Hi all.
If you don't know I am an active trader and I manage my own money for 5 years now with great success.
My journey with trading the markets actually began with mining and then trading bitcoin in 2013.
In today's topic I would like to address the safest way to trade bitcoin. It is no secret that trading is a massive business
and the world of finance is a big market where people make a ton of money.
Of course, there are risks and if you don't know what you're doing you can loose all your savings.
To start I would like to inspect the basics of the markets and placing trades.
A market is a place where people come to buy and sell goods. In ancient China,
the largest market was called the Silk Road. Many traders went there to make profits by selling their goods.
Silk was the top commodity back in those days, and ancient aristocracy would give anything to get their hands on it.
In the West in particularly silk was extremely expensive.
The point is a market has two sides those who sell (ASK) and those who buy (BID).
A seller has a certain product that attracts attention and he asks for a certain price for it. And a buyer
is looking for a good deal and heckles for a bargain, so he bids on the items he wants to buy.
Once the deal is reached it is recorded in the Settlement ledger and the current price of the product is updated.
Then the next round starts again. And so you have a market. If you hear a trader say lets make a market,
this means that there is something they want to trade and there are sellers and buyers available.
The market is made when there are bids and sellers asking for a price.
In a modern day trading this auction style trading is done by computers with the help of fast algorithms that
spot a good deal on a product that is being traded. High frequency trading has taken the place over the
ancient Silk Road markets when people used to scream at each other to get the best deal.
As of writing this a price of Bitcoin is 14750 USD. The BID is $14733.000 and the ASK is $14760.000.
In today's lesson if you are a beginner and want to trade bitcoin look for an exchange that has tight BID/ASK, or
tight markets. You don't want the spread to be big, since if you're trading actively by buying and selling a bitcoin
you don't want to loose money in a market that has large spreads.
For example, lets say you bought a bitcoin for a price of the asking price of $14,760 and now if you want to sell it back
at the same time the bid price is only $14,733 so you're loosing approximately $30 dollars just from having a large
BID/ASK spread.
This is a very good way to make money and airport exchanges have been doing that for years. Next time you're travelling to Europe notice how much an airport exchange asks for a currency and how much they sell it for.
Hopefully this was educational for you guys and hit me up if you have any questions. I'm waiting for my new microphone to show up so I can make more videos as well.
Peace