How to Trade Bitcoin: The Basics Information You Need

Bitcoin ATMs allow you to insert U.S. Dollars (or other traditional fiat currency) and receive the equivalent amount of Bitcoin. In general, these are convenient and user-friendly ways to convert traditional currency to Bitcoin. Transactions are typically instant.

There are several providers of Bitcoin ATMs. You may have to create an account with the ATM provider that connects to your phone number and email address. Some will also require you to present a photo ID, though this is typically for your own security and kept confidential by the company.

Bitcoin ATMs charge a fee for converting your currency. Typically, these fees range from 5-12%. You can perform online research and even call the vendor to confirm the exact fee for your transaction. Higher volume transactions tend to have lower fees, but there are also usually limits on how much

Bitcoin you can buy or sell at a given ATM in a 24-hour period. Convenience is a major reason Bitcoin ATMs are growing in popularity, and many investors are willing to pay higher fees for these instant transactions. Another benefit of the Bitcoin ATM is that you can sell, or "cash out" part or all of your Bitcoin stash at any time. If you live in a major city, you may have your pick of a variety of Bitcoin ATM providers. However, these tools are not yet universal.

Many of the exchange apps are also trading platforms. If you want to buy and sell your Bitcoin on the same platform, this is one detail to look into when deciding which exchange to use. Examples of these platforms include

Each of these examples allows you to buy Bitcoin with your credit card, debit card, or bank account. Simply click "Buy" within the app to buy Bitcoin. You can also use these apps to sell your Bitcoin when you are ready.

The major benefits of using these exchanges are accessibility—anyone can use them from any location—and convenience. While most of them allow you to buy Bitcoin from your phone, there may be a 1-3 waiting period for apps like Circle, which draw directly from your bank account.

Since the value of Bitcoin can change dramatically within a matter of hours, this is a factor you will want to consider when developing your trading plan and deciding whether to use an exchange.

You may choose to buy Bitcoin from another person who has invested in the cryptocurrency. Online platforms like LocalBitcoin can help you find individuals looking to buy and sell Bitcoin near you. Generally, these platforms will show how many exchanges a user has performed, and some even allow for reviews.

Look for someone who is experienced. Even if you do not opt to buy Bitcoin with peer-to-peer purchasing, you may decide to sell your Bitcoin this way. Reputation is everything on peer-to-peer platforms. If you choose to sell on such a platform, you may have to charge a lower rate than a more established seller.

Generally it is best to start small if you are new to Bitcoin. While you are still refining your methods for how to trade Bitcoin, consider doing a trial run with an amount of money you can afford to lose. Even trading $200-$500 worth of Bitcoin will help you gain experience to learn from.

You will also want to set a clearly defined goal for your trading. How much do you hope to make, and in what period of time? Write down your goal, how much you're investing initially, and stick to your plan.

Use any of the methods described above to purchase your pre-determined amount of Bitcoin.

Some of the research you performed when deciding how to buy Bitcoin will also serve you here. However, you may choose to store your Bitcoin in a wallet after making your initial purchase, then choose the most profitable way for you to sell when the value of Bitcoin is higher than when you purchased it.

Use the time-frame you established in Step 1 and set a time to check in to see how your trading methods are going. Are you making a profit? If so, try to figure out what is working for you.

The same is true of loss. If you find you are losing money, the next step can help you determine why so that you can make the appropriate adjustments to your Bitcoin trading strategy. If you do lose some money, understand that this is normal. Failure is only failure if you don't learn from it.

If you're lost or unsure what is and is not working about your trading strategy, don't be afraid to ask for help. While there are professionals who specialize in Bitcoin, particularly with more advanced uses such as holding Bitcoin in a self-directed IRA, much of the information you will need for basic trading is freely available online.

Find someone who has successfully done what you hope to achieve, and if necessary, pay them for their time. Mentorship is critical to any kind of investing plan.