Beginner's Guide: 5 Bitcoin Trading Tips for New Bitcoin Investors
Let me guess: you’re curious about Bitcoin. You were drawn here to learn about Bitcoin trading tips because the idea that you can make money while sitting at home on your computer seems great, but you’re terrified of taking that first step to start the Bitcoin trading process. You may think you have to be a tech genius with savvy investing skills, but the truth is, anyone can get into the Bitcoin trading market successfully. While it may seem like a daunting task to enter into the world of cryptocurrency, the Bitcoin trading tips below are meant to give you a compass for your newfound Bitcoin journey.
1. Know Your Strategy
Whenever you start a new project, it’s vital that you spend time learning everything you can about the subject. This is especially true for Bitcoin trading because you’ll want to make profitable trading decisions. The first order of business is discovering the best Bitcoin trading platform that fits your needs. Luckily, we’ve done a bit of research here on the best Bitcoin stock exchange platforms. Before you begin trading, you’ll want to analyze the different strategies and figure out which works best for you. Here are some of the different Bitcoin trading strategies available:
Day Trading
Day trading is a short-term trading method that gives traders universal access at any time of the day for seven days a week. For this type of trading, target charts that are no longer than 30 minutes. Traders might only hold an asset for mere seconds with this type of exchange. They have to anticipate the short-term movements of their assets for a set period of time and sell or close out at the end of a trading day.
Swing Trading
Swing trading is a live trading method that has traders holding their assets longer than a day. They have the opportunity to embrace the “swing” of price fluctuations, but the freedom not to have to constantly monitor the exchanges. Swing traders can take advantage of a certain price movement and reap the benefits for a specific period of time. Traders can capitalize when the market value is high, selling once the momentum of a trend begins to decline.
Scalping
Scalping is the most lucrative, yet also the most complicated form of trading. Traders benefit from accumulating compound interest on smaller investments. This type of trading is very short-term and allows traders to make a substantial amount of exchanges in one day. It requires focus to make these quick trade decisions and overtime, the profits from these gains will build.
2. Understanding Volatility and Losses
One of the most useful Bitcoin trading tips for a newbie is understanding that the price of Bitcoin moves up and down very quickly. This volatility often makes Bitcoin trading attractive to traders, but it may cause you pause. Bitcoins may fluctuate in value by over or under 50% in a single day. This means that the savvy Bitcoin trader could buy Bitcoin at a time when its value is at its lowest, then sell at its peak. By constantly monitoring the value of your Bitcoin throughout the day, you can take advantage of high value times and decide to sell when it’s most profitable for you. As with any risk, whenever you trade Bitcoin, you make yourself vulnerable to potential loss. If you don’t sell at opportune moments, you could lose significantly. You have to understand that there will be times when Bitcoin trading just doesn’t go your way. A technique that more experienced Bitcoin traders do is implementing stop losses.
Stop Losses
Stop losses are tools that will automatically sell or buy your Bitcoin at a certain time. They
take away the burden of having to watch your position all day during an exchange. Often, Bitcoin trading requires a lot of discipline to keep track of the fluctuations in value and for a newbie, that can be hard to do. Stop losses allow you to predetermine exchange decisions and reap the rewards (or losses) without having to watch the market all day. The best stop loss you have is the most obvious one - let it go. Don’t linger on lost profit and keep trading.
3. Create a Bitcoin Trading Plan
After learning the basic skills needed to be the best Bitcoin trader, you’ll need to strategize. You’ll figure out which trade strategy works for you, then create a plan for execution. A trading plan will help you decide when to enter and exit the market. Similar to the stop losses, a trading plan will prevent you from becoming emotionally attached to your investments. It gives you the time to predict wins and losses before entering into a Bitcoin exchange. You’ll be able to understand the risks you may have to take in order to determine profitability. Set achievable goals that will add to your motivation. Remember, your trading plan can be flexible. Monitor your own performance and know that the old adage, “Practice makes perfect” applies here. Over time, you’ll improve your trading capabilities and become a successful Bitcoin trader.
4. Stay Updated
Along with its value, Bitcoin technology is also constantly changing. Bitcoin platforms are continuously formulating new cybersecurity resources to protect your interests. Another thing to stay updated with is cryptocurrency news. Relevant news topics could directly impact your trading market, the frequency of your own trading, as well as the value of your cryptocurrency. This way you can make knowledgeable trading decisions and maximize your profits.
5. You Are Your Own Bank
Lastly, one of the best Bitcoin trading tips is to understand how transactions work with cryptocurrency. Bitcoin traders have access to their own Bitcoin wallets through a private key and a public address. Your wallet key should be kept privately and never shared with anyone, but your public address is how you’ll be able to receive your Bitcoin. Bitcoin is an extremely volatile asset; trading can be very lucrative and it can also be a very interesting way to lose a lot of money. A common quote amongst Bitcoin traders is “don’t invest anything you can’t afford to lose”. Learn more about our easy to use network of secure ATMs today!