Why Should You Consider Trading Bitcoin?
If one has keen interest in trading, then they should also consider cryptocurrency trading like Bitcoin.
Considering everything, that is happening around you now, it may seem the best thing to do. Bitcoin’s popularity has exploded several folds in the past few years among traders and investors. Faster transaction times, low transaction fees, privacy, and anonymity building blocks of Bitcoin trading.
But, before you start trading, there are some key things to keep in mind.
5 Best Bitcoin Trading Tips And Strategies 2020 Explained
Knowing And Analyzing The Bitcoin Market Trends:
To start with, you need to have proficiency in technical analysis. Unlike other traditional financial assets, Bitcoins are not regulated or issued by governments; as such, there is no centralized bank controlling or regulating Bitcoins. Bitcoin prices are very speculative and do not agree with traditional financial theories at all.
So, one must know the basics of technical evaluation to enter the crypto trading market confidently. Since relevant market basics do not control Bitcoin prices, you have to keep analyzing trade price charts and graphs, and apply indicators.
Plan A Long Term Goal:
You have to realize that Bitcoin trading is not like running a race; it is more in the pace of a marathon. It is important for you to take up a pace that you can sustain; else, you will burn out. So, you need a plan for the long term, instead of spending every waking hour trading Bitcoins. It is not humanly possible to trade 24×7; unless you choose to invest in a reliable crypto trading bot.
If you consider manual trading round-the-clock you will only end up making poor trade-related decisions out of fatigue.
Stay Updated Of The Market Trends:
When you wish to trade Bitcoins, you have to be aware of all that is happening around you. So, updating yourself with crypto world news is a must. While there are no inventory reports and scheduled GDP releases, there is possibilities of unprecedented events and breaking news to shake up prices. So, you should ideally enjoy access to any live news feed to stay on top of Bitcoin related news.
Knowing The Risks Factors:
To trade Bitcoins, you must know why stop-loss orders are to be implemented. While volatility of Bitcoins draws investors to this crypto asset and the values are found to oscillate between 5%-10% on a daily basis. It does not mean the risks are any less than regular stocks and bonds. It appeals to people who are not afraid of taking risks or gambling. While the dramatic price swings can mean huge profits, they can also mean hug losses.
So, a stop-loss order is imperative because it will help you come out with profits before the trade goes out and you lose everything you wagered.
Correct Management Of Leverages:
Bitcoin trading requires the use of prudent leverage. While leverage may increase profits it can also amplify risks. When there is excess leverage money management becomes reckless. If there is too less leverage, it will hamper your trade performance as premium trades will not able to get you the returns expected.
So, managing leverage wisely is an art that traders have to master to be successful in Bitcoin trading.