When entering the crypto world, the first thing to learn is how to securely and steadily buy your first Bitcoin. This step seems simple, but it hides many details. A misstep could not only mean you overpay but also put your assets at risk. Don’t worry, follow these steps to easily complete your first purchase.
An exchange is the platform where you buy and sell cryptocurrencies, much like a “stockbroker for crypto.” For investors in Mainland China, Taiwan, or Malaysia, it is crucial to choose an exchange that supports local fiat currency deposits (like CNY, TWD, MYR), has a user-friendly interface, and a good reputation.
Considerations for Beginners Choosing an Exchange:
There are many options on the market, such as Binance, the world’s leading exchange by trading volume, or OKX, which supports CNY deposits and withdrawals. It is recommended for beginners to start with large, reputable exchanges with many users.
After selecting an exchange, the process is similar to opening a brokerage account:
Once your funds are available, you can start trading! The two most common ways to place an order are:
Beginner’s Tip: If you’re not in a hurry to buy immediately, try using a “limit order.” Set an ideal price slightly lower than the market price and wait patiently for the opportunity.
“Not your keys, not your coins.” Keeping all your assets on an exchange long-term is equivalent to entrusting custody to a third party. for ultimate security, you need to understand the difference between wallets:
For long-term holders (“hodlers”), it is strongly recommended to transfer the majority of your assets to a cold wallet, keeping only a small amount of funds on the exchange for frequent trading.
If buying crypto is the entry-level, then understanding candlestick charts is the key to transforming from a “newbie” to a “trader.” Candlesticks, also known as K-lines, are more than just red and green lines; they are a record of the battle between bulls and bears in the market. Learn to interpret them, and you will understand the language of the market.
Each candlestick contains four key price points, like a condensed report of a day’s or a period’s market activity:
Open | High | Low | Close
The longer the shadow, the more intense the battle between bulls and bears, and the greater the price volatility.
The shape of a single candlestick can reveal market sentiment. Here are a few common and important signals:
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MA (Moving Average) is a smooth curve created by averaging the closing prices over a specific period. It is the simplest and most direct tool for identifying trends.
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The bar chart below the candlestick chart is the volume, which is key to verifying the authenticity of price action. “Price-volume correspondence” is a core principle of technical analysis.
Once you are familiar with spot trading and can read candlestick charts, you might become interested in “contracts” or “futures.” These are more advanced financial derivatives that can allow you to profit whether the market goes up or down, but they also come with extremely high risks.
Simply put, a Bitcoin future or contract is an agreement to “buy or sell Bitcoin at a specific price at a certain point in the future.” You are not trading Bitcoin itself, but a contract. Its main feature is “leverage.”
Leverage is like a double-edged sword. Suppose you use 10x leverage; this means with a $100 margin, you can control a position worth $1000. If the market goes up by 10%, your profit is $1000 * 10% = $100, which is a 100% return on your capital!
However, if the market drops by 10%, your loss is also $100, and your entire margin is wiped out. This is how leverage amplifies both profits and losses.
In the cryptocurrency market, the most mainstream type of contract is the “perpetual contract.”
| Feature | Traditional Futures Contract | Perpetual Contract |
|---|---|---|
| Expiration Date | Yes (e.g., monthly, quarterly), requires settlement or closing at expiration | No expiration date, can be held indefinitely as long as the margin is sufficient |
| Price Anchoring Mechanism | Settlement mechanism causes its price to converge with the spot price | Funding Rate, settled every few hours to balance long and short positions, keeping the contract price close to the spot price |
Because perpetual contracts have no expiration date, they offer more flexibility and have become the mainstream for derivatives trading in the crypto space.
Liquidation, or forced closing, is the most critical risk to be aware of in contract trading. When the market price moves against your position to the point where your losses are about to wipe out your margin, the exchange’s system will forcibly sell your position to prevent you from incurring debt.
The higher your leverage, the smaller the price fluctuation you can withstand, and the closer you are to liquidation. For example, with 100x leverage, a 1% adverse market move will wipe out your position. Therefore, beginners should never attempt high leverage!
⚠️ Risk Warning:
Contract trading is a high-risk activity, and over 90% of participants end up losing money. Do not invest significant capital without adequate knowledge, strategy, and risk management skills. It is recommended to practice with a demo account first and always set a stop-loss.
The appeal of contract trading lies in the opportunity for two-way trading:
This allows investors to find profit opportunities even in a bear market, but likewise, losses from being on the wrong side of the trade are also amplified.
This article has guided you from the basics of how to buy Bitcoin, through the steps of account opening, placing orders, and asset custody; then delved into the world of Bitcoin candlestick charts, teaching you how to interpret market sentiment and trends from charts; finally, we have demystified Bitcoin futures and contracts, helping you understand the high risks behind their high returns. This complete Bitcoin investment tutorial aims to build a solid knowledge framework for you.
Please remember that the cryptocurrency market is extremely volatile. Before investing, always do your own research (DYOR), start with a small amount of capital, and never invest money you cannot afford to lose. Continuous learning and proper risk management are the only paths to successful investing.
There is absolutely no minimum amount! Modern exchanges support fractional purchases, so you can buy as little as 0.001 Bitcoin or even less. It’s advisable for beginners to start with an amount of disposable income that won’t affect their daily life, such as a few hundred USD, to first experience the process and market volatility.
The main risks include: 1. Market risk from severe price volatility; 2. Platform risk from exchanges being hacked or going bankrupt; 3. Policy risk from changing government regulations in various countries; 4. Operational risk from losing your own account passwords or private keys. Understanding and preparing for these risks is a mandatory part of investing.
Absolutely not! Bitcoin contracts involve high leverage and are extremely risky. Beginners who do not understand their mechanics and lack a stable trading strategy can easily lose their entire capital quickly. It is recommended to have at least six months of spot trading experience and a full understanding of concepts like liquidation and stop-loss before attempting it with a very small amount of funds.
Besides Bitcoin (BTC), Ethereum (ETH), the second-largest cryptocurrency by market cap, is also a core holding for most investors. Additionally, there are many other coins in different application areas, such as exchange tokens (BNB), tokens related to Decentralized Finance (DeFi), etc. However, for beginners, it is recommended to focus on researching BTC and ETH first, as they have the strongest market consensus.
