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How To Trade Bitcoin Cash - Step-by-Step Guide

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Author: Eleonora Di Felice Updated: 31 January, 2022

Bitcoin Cash is one of the most well-known cryptocurrencies since it was created as a hard fork of Bitcoin

Similar to when certain team members at Ethereum decided to branch off and create Ethereum Classic Bitcoin Cash (BCH) was born as the result of an internal dispute. 

Infighting and politics aside, what this did is give place more trading options at the fingertips of eager traders.

And the principle is much the same. Buy low, sell high, try to predict the turns in price and if you don't want to call tops and bottoms think about dollar cost averaging. 

What follows is a step-by-step guide about how to trade Bitcoin Cash in 2022.

Bitcoin Cash Trading Summary

Buying and selling Bitcoin Cash is easy. However, in order to be a successful trader, there is a lot more than just purchasing a certain amount and then selling it later on. You need to know what it is you are doing, which means having a plan or a strategy.

You also need to use proper analysis tools that will help you make accurate forecasts and predict the price movement. With the price of crypto being very volatile, this is crucial in order to recognise good opportunities when they come your way, which can even help you make a regular income once you get skilled and comfortable enough with trading.

Later on, there are more complex trading instruments, such as crypto derivatives, like futures, options, and CFDs, that allow you to bet on the price movement, rather than buy and sell coins.

In other words, trading offers great potential, but it comes at a risk, and that is why you need to learn all you can about it before putting your money on the line.

Start Trading in 3 easy steps

1. Choose a trading strategy

As mentioned, having a plan is essential for every trader. You need to know what it is you are doing, and sometimes maybe even suffer losses for a greater cause. Trading is like a game of chess, and that means that you won’t always be successful. But, as long as the final result is in your favour, that is all that matters.

2. Set Up a Trading Account

Naturally, before you can start trading, you need to create a trading account. You can do this on an exchange or with a broker. The process is simple and short, and all you need to do is fill out short registration forms. Also, after the registration, you will also need to verify your identity before you can start trading.

3. Start Trading

Lastly, all you need to do is deposit some money, and start buying Bitcoin Cash. We mentioned already that the process of purchasing or selling coins is very easy on its own. You can simply click on the buy or sell button, enter the amount that you want to buy or sell, and fill out other details as required. After that, click on the ‘place order’ or ‘execute trade’ or a similar button, and you will be done. The complex part is coming up with a plan of purchases and sales that will result in maximum profit and minimal losses for you.

Bitcoin Cash Trading Explained

Trading is essentially buying and selling, that much is true. However, this is nowhere near enough information if you wish to trade cryptocurrency. In order to be a successful trader in the industry filled with high-risk speculative assets, you need to educate yourself, and that also means understanding the terminology, such as trading position, price action, and alike. 

Are you going long or short? Do you plan to trade with leverage? These are all the things that you must learn before entering the industry. Not to mention the fact that you don’t have to only trade cryptocurrencies. You can also go for crypto derivatives, such as contracts for differences, options, or futures.

The terminology is just that, and most of these things are rather simple once you understand them. For example, going long simply means that you are buying, or that you are betting that the price will go up. Going short means selling, or betting that the price will drop. Trading with leverage, on the other hand, is a bit more complex matter that involves borrowing the money from the exchange or your broker in order to be able to buy more crypto than what you can with a small amount of money that you are expected to contribute. 

Then, there is the matter of crypto derivatives themselves—these are contracts that can be bought or sold, and that use cryptos as their underlying assets. So, buying them means that you will not actually buy any coins. The advantage here is that you don’t have to manage coins yourself, or keep them from being stolen. Essentially, you are just betting on which way their price will go. And yes, you can bet that the price will drop and still earn money, which is a major advantage over actually buying cryptos themselves, where any price drop means that you are losing funds if you sell after the drop, and before the price gets the chance to recover.

Trade Bitcoin Cash: Establish a Proper Plan

We said this multiple times already, and we will say it again because it is that important—you need to have a plan. And not just any plan but a proper plan. That means focusing on three different things i.e. fundamental analysis, technical analysis and an appropriate strategy.

Understand What Moves the Price of Bitcoin Cash

Bitcoin Cash is not tied to any real-world asset that would give it value or keep its price stable. In fact, most cryptocurrencies are like that, with the exception of stablecoins. Instead, the coin is valuable as much as people believe it to be valuable. But, there are still things that can impact its price, and understanding what those things are, how they impact it, and why, can be crucial for knowing what to expect and how to behave in the crypto market.

This is known as fundamental analysis, and it revolves around anything that may impact traders’ and investors’ opinions of the coin. So, if there is a large demand, the coin’s price could go up. If there is some positive development, like a new upgrade that is improving the coin’s network stability, the price is likely to grow. It could even grow due to some positive news, or drop if the news is negative. The price can sometimes skyrocket if the coin is mentioned by an influential individual or a celebrity.

Information about increased adoption also increases the price, as it is assumed that more people will want the coin, which will boost its price due to demand, and it is better to buy early on. Positive predictions by reliable sources are also known to push the price up, in a sort of a self-fulfilling prophecy kind of way.

Technical Analysis: Read the Charts

Then, there is technical analysis, which mostly comes down to reading the charts. Charts show how the price moved, and for newcomers, that is it. However, if you know how to read them properly, you can figure out tons of important data, indicators of how the price might move further on, and many other important details.

For example, price movement tends to make different patterns, and after a while, investors and traders start recognising them. If you can recognise that the coin’s price performance is making one of these patterns early on, then you will know what to expect, as you know how the pattern ends. 

Next, charts also show things like moving averages, which can inform traders about the current price trend, and there are always trading volumes to consider, to know if the coin is seeing a lot of activity or if traders and investors are keeping it and lying in wait for the next opportunity.

Keep in mind, however, that chart data and price performances do not guarantee success. Experts can mostly tell when this is the case, and when the information provided by charts is misleading so it might be beneficial to make a habit of checking experts’ opinion on the coin’s performance before investing. Even then, some news might emerge and completely change the situation, which is why everyone is saying that the crypto industry is risky, and why you must always be cautious when trading cryptocurrencies.

Common strategies to Trade Bitcoin Cash

News Trading

The third thing that we mentioned is strategy, and news trading is one of the very popular ones. The strategy is pretty much what the name suggests. You follow the news while keeping an eye on the price action. Once a piece of impactful news emerges, you can see how it affects the price, and how you stand to benefit from such developments. Then, you wait for the next one, and when it happens again, you can sell or buy Bitcoin Cash, depending on how its price moves. News trading will require constant vigilance over the market, and quick reactions.

Day Trading

Next, we have Day Trading, which is a common trading strategy during the more volatile times. Basically, this strategy has people buying coins and selling them within the same day, in order to use the price changes that can happen in a few hours. When it comes to larger coins like Bitcoin, those changes can sometimes include thousands of dollars. For Bitcoin Cash, however, the shifts are much smaller, but that doesn’t make it less volatile. It just works on a smaller scale.


Scalping is a form of day trading, but just as day traders operate in a much smaller period of time than other traders, so do scalpers operate in a much shorter period than most day traders. In day trading, you measure your investment time in hours, meaning that it can be quite a few hours between buying and selling, and vice versa. When it comes to scalping, you can buy and then sell in a matter of minutes. Scalpers are making their transactions in much, much smaller periods, making sure to squeeze out profits from even the smallest fluctuations. This method will not give you a lot of time after entering a position, as you will be closing it very quickly. 

Choose a Platform that Fits your Trading Strategy

Cryptocurrency trading is being performed on crypto trading platforms or crypto brokerages, as mentioned before. When it comes to brokerages, these are services that operate similarly as they do in traditional finance—they grant you access to the market and they can be used to trade for you. They are mostly regulated, often by several regulatory bodies, so that they could operate on an international level.

Unregulated brokers are either shady or full-on scams that you should try to avoid, as there is a chance that they could disappear with your money. Another advantage of brokers is that you can use them to access crypto derivatives, such as the mentioned CFDs, options and futures. So if that is what you wish to trade, then brokers might be a good option for someone who doesn’t want to have to do all the work.

Alternatively, you can go for crypto exchanges, where you can typically only buy and sell regular coins. These are the best place for newcomers to the industry to start, as buying and selling crypto is the simplest form of trading, and there is not much there that will confuse you or give you a hard time. You can also go for derivatives exchanges, where you can also access the same products as you can via brokers, only this time you will have more direct access.

Obviously, brokers are safer since they are regulated, but exchanges are cheaper because you don’t have to pay for brokers’ services. 

Set Up Your Trading Account

Hopefully, you have managed to decide what kind of platform you wish to use for your trades. If so, the next step is to set up your trading account. This is a fairly quick and easy process that only requires you to register, and then verify your identity by uploading a photo of your ID, passport, or some other official document. The platform will notify you of what you need to deliver, so don’t worry about that. After you set up an account, all you need to do next is to fund it and start trading.

Open your First Bitcoin Cash Trade

Now, one thing to keep in mind is that your first trade will differ depending on the platform that you choose. That might mean that the tabs and buttons will have different names, or that things will be located in different areas of your dashboard. However, these will all be mostly minor differences, as trading platforms are typically all alike.

So, if you can find your way around one, you can probably do it with most, if not all of them, although some may be a bit more complicated than others. On most platforms, you can open a trade by clicking on the Buy/Sell button. But, before you actually open your trade, there are things to consider and set up, such as:

Order type

The first thing that you will need to decide on is your order type. There are many different ones, such as Market Order, All or None order, Limit Order, Stop Loss and Trailing Stop Loss order, Immediate or Cancel Order, and alike. 

You will have to choose one or more depending on your personal preference. Some experts like using the limit order as it ensures a better Buy/Sell price than, let’s say, the Market order which will execute a buy/sell at the current prevailing market price. 

Buy or Sell?

We mentioned this before, but trading is mostly just buying and selling at the right time. We also mentioned that different commands and functions may have different names on different platforms. So, you may find buttons that say ‘buy’ and ‘sell’ on a regular crypto exchange, only to find things like bids and asks on a derivatives exchange. Bids and asks are just different names for buy and sell, following the traditions of the pre-crypto financial industry.

There are also order books, which are lists of buy and sell orders on brokerages and exchange platforms that are updated in real-time. That way, you can immediately see if the order gets cancelled or filled up. Lastly, you should also take note of spreads, which are the difference between the lowest asks and the highest spread. If the difference is small, that means that the liquidity is likely to be good. If the difference is big, then the opposite is true.


New crypto traders are often confused regarding how much they should invest or use for trading. The amount that you need to use depends on the platform you are using. In other words, most exchanges have a minimum amount below which you simply cannot trade. Now, the amount that you can use depends on you. 

If you are a first-time trader, we would recommend not using too much for your trades. Keep it small and stick to the minimum. That is a safer thing to do before you can learn the ins and outs of trading. Otherwise, you are risking your money with your chances of profiting being fairly slim so early on.

Leverage on Bitcoin Cash

Trading with leverage has been a part of the trading industry for ages, and in crypto, it means the same as anywhere else. It basically allows you to buy several times the value of an asset than the value of the money that you are willing to use. The money to make up the difference comes from the exchange or brokerage that you are using. Trading with leverage is great for experts who enjoy taking a bit of risk, but it is generally not advised for newcomers. While it does offer great rewards in return, it also comes with a much greater risk.

Stop-Loss and Trailing Stop-Loss

Crypto prices’ volatility is strong, and it is not uncommon for the coin to just start dropping suddenly. This is why traders have invented some measures of protection in the form of risk management tools. Stop-loss is one of them. You may remember it from a few moments ago, where we mentioned it as a type of order. Yes, this is a type of order that allows you to select a certain price level below the price that the asset has at the moment when you entered the market. If the coin’s price ever drops to this level, your position will be closed automatically, to prevent further losses.

The only issue is selecting the level properly, as you need to account for regular price fluctuations that might trigger it accidentally.

Stop-loss is also not very useful if you wish to earn, as the price could skyrocket up from the level you selected, and then come crashing down, causing you to lose an opportunity to earn. This is why trailing stop-loss was invented, where the limit you select tends to follow the price as it grows, and settle in below it, thus allowing you to earn even if the safety measure gets triggered.

Take profit

There are also risk management tools that go above the current market price. For example, Take profit, which is another order type. This one works similarly to Stop-Loss, only you select a price level above the current market price. That way, if the price surges and reaches that level, your order will be automatically closed, securing your funds.

Finishing touches

Lastly, there are a few other things to set up, such as commissions and triggers. Commissions are basically fees, as you need to know how much will it cost to use a platform or a brokerage. Each has its own deal and while some charge a deposit fee but not the trading fee, others do things in reverse. Some do not charge either of the two, but they won’t let you withdraw money without paying. Each exchange is different, so look up the commission costs and include them in your calculations when selecting a platform. You should also decide on triggers when entering a position, which are market signals that will tell you when to act and when to stay reserved. It is important to respect them and not trade emotionally. 

Open Your Bitcoin Cash Trade

Assuming that you have set up your order and that you have taken all these little details into account, you might just be ready to execute your trade. Before you do, make sure that everything is set, and that you set it all properly. A lot of traders know how to set up different parameters, and then make an error in a hurry and lose money because they did not pay attention. Don’t trade in a hurry, and don’t ever let your emotions control you. Trading requires logic and a cool, calculated approach. 

Closing Orders

The last thing to teach you is that you can close orders in two ways, either manually or automatically. Manually—well, the name says it all. You find the close order button, or however, your platform decided to name it, and click it to exit your position. Automatic order closure can only be done if you set a stop-loss, trading stop-loss, or take profit order, and the price triggers it.

Final Thoughts: Ready to Trade Bitcoin Cash?

That’s all there is to trading Bitcoin Cash, although there are a lot of details about all of these aspects that you need to learn and know by heart if you wish to trade and not lose. The fact is that most people who enter trading tend to lose all of their money because they don’t know what they are doing. 

The risks are there, but so are the benefits, as we have seen throughout this guide. Just stick to the rules, have a plan, and educate yourself on different indicators. 

Alternative Cryptocurrencies

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Frequently Asked Questions

  1. No, Bitcoin Cash is generally not seen as a competition to Bitcoin. Bitcoin Cash is a fork of Bitcoin. But, BCH aims to become the dominant coin for transactions, while most in the community see BTC as the future store of value.
  2. 21 million units, just like Bitcoin. The two are very similar to one another, and a lot of such traits are shared between them.
  3. That is up to each trader and investor to decide. The fact that it has ‘Bitcoin’ in its name has little to do with it, as there are many other BTC forks that have called themselves ‘Bitcoin’ but that did not help them. In the end, the market will judge each coin, and only the good ones survive, let alone remain on top.
  4. Bitcoin Cash was made because there was a disagreement in the Bitcoin community. One group of developers wanted to change Bitcoin in one way, while the other wanted something different. Due to their inability to come to a mutual understanding, the Bitcoin chain forked, the community split, and the two groups went off their separate ways.
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