Bitcoin trading is more popular today than it has ever been in the past and this is why you need to know the tips and tricks of trading to make hay while the sun shines. Instead of diving into the deep side of the pool, it makes sense to test the waters by using some of these tried-and-tested trading strategies for beginners:
- HODLing: This has to be the most popular and safest Bitcoin trading strategy for newcomers. It literally means “holding onto Bitcoins for dear life”. The phrase had become popular in 2013 when a trader wrongly typed holding as “hodling”, and the term stuck on. It indicated maintaining a long-term position on Bitcoins, or holding onto Bitcoins for a long time hoping that prices will eventually escalate. On the other hand, the bitcoin price is also on the rise due to invention of automated trading apps. Visit https://kryptomoney.com/is-bitcoin-code-as-great-as-everyone-says-it-is/ to know how bitcoin code, an automated trading app, works. But, the Bitcoin is known to be volatile and therefore, it can be concluded that this strategy may lead to losses ultimately. So, you need to have a risk management plan before you start HODLing.
- Hedging: People who already have Bitcoins can consider using this trading strategy. It means hedging your risks when you are convinced there will be a sudden short-term fall in the prices of Bitcoin. So, you open strategic trades to eliminate risks of your existing position. When market prices fall you can then re-purchase the Bitcoin for the low price and thereby make profits from the difference. So, losses to the original Bitcoin are offset by profits from the short trade. Most traders do hedging using CFDs or contracts for difference. This strategy too comes with many risks because once you start selling Bitcoins, there is no limit on the degree to which the market can go against you or how much losses you may have to bear ultimately. This is why you must have a proper risk management plan.
- Day trading: While the experienced traders may want to hold onto their Bitcoins for the long-term, the beginners may want to try their luck at day trading. This strategy appears quite interesting because crypto trading is highly volatile, and the Bitcoin can be traded any time of the day or night. So, you are likely to get many lucrative trading opportunities every day and use technical indicators to identify trends. Executing bitcoin era test 2021 will help you learn the efficiency of automated trading.
- Trend trading: This is another of the popular Bitcoin trading strategies for beginners because a trending market will continuously reach lower lows or higher highs. This trade strategy will be useful for different time-frames. So, if there is an upward trend, traders will latch onto it for fear of missing out. But, for this to succeed, you need to stay updated with all events and news in the crypto space that can impact Bitcoin prices. Trend trading depends on following technical analysis for predicting the direction in which the market will move.
- Breakout strategy: This entails entering the crypto market as soon as possible while a trend is going on and waiting for prices to break out from the earlier range. The expectation is that when the market breaks through a resistance or support level, there will be dramatic volatility and Bitcoin traders should enter the crypto space at that time and ride the trend from beginning till end. Here also, traders will have to use technical indicators and volume levels to identify trade entry points.
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