Trading Bitcoins is not as easy as it sounds; there are multiple factors involved and many considerations that you should take into account to get the best possible outcome. Studies show that many young investors and millennials are becoming more and more skeptical of the traditional monetary systems and are showing a keen interest in crypto trading.
What are the things you should consider in Bitcoin trading?
- You should ideally learn the art of technical analysis. Bitcoin’s nature is different from that of other traditional assets because it is not regulated by any centralized bank or institution. As such, many factors can have a direct influence on finances like news events. Bitcoin prices are speculative by nature and do not conform to traditional financial theories. This is why traders must evaluate price charts, apply different technical indicators, and read price actions.
- As a trader you need to understand that you cannot think of trading as a race. You need to follow a sustainable pace and not go overboard with trading. Trading round-the-clock is not practically feasible and it will have negative repercussions. You have to set specific schedules for conducting trades. Continuous trading will only lead to fault decision making and yield subpar results.
- You must be updated with everything that is happening in the crypto world around you. Make sure that you are familiar with every new launch such as bitcoin loophole app which helps young bitcoin traders to trad like a prol and earn profit. While there are no GDP releases officially, there can be unexpected news which may influence Bitcoin prices. So, it makes sense to keep a look out for the news happening around you to get the best insight into the trade scene.
- Your task is to use prudent leverage. When you use too much of it, that can lead to reckless fund management and your trade account will be drained out soon. If you use too less of this leverage, you may lose out on premium trades. So, maintaining leverage effectively demands a tough balancing act on part of the trader.
- A mistake that many traders make is referred to as averaging down, where he buys more coins when the price starts to fall in the hope that a good asset is available for cheaper prices. This logic may work in investments but not trading. Beginners commonly make this error and they find themselves in a deeper hole in the process.
- To trade well you have to know the art of implementing stop-loss orders. The Bitcoin market is so volatile that prices can oscillate easily, but this works in favor of investors and traders. Values can fluctuate between 5% and 10% daily, and this will appeal to traders willing to take risks. But, regardless of whether you trade with CFD or cash you must deploy a stop-loss order when you trade Bitcoins. This will protect you against catastrophe if the trade goes south. There are many traders who buy a specific crypto asset but are not able to sell the coin when the prices fall dramatically without incurring big losses. The stop-loss will protect against this debacle because it is typically placed about 2%-4% below the buying price.