In 2017, Bitcoin has exploded in value and made tremendous waves in the financial markets. And it’s still doing so at present, providing opportunities for investors and market participants to earn something out of the market. Many of them have begun using Bitcoin as a trading instrument, and of course Bitcoin trading tips are necessary.
In this article, we will talk about the most important and useful tips that one should know in order to succeed in trading Bitcoin. If you’re one of those who want to use Bitcoin as a trading vehicle to success, you should read this!
Because of its nature and circumstances that surround it, Bitcoin is sort of an outlier when compared to other assets like currencies or stocks. There’s no central regulator body that governs or influences its valuation. News events can have unpredictable, and sometimes drastic, impacts. Sometimes, other assets exhibit some sporadic apparent correlations.
The fact is, Bitcoin Exchange Rate models are largely speculative, ditching a huge bunch of conventional financial theory.
Understanding the basics of technical analysis is imperative before entering the Bitcoin trading markets. In a lot of ways, price itself gives the only reliable clues pointing to Bitcoin’s future value. Since it lacks the relevant market fundamentals, traders really don’t have viable options other than analyzing pricing charts, applying indicators, and reading price action.
Tip 2: Adopt a Good Pace
Remember this cliché dichtum, trading is a marathon, not a sprint. One of the most vital tasks that you have to undergo as Bitcoin market participant is having a schedule that can be sustained over the longer term.
If you put extremely long hours on a daily basis, it could lead you to burnout and subpar performance. The better idea is to find a more manageable schedule by outlining the optimal times to trade and focus on those periods exclusively.
Tip 3: Use Stop Losses
There’s consistent volatility in the Bitcoin market, and this is very much attractive to active traders and investors. The valuations regularly fluctuate between 5 percent and 10 percent daily, and this creates chances for traders who have huge appetite for risks.
Whether you’re using cash, CFDs (contract for differences) or Bitcoin futures markets, you must use stop loss orders. The wild swings in the digital currency’s pricing are definitely good for profit, but there’s also the tremendous chance of disaster always looming over your head.
You should use a stop loss order somewhere in the market if you want to protect your open positions.
Tip 4: Use Leverage Carefully
Although it has been said a lot of times before by a lot of many other educators, leverage is truly a double-edged sword.
When you use too much leverage, you are also promoting reckless money management. And this can lead to catastrophe for your account if not done well. Meanwhile, too little leverage can stunt performance since premium trades may not perform up to their real capabilities.
Ultimately, you have to learn to use leverage very prudently and carefully as a responsible Bitcoin trader.