Golden rules for Bitcoin trading.
To say that the price of BTC has shot up over the years is an understatement. On average, BTC trading volume stands at a record 70% of the total crypto market. A common trend you need to put into perspective is the high volatility associated with trading crypto.
Any slightest crush in the Bitcoin market can easily wipe out all gains made in BTC investment. Therefore, it is necessary to consider many factors as you sink into bitcoin trading.
Coupled with a highly manipulative market environment and lack of proper regulation, extreme caution is required before investing in BTC. We put into perspective a few golden rules you should have in mind when trading bitcoin.
Start small think, big
The key rule in trading is minimizing risk. This is only possible through understanding the market before you inject in a huge amount of money. What you need to understand is that if you don’t exercise caution, you can easily lose your entire investment within a single day. To know more you can visit https://the-wealthmatrix.com.
Therefore, it is important to start trading with as little as 1% of your total asset which you can risk losing. Try to ensure you do not lose more than you can put in. The bottom line, don’t risk an amount you cant afford to lose. This will save you from the agony of losing all your assets in a single trade.
Alternatively, check out market prices and place many orders at different price gaps. Once you have set the order, be patient and understand the behavior of market conditions. The more you trade the more you will get to learn the ropes and become wiser.
Buy low sell high
Buying when the price goes down and selling when the price shoots up is a common trend that you can perfect to make a profit. The downside about ut the concept is that it is regarded as high risk. At times market forces may make it difficult for you to sell at a higher price should the price drop drastically.
To achieve the best out of this trading strategy, set price targets to guide you on when to hold, buy or sell. When starting you can opt to set your limit to at least 5% in both movements of the price to save you from the prevailing market conditions.
Diversify between trading and investment
First, before you venture into bitcoin trading, you need to distinguish between investment and trading. While investment focuses on building profit for a longer period through buying and holding of assets, trading leverages on a shift in price to make a profit.
Regular bitcoin traders generate income by taking profit from the price shift associated with trading platforms.
To counter the effects of trading, you may opt to invest in stable assets like litecoin, ether,ripple, and bitcoin. If you are a trading enthusiast, you should stick to trading less popular assets among them nem, dash, neo etc.
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