Tricks and Tips for Trading Bitcoin

Tricks and tips for trading bitcoin

The internet is brimming with tips and investment advice for trading your digital currencies, but the truth is, no one in the world can give you a perfect strategy. The crypto market is far too dynamic. Upon reading these lines, you will have a better comprehension of crypto trading. Also, you will know how to improve your chances of making a profitable bitcoin investment.

Learn what influence the price of bitcoin

As a trader, you always need to understand what moves the market you are trading on. Regarding bitcoin’s price, supply and demand are the most influential factors besides breaking news, integration in to payment systems, regulation changes for crypto trading. Always keep updated on these since they are your guide through the crypto market.

Monitor technical indicators

Crypto exchange and trading websites are full of excellent technical tools and indicators. You should make the most out of them in order to forecast the movements in the crypto market.

Start with a small investment

One of the most critical investment laws is never investing more than what you can afford to lose. Since this bitcoin is very volatile, large price fluctuations can happen within days and sometimes hours or minutes.

As a beginner, you should invest a tiny percentage of your money when you are starting bitcoin trading. That way, you will familiarize yourself with the market.

Always use Stop Loss and Cut Position Orders

Stop loss and cut position orders are your best friends in trading. Before every trade, set up a stop-loss limit as well as cut poison to hedge yourself from the risks and to be able to leave the trade when the loss reaches the level you cannot tolerate.

Watch out for trading “spikes”

Many people can deposit a considerable amount of money just over the weekend, which will not be transferred to their accounts until Monday. If a big percentage of these people purchase a lot during the day, it may temporarily increase the value of bitcoin or any other cryptocurrencies dramatically. When this happens, don’t be afraid to miss out on shopping (FOMO) to avoid over-buying.

Diversify (spread your investment)

The saying “Don’t put all your eggs in one basket” has been proven as valid and wise. By diversifying your assets, you can reduce your risk as each cryptocurrency has different cycles.

While trading bitcoin, keep a keen eye on other investment options like gold, silver or the traditional stock market.

Another good idea is not to just spread your investment over different assets, but to smooth them out over time, which means not to buy or sell all at once, and to do it in smaller increments.

Don’t make rash decisions

Emotional trading is by far, one of the worst things you can do. The fear of missing out on buying can be a real killer. Patience is very beneficial unless you have a good reason (based on your research) to believe that it’s an excellent opportunity to buy or sell. It brings us directly to the next point.

Keep track of new blockchain project

When you enter the crypto market and start trading cryptocurrencies, you will stumble upon the so-called ICO projects. ICOs (or initial token offering) is a crowdfunding strategy where you buy your tokens to expect these coins to increase in value when the company delivers its product and comes up with a real use case for its tokens.

They can be an excellent investment, but it’s advisable never to invest money in tokens without doing the proper research. In most cases, you will buy promises.

Don’t lose your cool

In such a dynamic market, anyone can quickly make a mistake, even if they follow all the advice imaginable in the books. Unless you’ve invested too much (which is the first thing not to do), the possible losses shouldn’t have a dramatic impact on your life. You should take every profit or loss as a lesson for the future. Take it one step at a time. Keep calm and trade!

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