Due to its increasing popularity, Bitcoin has become a go-to investment option for many people across the world. Among the reasons for its popularity include low fees, transaction speed, high increases in value, and so on. Bitcoin is not just an investment option but a trusted currency for many.
Although a popular option, Bitcoin trading isn’t that straightforward. With the following tips, you should be able to navigate the highly volatile Altcoin trading market.
Carry Out Technical Analysis
It is not possible to get accurate information on Bitcoin while analyzing traditional market factors such as news events and actions of the central bank. Bitcoin trading has been known to defy tradition, even when it comes to regulation by the financial systems.
If you want to trade with your Bitcoin, you have to learn the basics of technical analysis. Given the speculative nature of price increases, you have to know how to analyse price charts, read price action, and apply market indicators.
Adopt A Trading Pace For Can Sustain
Bitcoin trading is analogous to a marathon. It isn’t a sprint. That’s why you must establish a sustainable schedule that will keep you in the market for a long time to come. You risk burnout if you choose to do daily long hours. If anything your performance in the market might not measure up to your expectations. Trade with your Bitcoin at a pace you can manage bearing in mind that it is more profitable to do it during the optimal periods.
Follow the News
As earlier observed, Bitcoin trading is hardly influenced by news happenings. It could be due to the lack of predictability when it comes to happenings in the market. However, you should always be on the watch for unexpected news that could have an impact on the Bitcoin price. Take examples such as when China and Russia banned Bitcoin trading. Before you trade with your Bitcoin, first ensure you are kept informed through a live news feed.
Use a Stop Losses Strategy
Bitcoin markets are, by their nature, highly volatile. This is the reason for its preference by investors. In any single day, the value of the cryptocurrency can move up or down by 5 to 10 percent. Traders, therefore, tend to prefer them because of the high risk involved.
Clearly, you need to use stop losses. The Bitcoin market is so volatile that you are likely to make catastrophic losses. Therefore, analyse when to implement a stop loss.
Bitcoin trading requires that you have some form of leverage to boost your gains. However, leverage can also lead to bigger losses. That’s the reason you must manage it in the best way possible. Some investment experts suggest that you adopt the 3 percent rule. What it means is that you can only use up to 3 percent of your trading account on every single trade. It is about aligning risk to reward in consideration of stop loss location and position sizing.
It is time you started trading in the Bitcoin market. The earlier you start, the more the gains you will make in the long-run.