siliconindia | | DECEMBER 20209It has a straightforward premise. Hold onto the bitcoin and hope that its price will surge again, making it possible for you to sell it later on with massive gains. Although it is not an elaborate trading strategy, it can be very beneficial advice to those who are new to trading. It is essential to keep in mind that the price of bitcoin can drop instead of increasing. It is why one must have a plan for risk management when you opt to use this method. HEDGING:Have you ever heard of the term "hedge your bets"? It is what this trading strategy means. Because Bitcoin is so volatile, there is always a chance that you will lose money while trading in the short term at some point. It is why you must always hedge your bets by ensuring that you open the trade which will in turn help in mitigating the risk. There are several ways you can always go about it:· It is always possible to short sell. It means that you can still sell your bitcoin expecting that the price will drop so that you can purchase it back at a reduced price. Most of the traders will always borrow bitcoin from a broker and trade it on the exchange after which they will return the amount they did borrow. However, this can be a bit risky when the bitcoin prices increased instead of going down. · It is also possible for one to hedge using contracts for difference (CFD) that are derivatives instead of the real cryptocurrency. In such a situation, you will have to hold your bitcoin hoping that the price will increase in due course but open the CFD which bets on the price falling. Whether the price will increase or decrease, your bitcoin gain or the CFD will help in offsetting the loss on the other. · You can also hedge the bets using bitcoin features. The contracts are between two parties that will agree to trade bitcoin to a special price on a future set date. It does not matter if the bitcoin price will increase or drop on that set date; all you have to do is make the trade and settle for either a win or a loss. TREND TRADING:Trend trading refers to a strategy that depends on the current Bitcoin trends in the world. You will always have to keep a close eye on what other people are talking about and come up with a plan on the things you will have to do. For instance, the popularity of bitcoin increased significantly in 2017 when its price rose to almost $20,000 per BTC. Several reasons led to an increase in price, although the main reason was that bitcoin did receive lots of publicity.THE POINT WHERE THE LEVELS ARE BROKEN UPWARD OR DOWNWARD IS WHAT IS REFERRED TO AS THE BREAKOUT POINTS. WHEN THIS HAPPENS, YOU CAN ALWAYS EXPECT THE BITCOIN PRICE TO BE VERY VOLATILE
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