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Amazing Tricks and Tactics To Consider for successful Cryptocurrency Investments.
The popularity of bitcoin trading is increasing day by day, and the market has never shown any signs that it will be slowing down. In case you have ever considered getting in on the action, then this is the right time for you to strike.
Although there are several bitcoin trading tools currently available in the market, you will still require some understanding of the basic strategies that will help in ensuring you succeed. In this guide, we will be introducing individuals who are new to bitcoin supreme some top strategies that can still work for them in 2020. The seasoned traders can also refresh their memories and adapt to the original 2020 scheme.
- HODLing:
“HODL" is a term coined in 2013 with the BitcoinTalk Forum. It is not a complicated trading strategy acronym as it is the simple word for “hold” although it has been misspelt.
The initial post author did reveal that most of the traders who were still new to the game were not sure about their trading skills which were slightly better off HODLing bitcoin in a bear market.
Back in 2013, bitcoin did record a surge from $15 per BTC to cover over $10,000 towards the end of the year. The “HODL” term did appear in several cryptocurrency memes and is today among the trading strategies that are widely recognized.
It 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.
It meant that most of the people were interested in getting in on the action that led to an increase in its demand which in turn helped increase its value. It is always possible to engage in trend trading on any period regardless of the days, week, months or years. All you have to do is have an idea of what will take place next.
It is for that purpose that you can always consider using technical analysis to help you in making an educated guess. Several indicators in technical analysis include moving averages over time and relative strength index (RSI).
Despite trend trading appearing less risky when compared to other strategies, it is essential to remember that there are lots of factors which can influence bitcoin price. Some of these factors include governments implementing new trading regulations, other cryptocurrencies entering the market and businesses adopting bitcoin.
- Breakout Trading :
Breakout trading has lots of resemblance to trend trading. The difference is that you will aim to either purchase or sell bitcoin either at the start or close of a trend.
You must understand the resistance and support levels that are, in most cases referred to as floor support of the ceiling (resistance) and bitcoin price graph. In short, these are the price levels the bitcoin will never drop below or rise past.
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. The main trick to anticipate what will happen next
When you are in a position of doing that, you can always ensure that you make some great deals. There are also different ways you can choose the resistance and support levels, including looking at the volume levels, moving average or RSI. When you know that, you can always make an order to purchase or sell at a particular price point that makes some sense to you.
Just like the other strategies we have covered, the breakout trading also does have some risk. Hence, even though you are in a position to come up with an automated purchase or sell order, you must always keep a close eye on the movements of the market instead of remaining passive.
Essential Things to Know Before You Trade Bitcoin :
Before you get into bitcoin trading, there are some essential things you need to know. As we already mentioned before, it is straightforward to get started with bitcoin trading but never that easy to become a master in the field.
Here are some of the essential things you need to know before you get into bitcoin trading.
- Research the chosen trading strategy :
There are more to the four strategies we have covered in this guide. Always ensure that you carry out proper research before you make any commitment to any of them. There are several online resources such as
- E-courses
- E-books
- Videos
They can help you to teach bitcoin trading. All you have to do is remember that none of the above strategies regardless of their popularity, come without any risks.
- Come up with a bitcoin trading plan
When you know the strategy you are interested in pursuing, it is vital that you now create a trading plan. Just like another type of business venture, it is always essential that you have your criteria for success and failure already in place. When you do not have a plan, there are high chances you can be a victim of your greed for fear of losing in the end. The project should include goals that are realistic for creating an integrated profile of how much you would be willing to lose or invest and anticipate risky profiles.
- Ensure that you mitigate any risks
The risk has been mentioned a few times now, and there is a good reason behind it. Not all trades consider that Bitcoin or stock trading consists of any risk factor. One of the significant risk factors for bitcoin trading is the volatility of bitcoin prices.
One of the ways you can always use stop-locks orders and restraints to help reduce risk With this, you can always ensure that you secure any profits and reduce the chances of incurring losses before the market gets out of control.
Get a reliable and safe bitcoin exchange.
It would help if you considered the options you have when it comes to bitcoin exchanges. Not every deal you have is safe and fast to use. We, therefore, recommend you to carry out extensive research.
Are you ready to make some significant profits in 2020?
We do hope that you have discovered a bitcoin trading strategy that will help make you rich in 2020. The four approaches we have covered have all been tried and tested by bitcoin supreme. However, it would help if you remembered to carry out some extensive research and never be afraid of getting in touch with us whenever you need any advice.
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