The Bitcoin exchanges are the places wherein Bitcoin as an alternative to fiat currencies can be traded. Bitcoin as a digital currency is not completely decentralized because it still depends on the servers and network infrastructure of Bitcoin Exchanges. The Bitcoin exchanges also function as Bitcoin wallets because they allow their account holders to store, send and receive Bitcoins.
Bitcoin traders must register for a Bitcoin Exchange and create a Bitcoin Wallet first before they can begin trading Bitcoins through the exchange. Most Bitcoin exchanges do not charge any fees for opening an account but some may ask for deposit fees which vary from one exchange to another. Some Bitcoin exchanges also ask for withdrawal fees which could be either fixed or percentage-based fees depending on the nature of the transaction. So if you are interested in bitcoin investment and want to step yourself into it, then visit Bitcoin Profit and explore this site.
Bitcoin traders make profits by buying Bitcoin at a low price and selling Bitcoin at a high price – known as ‘buy low, sell high’. Bitcoin exchanges work in the same way stock exchanges do with Bitcoin being equivalent to stocks. Bitcoin traders can buy Bitcoin from their account on an exchange by paying for it using currency they have bought from another currency or from another exchange.
Bitcoin traders must be aware that fluctuations in Bitcoin prices are usually drastic and unpredictable. The Bitcoin market is also quite illiquid because there are not enough buyers and sellers to create significant liquidity, especially during small trading periods. It is therefore advised that Bitcoin traders should only trade with what they can afford to lose, considering the fact that Bitcoins are not backed by any government or central bank which could intervene if Bitcoins drop dramatically in value.
Bitcoin exchanges provide Bitcoin traders with Bitcoin charts that are used to track Bitcoin exchange rates or values over a certain period of time so they can identify the best times to buy Bitcoins and sell them at a profit. Bitcoin trading is also an excellent way for Bitcoin enthusiasts to learn more about Bitcoins, especially if people would like to know what determines Bitcoin prices at any point in time.
More About Bitcoin Exchanges
Bitcoin exchanges have become very popular in recent years because many people using Bitcoin want an alternative place where they can trade it for fiat currencies rather than having to deal with Bitcoin sellers on their own or directly through online forums. Most Bitcoin exchanges are similar in nature but different in size which consequently affects the number of tradable Bitcoins they have at any given time. Bitcoin exchanges also vary in terms of security with some Bitcoin exchanges asking for no or very little information about their account holders while others ask for more intensive verification processes including verification of identity and proof of residence which usually take longer to process.
Bitcoin traders can choose the Bitcoin exchange where they want to open an account depending on the number of tradable Bitcoins, Bitcoin rates, and other factors like payment modes accepted by each Bitcoin exchange. The payment methods are usually limited to wire transfers, credit cards, or alternative payment methods that are available only through specific Bitcoin exchanges because most Bitcoin transactions are irreversible.
More About Bitcoin Charts
Bitcoin charts are tools that enable Bitcoin traders to track the movement of Bitcoin prices over a certain period of time so they can identify trends and make predictions about Bitcoin prices during the coming days. Bitcoin charts also help Bitcoin traders to determine where they should place buy and sell orders so they can earn maximum profits from their Bitcoin trades. Bitcoin charting is made easier by price indicators like:
- Volume indicators: volume refers to the number of Bitcoins exchanged over a certain period of time and Bitcoin traders use volume indicator tools to determine whether there is an increase or decrease in Bitcoin trading activities over a certain period of time
- Relative Strength Index (RSI): RSI measures the size of recent gains versus the size of recent losses for Bitcoin within a certain time frame; it generates a number that ranges between 0 and 100 which increases as Bitcoin makes more gains – if RSI reaches 30 it means Bitcoin is overbought and Bitcoin traders should sell off Bitcoins in exchange for fiat currencies
- Williams %R: Williams %R shows Bitcoin traders whether Bitcoin is overbought or oversold; when Bitcoin is in an upward trend it will read between 0 and -20 which indicates that Bitcoin can be bought because Bitcoin prices are low but when Bitcoin is in a downward trend Bitcoin will read between -80 and 0 – this means Bitcoin traders should sell their Bitcoins because Bitcoin prices are high.