Tips and Tricks for a Successful Bitcoin Trading

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2015

Risk mitigation is an art you need to learn as an investor, especially with cryptocurrencies like Bitcoin and ETH. There are certain tips and tricks involved for successful Bitcoin Trading. Successful Bitcoin trading refers to purchasing it at its lowest value while selling it with a relatively higher value.

The volatility of Bitcoin makes it a challenge for successful trading and needs close observation and monitoring. As a Bitcoin trader, you are expected to learn to read graphs, access chart reading tools, and stay informed. Here are some of the top tips and tricks for successful Bitcoin Trading.

1) Familiarize yourself

It is essential to familiarize yourself with the nitty-gritty of Bitcoin. Losses can be expected at the start; however, learning from those will be an asset. Therefore, it is recommended to start small and get insights into the functionality of trading platforms.

This will allow you to gain the confidence to invest a higher amount. However, investing 5% of your current portfolio in BTC is recommended. There is indeed a high risk involved with Bitcoin trading; however, you can mitigate this with relatively smaller investments.

 2) Opt for a Secure Wallet

Your digital assets are secure only if you have a secure crypto wallet. Novice traders should choose reputable brokers for trading, cryptocurrency prices, and cryptocurrency exchanges. Choosing a reputable broker allows ease of trading and provides a secure gateway. A secure wallet is also crucial for the safety of your crypto investments.

 3) Choose a Trading Strategy

As a Bitcoin investor, you need to be aware of the trading strategies involved in BTC trading. Choosing a Trading Strategy depends on your goals and the time you are willing to commit. A good trading strategy would help you get good returns on your investment. While a bad one would be futile for your hard earned money.

Here Are Some Bitcoin Trading Strategies;

Day Traders

Day Traders use a 24-hour rule to enter the market while taking advantage of daily market fluctuations to earn a profit.

Scalpers

Scalpers make multiple trades each day and take advantage of small profit fluctuations.

Swing Trading

Swing Trading refers to trading with detailed technical analysis and capturing the projected trends in the BTC value.

Passive Trader

This refers to holding Bitcoin for a longer term which helps mitigate fluctuations.

4) Set Strict Targets

Bitcoin is volatile and demands you to make logical decisions and be bold in your investment strategies. Therefore, Bitcoin investors are successful as they set Stop-Loss levels. This helps to set in advance the losses you can bear after carefully observing your portfolio.

Before choosing a holding position, determining the profits you can make from a trade or the losses you can afford is important.

Hence, being strict with your profits and loss in Bitcoin trading will help you stay realistic and avoid heavy losses.

5) Buy and Hold Strategy

Bitcoin is known for its short-term volatility. One can expect 5%-10% fluctuations in Bitcoin values. The easiest way to bypass short-term volatility is by using the Buy and Hold strategy. This refers to long-term holdings. You can hold your position for weeks, months, or years and wait for the right moment to sell it with huge profits.

However, while investing long-term is a good strategy, you need also to consider Stop-Loss levels and set risk management strategies in place.

 6) Invest With a Sound Mind 

Bitcoin indeed has some risk management strategies in place; however, emotional factors can also affect your decision-making. For instance, when you see a growing trend of BTC value, you fear that you’ll be left out and invest only to see the value fall down.

This is referred to as FOMO or fear of missing out. Hence, while looking at spikes, don’t invest because of FOMO; however, invest after careful research and technical analysis.

7) Beware of Scammers

Bitcoin is decentralized finance or DeFi. Since there is no central exchange or lack of regulation, it is a breeding ground for scammers. While Bitcoin shows a promising future, you need to also beware of scammers who lure you into phishing scams and Ponzi schemes.

Remember that you need to make investment decisions sound and logical instead of relying on an impulse and the fear of being left out.

Outgoing Thoughts

Therefore, it is important to make informed decisions while investing in Bitcoin. Choose secure cryptocurrency exchange platforms like OKX and look for secure wallets for holding your digital assets. Lastly, beware of scammers and don’t make emotional decisions while investing.