Trading Bitcoin via Binary Options

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Time does not stand still, and along with it, new types of financial instruments appear on the market. Some of them are very promising in terms of financial investments and speculative trading and have already attracted the attention of many investors. Today we will talk about the Bitcoin cryptocurrency, which everyone has probably heard about, at least indirectly.

What is it, and what are the advantages of trading bitcoins in Binary Options – in our today’s material.


How to trade Bitcoin on BO?

Trading Bitcoin via Binary Options

Operations with Bitcoins are allowed in many countries. This cryptocurrency is well known in the world of Forex and binary options, it is constantly gaining popularity around the world. You can get good income on bitcoins, but it is worth considering the specifics of this currency when choosing the most suitable tools for analyzing charts.

Development of the binary options market

Trading Bitcoin via Binary Options

Every year, the volume of BO transactions is increasing both due to the increase in the number of companies that provide broker services, and due to the emergence of modern trading platforms that make the once complex work of market analysis easier. In the world of binary options, there are also new currency pairs, stocks, indices that were not previously available. A fundamentally new class of currency assets can be called the bitcoin electronic currency. Many players in the binary options market have decided to switch to it, while it is suitable for both short-term and long-term trades.

What it is?

Before deciding to switch to Bitcoin, which is designated BTC in the trading terminal, you should understand what it is and what factors can affect its quotes. BTC is a type of electronic currency that has a deep degree of encryption. Its popularity is due to the fact that in recent years, due to the increase in the volume of transactions carried out through electronic payments, a secure currency was required. The Bitcoin currency has become the most popular cryptocurrency, which determined its appearance among various brokers. An interesting fact is that bitcoin became the ancestor of a trading network abstracted from politics and global financial structures. Unlike many other similar networks, the network in question does not have a central authority or intermediaries, all users become the regulator.

This currency was first described in 1998, the first version of Bitcoin was developed in 2009. At that time, the volume of transactions on the Internet was significantly inferior to the current one, but due to the growth in the number of online stores, the development of the Forex and Binary Options market, the cryptocurrency developed at a phenomenal rate.

Who controls the created network?

Trading Bitcoin via Binary Options

Regular currencies and cryptocurrencies have quite a few distinctive features. As noted earlier, Bitcoin does not have a regulatory bank or company, nor does it have owners. The network is supported by the system participants, that is, each operation with a different currency determines the quote and many other points.

Some developers began to release software designed to work with cryptocurrencies. However, no one can impose tools for working with Bitcoin. The currency itself exists only on the basis of a full-fledged consensus between the users of the system.

How does the system under consideration work?

Trading Bitcoin via Binary Options

If we consider Bitcoin from the user’s point of view, then the following features can be distinguished:

  1. The system is represented by nothing more than a program for a computer or a mobile application;
  2. The application allows you to open your own electronic wallet, where funds will be stored. At the same time, the set of functions is standard: each user can receive and transfer the system currency.

However, the network is not as simple as it seems at first glance. In order to be able to confirm the transfers made, an electronic ledger called blockchain is maintained. It records all transactions that are protected by digital signatures.

Is currency used by people?

Trading Bitcoin via Binary Options

Initially, the currency in question was not very popular, individuals practically did not use it, but today the volume of transactions in Bitcoin is growing exponentially.

Currency used:

  1. Construction firms;
  2. Restaurants;
  3. Real estate agencies;
  4. Various online services;
  5. Legal companies.

The capitalization was $ 8 billion. Anyone can buy Bitcoin through exchanges that form their own rate. An example is the large Chinese exchange BTCChina. Also, some establishments began to accept payments in cryptocurrency.

Bitcoin in the binary options market

Trading Bitcoin via Binary Options

Not all brokers work with cryptocurrency yet, although all large brokerage companies have already noticed the rapid growth in the volume of transactions in it.

This currency can be used on the binary options exchange for opening an account and investing:

  1. Opening an account. Some brokers took care of their clients, who have accounts in the currency in question, and allowed it to be used in order to replenish the deposit. Thus, you can save on the commissions that currency exchange exchanges charge for the provision of their services. You can use such a currency to invest in a variety of contracts, but it is recommended to withdraw funds at the time of the growth of the cryptocurrency rate – so you can still make money on the best exchange rate;
  2. Investing in Bitcoin. Bets are placed on a rise or fall. The fluctuation of the exchange rate occurs in much the same way as for other currencies. In relation to the US dollar, the currency pair is designated BTCUSD. Not many options exchange participants are ready to switch to a new currency. Therefore, you can often find this symbol only in an additional dialog box, which displays all available currency pairs, stocks and indices.

This currency is still young, and not all traders are familiar with it , which determines the sluggishness of brokers to include BTC in the list of available currency pairs for investment. Given the pace of development of Bitcoin, in the near future, all major brokers should provide it for selection.

Features of BTC Market Analytics

Trading Bitcoin via Binary Options

Like every currency, the considered one has quite a few nuances that should be taken into account when analyzing the market. When considering the BTCUSD currency pair, the following points can be noted:

Global upward trend

Due to the fact that this cryptocurrency appeared relatively recently, when considering the highest timeframe, a global upward trend can be distinguished . However, this indicator is much more important for Forex than for the Binary Options market, where the contract is held for no more than a couple of hours or days. But when developing a strategy, it should be borne in mind that while most traders decide to buy cryptocurrency, and not sell it.

Trading Bitcoin via Binary Options
Trade 7 days a week

If we compare bitcoins with other currencies, then we can distinguish the possibility of trading not 5 days, but 7. Although many experienced traders recommend not to open contracts on weekends due to the increased likelihood of false signals due to speculation.

Impact of news

It would seem that bitcoins are not tied to politics and a specific country, which means that news should not affect the course. However, this is not at all the case. Bitcoins are highly influenced by news , which means that a trading strategy should include a fundamentalanalysis. An example is a situation when a large fund invests in this currency – its rate will surely increase in the near future. You can also come across a situation when it is worth playing short, for example, in some country bitcoins were banned or a large exchange that was engaged in the exchange of this currency was hacked. The complexity of fundamental analysis lies in the fact that only foreign companies work with this currency in large volumes, and at the same time they can hide the operations being carried out. Therefore, it is quite difficult to find useful news.

Technical analysis as the basis of the developed strategy

Let’s apply technical analysis as well, since a sharp change in prices is observed only when important news is released. Often, a clear trend is formed that can be identified using a conventional moving average . Nevertheless, the previous point clearly indicates that it is practically impossible to do only with technical analysis.

Trading Bitcoin via Binary Options
High probability of gaps

Despite the fact that quotes on the BO market of this currency, unlike Forex, are received throughout the week and there are no restrictions on investment, there is a great possibility of  gaps  – price jumps with a large gap between the price at which the closing and opening took place. The value of gaps can reach several tens or even hundreds of points. Often, a gap occurs when important news is released and the market lacks liquidity .

Trading Bitcoin via Binary Options
Currency activity at any time of the day

If some currencies are characterized by the dependence of activity on the time of day, for example, when the London Stock Exchange opens, all currency pairs with the euro come into activity, then in this case the activity can be observed at any time of the day, and it does not depend on which exchange operates in this moment. Therefore, you should constantly be prepared for the fact that the price will begin to fluctuate greatly and the market will begin to move.

Lack of special tools for MTC analysis

So far, indicators have not been created specifically for BTC, which can create many problems for beginners . Of course, you can customize the existing ones for the selected instrument, but only an experienced trader can set all the parameters correctly by selecting and testing the displayed indicators.
You should not immediately switch to a real bitcoin account, since the currency has many of its specific qualities, which you should first encounter and only then hone your strategy.

What are the best trading strategies?

Trading Bitcoin via Binary Options

There are several strategies that are applicable to this currency:

  1. Consideration of the trend in the execution of the contract after a short period of time. In this case, you can use the   H1 timeframe ,  contracts are concluded according to the trend. Such strategies provide for the creation of a corridor from the line of support and resistance; various indicators can be used to track the trend;
  2. Boxed and breakout strategies can also be used.

Let’s consider one of the strategies in more detail:

To find the entry point, two standard indicators are used: EMA with a period setting of 100 and Stochastic with the main parameters 3 and 3.

Trading Bitcoin via Binary Options

Timeframe H1. If the price is below the constructed EMA line, then only entry to a decrease is considered, and vice versa.

Trading Bitcoin via Binary Options
The Stochastic’s signal to conclude a contract is when the lines cross. If they crossed downwards, then a down trade should be opened.

Trading Bitcoin via Binary Options
At the moment of crossing (indicated by a dotted line), two Stochastic lines should be in the corridor from 20 to 80.

Trading Bitcoin via Binary Options
Let’s talk a little about expiration dates. In the case of BO trading, it is fixed, and only some brokers allow the contract to be executed early. Therefore, the expiration period in the case of using a particular trading strategy is selected on the basis of the tests carried out when using a demo account . In this case, it is recommended to set the expiration time of 2-4 hours.

The attractiveness of Bitcoin is due to the fact that it is not yet subject to strong speculation, therefore, fraudulent movements are rarely found in the market, the trend is formed quickly and has high stability.


Summing up

Trading Bitcoin via Binary Options

Many assets that can be managed in the binary options market have long reached their price peaks, which means that bright trends can only form when very serious news comes out. Cryptocurrency is a young asset class that is growing rapidly and guarantees great prospects for Forex and options market participants. However, it should be borne in mind that the currency and the system itself were created without taking into account world rules, the high confidentiality of the accounts of the system participants, the absence of restrictions on working with accounts, and does not work at all with the laws adopted in many countries. Taking into account the high competition for the national currency, as well as the inability to control or account for transactions, some states prohibit the use of such currencies to pay for services and exchange, all such actions are considered illegal.Taking into account the constantly emerging economic crises, which to a lesser extent concern the cryptocurrency, it is quite difficult to predict the development of Bitcoin, but so far it is possible to carry out transactions on it in many large countries.

As for directly analyzing the market and concluding contracts for this currency, everything is quite simple here: all instruments, indicators and trading strategies used for USD or other currencies are applicable to it. Of course, you will need to change the settings, take into account the likelihood of gaps and the intensity of price movement even on weekends. Many people choose BTC as a diversification of the entire investment package, since it practically does not correlate with other, even widespread and popular instruments.

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