Bitcoin trading is not a regulated industry in South Africa, which in itself carries additional risks. IF YOU ARE NOT AN ASTUTE BITCOIN TRADER, SEEK INDEPENDENT FINANCIAL ADVICE BEFORE MAKING ANY INVESTMENTS.

 

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