Bitcoin Accounts
With the growth in the popularity of Bitcoin trading the demand for different types of Bitcoin trading accounts has also grown. The different account types available for trading Bitcoin are:
- Standard Account
- Micro Account
The type of Bitcoin trading account which a trader will choose depends on the amount of capital that a trader has for trading.
Standard BTCUSD Account
Bitcoin is traded in lots known as contracts. The standard lot for Bitcoin is made up of 1 Bitcoin. This 1 unit of Bitcoin is what makes one standard Bitcoin contract.
Therefore, when 1 unit of Bitcoin moves up by $1 - a trader trading 1 lot of Bitcoin will make a profit of $1, this is because 1 contract of Bitcoin represents 1 unit of Bitcoin.
For this Bitcoin trading account where a trader wants to open standard lots and standard contracts when trading Bitcoin a trader will require to have capital of one fifth the current Bitcoin price - this is because a trader can borrow up to 5 times their deposit using leverage of 5:1 provided by their Bitcoin broker.
Therefore, if the current price of Bitcoin is $5500.00 then a trader only requires $1100 in their account to open 1 Bitcoin contract. If a trader has $11,000 as their deposit in their trading account they can open up to 10 Bitcoin Contracts - This is because with leverage of 5:1 traders can borrow up to 5 times their trading account balance - therefore $11,000 multiplied by 5 is equal to $55,000 - the amount of capital that a trader will be controlling after using 5:1 leverage, $55,000 capital can then be used to buy 10 Bitcoin contracts (10x$5500=$55,000).
Micro Bitcoin Account
The micro lot for Bitcoin is made up of 0.01 unit of Bitcoin. Bitcoin is traded in lots known as contracts. The micro lot for Bitcoin is made up of 0.01 units of Bitcoin - one hundredth of 1 Bitcoin. Because Bitcoin is measured in 1 unit of Bitcoin, then these 0.01 unit of 1 Bitcoin is equal to $0.01 or 1 cents. These 0.01 units of Bitcoin is what makes one micro Bitcoin contract.
Therefore, when 1 unit of Bitcoin moves up by $1 - a trader trading 1 micro lot of Bitcoin will make a profit of $0.01 - this is because 1 micro contract of Bitcoin represents 0.01 unit of Bitcoin.
For this Bitcoin trading account where a trader wants to open micro lots when trading Bitcoin - a trader will require to have capital of at least $11.
Selecting a Bitcoin Account
A trader will have to decide which type of Bitcoin trading account is best for them based on the amount of capital that they want to invest & begin trading with.
For traders with $50,000 capital a Standard Bitcoin trading account is the best account to open and for traders with $1,000 to $5,000 account capital Micro Bitcoin trading account is the best account type to open.
Practice Demo Bitcoin Accounts
One of the methods that a trader can use to determine which account type is best for them is by opening a Bitcoin practice trading account that will help them to gain more knowledge about how Bitcoin trading works.
When opening the Bitcoin demo account, a trader can then select the amount of capital that they want to practice with, for example a trader can select the demo account balance of $10,000 or practice account balance of $50,000.
This way a trader can practice trading the Bitcoin market using the account balance that they plan to open a Bitcoin trading account with. With this account a trader can also practice how to trade with standard contracts or micro contracts depending on which contracts they will be trading with once they open their real Bitcoin trading account.
Demo practice account is a great way to get started and learn the specifics of the Bitcoin trading market. It gives beginner traders a chance to learn and practice Bitcoin trading for free with no risk of losing money. Demo accounts practice trading is a great way for a trader to learn and get used to the Bitcoin markets, execution methods of their Bitcoin broker and at the same time test various trading strategies that they will be using when trading Bitcoins.
