Satasho Nakamoto will arguably go down in history as the person responsible for the most revolutionary invention of this century. Bitcoin is poised to have a huge impact on the entire business landscape and this is probably the reason behind the Bitcoin craze. But before taking a deep dive into Bitcoin trading there are a few things you should be aware of.
Here are 6 Bitcoin trading booster tips that you need to know:
Understand the risks
Because they are unregulated, crypto currencies are volatile. Bitcoin prices can fall and rise sharply because of market sentiment. This level of fluctuation is likely to continue so you must be prepared for it. Regulatory changes also have a huge impact on the price. Even though the prices are trending upwards over time, short-term investments that are not well considered can result in losses.
Know what’s happening daily
The day the Chinese government announced their decision to bar banks from participating in ICOs, the price of Bitcoin nose-dived. This is just an example of the importance of staying updated with what is happening in the cryptocurrency market. You can subscribe to news blogs, news feeds, and telegram channels to ensure you are in the know. This will help you in making smart Bitcoin trading decisions.
Study the charts
Bitcoin prices have always been very volatile. Studying the charts will reveal important trends like moving averages and levels of support and resistance. This can help you identify the best time to buy or sell your bitcoin for maximum profits.
Buy the dip
Governments and financial institutions hate Bitcoin. For this reason, they will use every chance they have to try to kill it. Such attacks usually cause the price of Bitcoin to plummet. However, so far Bitcoin always makes a comeback. Since this trend is expected to continue over the years, it is always a good idea to ‘buy the dip’.
Scale-out (take profits)
If you are in Bitcoin trading for the long haul, the temptation is to acquire as many coins as possible and then horde them. Granted, this is a great strategy to maximize the long-term returns. But it is better to mitigate some risk by taking some of the profits along the way. Aim for recouping your principal at the very least.
Impose limits on orders
A limit order gives you immunity from price fluctuations. If a price goes beyond your set limit, a buy or sell order can execute automatically. Patience is important when using limits because it might take time before the prices rise or fall again.
Finally, remember not to trade emotionally when Bitcoin trading. Amateur traders make their buy or sell decisions as a reaction to what they hear other buyers and sellers in the community say. Instead of taking this approach, gather facts and make an informed decision.