Understanding the best bitcoin trading strategies.
Introduction
It is well known throughout the cryptocurrency market and around the world, in general too, that the Cryptocurrencies, especially Bitcoin which was intended to be used as a currency on a daily basis is far from it this goal. On the contrary, it is predominantly considered as an investment asset and many cryptocurrency experts take advantage of the price slight price differences between different exchanges and undertake Bitcoin day trading through a number of Bitcoin trading strategies. It is estimated that this generates huge amounts of return on investment, if the trader is a professional in its field, in other words, the price fluctuations or volatility of Bitcoin is made use of, by a variety of Bitcoin trading strategies.
Bitcoin trading strategies
In this article will try to understand some of the best Bitcoin trading strategies that newcomers in the field would be able to apply in order to gain profits.
1. The first and the foremost prerequisite, that a cryptocurrency trader needs to have is a clear knowledge about a particular cryptocurrency coin or token that he or she is looking forward to investing in. If he or she fails to do so, then the whole point of investing in the cryptocurrency domain becomes pointless.
2. Once the trader has gained enough knowledge pertaining to the Blockchain technology as well as Cryptocurrencies, the next step must be undertaken and is one of the key Bitcoin trading strategies. One must register themselves with a cryptocurrency exchange by opening an account with it. A cryptocurrency exchange is nothing but a marketplace to trade cryptocurrencies.
3. The next strategy of Bitcoin trading strategies is that the user needs to make sure that a particular cryptocurrency coin or token is available or listed on the cryptocurrency exchange. Coinbase is the most reliable cryptocurrency exchange that one can rely upon.
4. There is a lot of research work to be done in order to get the maximum profit out of Bitcoin trading strategies and one of them is doing an extensive background check on each and every cryptocurrency exchange by going through its reviews.
5. Long-term investment is one of the most strong factors in the cryptocurrency exchange, as it doesn’t require much effort from the user’s side when compared to the process of day trading. Coinmarketcap proves to be one of the most reliable websites which contains information about all the cryptocurrency exchanges along with their market specifications. Basically, the cryptocurrency coins must be divided into three categories and are one of the best Bitcoin trading strategies. The three categories are as follows.
A. Large Cap (top 5 cryptocurrencies)
B. Mid Cap ( above $200M )
C. Low Cap ( below $200M )
6. The user must clearly understand that one of the most important Bitcoin trading strategies, is understanding the underlying technology and its practical applications in the real world because it is the only means to decide the future of a cryptocurrency coin. One must keep the most basic and important principle in the cryptocurrency domain in mind, which is “buy low, sell high” in order to optimize their profits.
7. Another most important Bitcoin trading strategies are to have a highly reliable form of cryptocurrency wallet, in order to store Bitcoins and other Altcoins which the traders would have deemed profits from. The cryptocurrency wallets must be highly secure and it is personally recommended to use hardware Wallets or paper Wallets and not the web-based Wallets.
8. Once the beginners have gained enough experience in the trading process, they can make use of intuitive charts that display the trend of a particular cryptocurrency coin across various exchanges. One of the best Bitcoin trading strategies is that one can use various kinds of indicators that the charts provide which indirectly helps in predicting the direction of cryptocurrency price movement. Some of the well known and highly reliable forms of indicators are MACD, RSI and Bollinger Band.
Conclusion
However, even if the user applies some of the best Bitcoin trading strategies the fact is absolutely undeniable that the cryptocurrency market is highly volatile in nature and the prices keep bouncing up and down every few minutes. Therefore, the investors must brace themselves for any kind of surprise that the market might pop at them.
