Bitcoin trading is the process of buying and selling bitcoins. Bitcoin exchange platforms match buyers interested in acquiring Bitcoins with sellers who are willing to sell them. The prices at which these transactions are being carried out, depending on multiple factors like supply & demand, market outlook, etc.
The very first thing that you should consider before starting bitcoin trading is your budget. As the prices of bitcoins keep fluctuating up to 200% each year, it is very essential for you to know how much money you would be investing in the cryptocurrency space. Moreover, only invest what you can afford to lose as there’s no guarantee or safety net if something goes wrong while trading bitcoin.
In order to trade, you must register yourself on a number of exchanges that can be found online. In addition to that, you should have basic knowledge about the technology behind bitcoin. If you are looking forward to getting started with trading bitcoins then have a look at the best bitcoin trading tips. You can visit https://bitcoinprime.io/.
The bitcoin market is extremely volatile and so do their prices. There can be massive price differences between two exchanges which will lead to huge losses if not accounted for properly. The major reason why there is such high volatility in the space of cryptocurrency is because of its unregulated nature and low liquidity levels as compared to other financial assets like stocks or bonds.
The trading bot gives signals about when it wants to buy something (when an indicator turns green) when it wants to sell (when an indicator turns red) when it’s neutral/bullish (blue), and when it’s bearish (purple). The signals are in the form of percentages, just like in the image above.
Calculate the Profits
Thinking that Bitcoin will appreciate in value is not enough of a reason for you to buy it. You should also be thinking about how much profit can you make on each Bitcoin. Those who know how to calculate their profits are the ones who succeed!
What if you don’t want to do your own trading? There are bots out there that can do this for you. Some are free, some charge a monthly subscription fee. Look into it and find out which one suits you the best.
One very important thing to understand is that trading bots are computer programs, not magicians or something like that. You can’t expect them to make money for you while you sleep they only work when the markets are open.
The trick is finding a bot with good strategies and one that has enough volume of users so there’s always someone else available to buy/sell at your prices.
The Past Performance of Bitcoin Trading Robots is not an Indicator of Its Future Results. This means it doesn’t matter if the bot performed great last month or last year, what matters is how well it will do in the future!
Control your Emotions
Realize that your emotions play a huge role in trading. How you feel can influence what price you’ll be willing to pay or ask for a certain cryptocurrency. It’s important to stay objective and not let your emotions get the best of you! That’s how most people lose money in this market – they invest with their heart, instead of their head.
Don’t be Fool
Don’t let anyone fool you into believing that Bitcoin trading is easy. Just like any other trade, it requires effort, time and knowledge to become successful at it. You must put enough hours of work into your bitcoin trading so you can learn from your mistakes . Unlike other markets, there are no shortcuts or easy ways to make money out of cryptocurrencies.
As mentioned before, bitcoin trading is unregulated which means no one can help you if something goes wrong. There are however some strategies that will reduce the risks associated with cryptocurrency trading. You can try out things like stop-loss orders or hedging.
A Stop Order allows your trade to be executed once a certain price has been reached on the market of your choice. This way you don’t have to sit there and watch for trades all day long. A Stop-loss order can be described as an order placed with a broker/ platform which triggers a sale when the security hits a certain price point.
In other words, it’s an automated sell command given to a trader, who keeps his coin from getting sold by putting in place trigger points to sell his coin at a certain price. The Stop loss order will be executed as a market order when the price of cryptocurrency gets to the predetermined stop point. So once you set up a stop-loss, your purchase can never go down in value, it would always stay at that price or higher assuming the buying pressure is still bullish.
For example: Let’s say you bought one BTC worth $8,000 and put a 10% stop-loss on it which means if your coins drop by over 10%, your trade will automatically close itself. If you had done this correctly, you’d now have $6,200 instead of losing all of those savings made from the first trade.
This is another type of security measure to protect against price fluctuation. Hedging involves taking two or more opposite positions to offset possible losses. For instance, if you are holding ETH that is currently valued at $1,000 each but you are worried that its value will decrease tomorrow, you can go ahead and buy some BTC with it instead. Then if the price of ETH falls, your investment in BTC will make up for the loss you made on the first trade.
Be Patient & Trust Your Own Judgement
Just like any other market, there are always swings in prices regarding cryptocurrencies. The best thing to do is stay calm and don’t let yourself get carried away by FUD (fear uncertainty doubt). If you see something happening that doesn’t feel right, check it out and if it doesn’t add up, don’t invest. The market is there to offer opportunities for those who take the time to research about them and choose wisely!