In the recent few years, bitcoin trading has become a popular way to make money online faster. This type of trading involves the way, in which you speculate on different movements in the price of the respective cryptocurrency. This makes bitcoin one of the volatile cryptocurrencies. Hence, if you want to make the most from bitcoin trading, you have to know a few things, as we have discussed in our blog post.
Simple and Easy Steps to Bitcoin Trade
1. Aspects, which Affect the Price of Bitcoins
You have to understand the following factors, as they have a huge impact on the price of bitcoins.
- Supply of Bitcoin
The latest bitcoin supply is approximately 21 million and experts are expecting that it will exhaust after 20 years. A finite supply of bitcoin indicates that its price may increase with the rise in demand in upcoming years.
- Breaking News
Any breaking news related to the security, longevity, and value of bitcoin will have a negative influence on the overall market price of bitcoin.
The public profile of Bitcoin depends on its integration with the latest banking frameworks and payment systems. If the integration takes place successfully, the demand for bitcoin will increase and there will be a positive influence on the price of bitcoins.
2. Open and Monitor the Bitcoin Trade
If you want to open a bitcoin trade, you will buy if you find an increase in the ongoing price. On the other side, you should sell it in the case of finding a fall in the price. Once you open the trade, you have to monitor the entire market. This will make sure that it moves according to your anticipation.
3. Take Help from Bitcoin Code Website or App
If you are entirely new to bitcoin trading activities, you should take help from a reliable Bitcoin code website or app. This type of platform optimizes the complete trading process. Hence, you may avoid or reduce any risk related to losing your trading opportunities and saves your valuable time.
Why Bitcoin Traders should Refer Bitcoin Software/Website
Many individuals often hesitate to perform bitcoin trading activities. The reason is bitcoin and other cryptocurrencies trading is demanding and complicated. If you want to accomplish profitable trades, you have to understand cryptocurrencies and trading fundamentals well.
Simultaneously, you have to learn the behavior of the bitcoin trade market depending on various worldwide events. Excluding this, users have to dedicate many hours to monitor the data related to the trading market to identify profitable bitcoin trades. As many people already have other activities, it is difficult to sit in front of a computer screen or mobile phone for the entire day. Here comes the role of the Bitcoin code website and other similar types of trading apps/platforms.
These applications automate the complete trading process so that you may dedicate more hours while doing other activities. Only you have to dedicate your time to set your trading strategies and parameters. For this, you have to know how bitcoin trading works.
4. Select a Particular Bitcoin Trading Strategy and Style
- Day Trading
In the case of day trading bitcoin, you will open and close any position within only one trading day. This means you do not have any exposure to the bitcoin market overnight. In other words, you will avoid the charges related to overnight funding in your position. Day trading strategy works well for all, who want to get profit from its short-term price movements. The strategy allows you to earn the most from daily price volatility in bitcoin.
- Trend Trading
Trend trading implies acquiring a position, which matches the latest bitcoin trend. For instance, if the market has a bullish trend, a trader will go long and in the case of a bearish trend, the trader will go short. However, if the trend starts to reverse or slow, you have to think of closing your current position. Instead, you have to open your new position to match the emerging trading trend.
- Bitcoin Hedging
In the case of bitcoin hedging, you have to mitigate your exposure to trading risks by acquiring an opposing position to your already opened account. This strategy is applicable when you have concerns related to the market fluctuations against you.
- HODL Bitcoin Strategy
HODL bitcoin strategy says that one can buy and hold bitcoins only if he/she has a positive outlook associated with its long-term price. If your trading plan shows that you can easily sell your positions to limit your loss or earn a profit, you can set stop losses for closing your positions automatically.
5. Decide to Go Short or Long
While trading any of the financial derivates or cryptocurrencies, including bitcoin you may go both short or long. Here, the selection depends on the sentiment of the latest market. Going long implies that you expect a rise in the price of bitcoin and going short indicates that you expect a fall in the bitcoin price.
6. Set Your Limits and Stops
Limits and stops are the two crucial risk management tools. As bitcoin traders, you will get plenty of limits and stops to select from while trading with any reliable platform.
- Normal Stops
Normal stops are the ones, which close your position at your previously set level. However, they are liable to slippage in the case of any quick change in the underlying market price.
- Trailing Stops
Trailing stops follow a few of the favorable movements in the bitcoin trading market to lock in profits. These stops may even cap your risk present at the downside. However, these stops may even be prone to slippage easily.
- Guaranteed Stops
Guaranteed stops close out the position of any bitcoin trader at the set level irrespective of any type of slippage. You may easily set guaranteed stops but you have to pay some fees while triggering the guaranteed stop.
7. Close the Trading Position
Bitcoin traders may close their positions whenever they want to earn a profit or reduce a loss, which has gone to an uncomfortable level. You will get your profits directly in the trading account. On the other side, your account balance will deduct your trading losses.
Investing is not suitable for everyone; please ensure that you have fully understood the risks and legalities involved. If you are unsure, seek independent financial, legal, tax and/or accounting advice. This website does not provide investment, financial, legal, tax or accounting advice. Please conduct your own due diligence.