One of the first questions that people ask themselves when they come across Bitcoin for the first time is how to trade profitable in Bitcoin? As with anything, there are different strategies and tactics you can use. Below, I will provide a quick summary on what you should keep in mind if you want to achieve success trading bitcoins.
Get Basic Knowledge:
Following the first strategy is to acquire basic knowledge on Bitcoin Profit, how they work and what affects its price. Get to know the basics like supply and demand, trading volume etc. You can also check websites like Coindesk where you can continuously monitor news that happens around the Bitcoin world.
Keep Updated with Market:
The market is always changing and no one can predict what might happen tomorrow. Bitcoin is a 24/7 market and not like any other markets that close for the day or once a week. Keep yourself update with Bitcoins price and market cap, find out whether people talk about Bitcoin more than usual on social media etc. That’s will give you an idea of whether Bitcoin is gaining popularity or losing it.
Create Strategy: After getting familiarized with the basics and knowing how the market changes, create your own strategy to stay profitable. There are many different aspects you should take care of when creating your trading strategy, I have listed some below but feel free to add additional ones which are also very important.
Hold for Long Term
For the long term strategy; simply buy cheaply now and load up your BTC. You need to remain patient as this strategy works best after 10 years or more. There will be short-term ups and downs but over time it has been proven that Bitcoins’ value tends to go up exponentially instead of going down like stocks do during a market crash. If you’re a good trader, you can make profits regardless of which strategy you use. Be patient and always remember that “trading is difficult” but with the proper planning it can be very profitable.
Social Trading for Beginners
Recently, there has been an emergence of social trading networks. It’s where people share their trade knowledge with others in return for a commission based on their trades’ performance which is paid by the brokerage company they are using. If you sign up with a reputable brokerage company such as Plus500 or eToro , you will have access to hundreds of different traders with varying strategies who are competing against each other so it’s up to you to choose which ones have the best success rate. Also, don’t forget about this scenario: what happens if the market they are trading crashes halfway through their trades? Will you lose your money? What if one of them gets hacked? It’s very important that you do your own research before deciding to sign up with any of these social trading networks or even just trade on your own.
Short Term Trading (Scalping)
This is a short-term strategy where both technical analysis and fundamental analysis comes into play. The purpose here is to try and capture as much profit as possible within a very small timeframe, specifically minutes or hours. So what does this mean for someone who wants to trade profitable in Bitcoin using a short-term strategy? Let’s take a look:
- Technical Analysis
- Fundamental Analysis
Scalping requires very little time and effort so if you want to trade bitcoins but don’t have the time, scalping can be a good option for you. It’s all about capturing quick profits during an uptrend or downtrend with minimal losses. The biggest fear here is that you will capture a quick profit and then watch it disappear within minutes because of the volatility of the crypto market. On the other hand, let’s say you don’t want to risk too much money using this strategy; what do you do? You always need to make sure your stop loss is at a place where there isn’t any significant support/resistance levels nearby otherwise you might get stopped out before a trend even happens.
As you can see, there are many different aspects involved in trading Bitcoin so it’s very important that you do your own research before making any investments. This is not investment advice nor am I saying what’s the best way to trade Bitcoin, I just wanted to give you an idea of how it works after having traded for a while myself.