Top 5 Tips For Bitcoin Trading

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It’s no secret that Bitcoin is the leading cryptocurrency globally. The explosion of its popularity has led to a global buzz among traders, investors, and consumers. Low fees, transaction speed, and value increases are factors that have attracted many people to this cryptocurrency. Bitcoin is now the primary exchange method for some people.

Platforms like online Trading robot have also popularized this cryptocurrency by allowing users to trade it. Many traders capitalized on the Bitcoin trading boom and have already made millions from their investments. But crypto trading happens in a turbulent environment. Prices are highly volatile. As such, dedication and discipline are crucial when trading Bitcoin. Here are the top Bitcoin trading tips to help you succeed in your venture.

1. Learn to Perform Technical Analysis

Bitcoin and other cryptocurrencies are not governed or controlled by any authority. However, the effects of news and global events on Bitcoin can be unpredictable. What’s more, Bitcoin has sporadic correlations with most financial instruments. The pricing model for Bitcoin is mostly speculative. That means it ignores the typical monetary theory.

To excel in Bitcoin trading, you must understand the technical analysis basis. Price is the only source of clues about the future value of Bitcoin. Since there are no relevant crypto market fundamentals, the impetus is on price chart analysis, indicators application, and price action reading.

2. Embrace a Sustainable Pace

Trading is like a marathon. Therefore, you need to establish a sustainable schedule. Be prepared to spend hours every day analyzing the market and trading. Since you may not trade effectively 24/7, adopt an easy-to-manage plan. You can do this by outlining your optimal trading times. Once you’ve done that, focus on them exclusively.

3. Follow the News

One of the things that make Bitcoin unique is that typical news doesn’t have predictable effects on its market. Bitcoin doesn’t have EIA or WASDE inventory reports and GDP releases to boost participation or skew pricing. But some unexpected news can significantly influence Bitcoin price.

For instance, Bitcoin value dropped by 9.3% when China announced a ban on crypto exchanges in 2-17. When Russia announced a ban on this crypto exchange in the same year, Bitcoin value dropped by 12.5%. Other factors that have influenced Bitcoin value in the past include its features launch announcement by CME Group, which increased its value by 3.8%, and virtual currency system hacking.

Therefore, be updated on the news because this can affect Bitcoin price and your venture’s profitability.

4. Use Stop Losses

The Bitcoin market is always volatile, with valuation fluctuating from 5% to 10% every day. And this is an attractive characteristic for an active Bitcoin investor or trader. And this creates opportunities for active traders that don’t mind taking a risk.

Whether you’re engaged in Bitcoin futures, cash, or CFD markets, implementing stop losses should be a must when trading this cryptocurrency. That’s because the wide price swings can boost profit, though a catastrophe can also occur. It would help if you implemented a stop loss at some point in the market. And the exact moment at which you do this varies.

5. Use Leverage Prudently

Leverage is a double-edged sword because it can boost your gains or magnify losses. When in excess, this influence can promote reckless fund management. It can also make you blow out the trading account. On the other hand, little leverage can hinder the performance since premium trades might fail to perform to their full capabilities. Therefore, learn to manage this force because this balancing act is a must for a Bitcoin trader that wants to succeed. You can use Bitcoin futures to manage leverage since they emphasize proper leveraging more.

Final Thoughts

Bitcoin will most likely continue to gain popularity and attract more traders and investors. Follow these tips if you want to start trading or investing in Bitcoin to increase your chances of becoming a successful crypto trader.