Over the past year, cryptocurrencies have experienced a massive increase in popularity. Corporate giants, governments, and large financial institutions invest in them and ordinary investors who want to get their share of shares.
The legitimacy of cryptocurrencies has grown, and bitcoin trading has become increasingly popular, despite the significant risks associated with investing in such an incredibly volatile asset class.
Nowadays, everyone wants to get their piece of the bitcoin pie because, in one 12-month period, BTC has grown from $ 8,000 to more than $ 60,000.
This guide will give some valuable tips on making money on Bitcoin trading without risking all your capital. To be successful in trading bitcoins, it is necessary to conduct critical research before starting trading.
Learn about different wallets and exchanges, explore different types of digital assets. Learn how to exchange bitcoin for other cryptocurrencies or fiat currencies without paying massive commissions and compromising your funds’ security. To achieve success, a trader should skip none of these initial steps in bitcoin trading since they can only make correct market decisions based on knowledge. Find out what drives the price of Bitcoin.
Whenever you decide to open a position with BTC, you should ask yourself a single critical question. Will I be able to earn money by trading bitcoin in the current market?
The answer will depend on several factors. First, look at what the media is saying and what the mood is on social networks. If fear and uncertainty are caused by a large coin dump or a security breach on a central exchange platform, people will sell short positions, and the price will fall. Conversely, an increase in the value of HODLing whales keeping part of the already limited supply (limited to 21 million) out of circulation, or, conversely, the media hype due to the investments of a well-known corporate player, can raise the price of BTC. Another factor that has increased the price of bitcoin over the past year has been the growing distrust of fiat currencies, which have weakened due to the economic consequences of the global pandemic. Then people turned to another store of value-Bitcoin.
Learn the basic skills of fundamental and technical analysis
To make money by trading bitcoins, you need to be able to make informed market decisions. There are many sources of information, and you should use them all. The first way to predict market activity is fundamental analysis. Study the company behind the cryptocurrency, check the team and the project, study the technology and the market demand for the proposed utility.
You also need to keep up to date with the latest developments in the industry on the leading crypto news sites. For example, news about the halving of the bitcoin exchange rate will contribute to an increase in the price, or corporate investments, such as the massive purchase of bitcoin by Tesla at the beginning of the year. On the contrary, a new regulation of cryptocurrencies or a large sale of coins can send cryptocurrencies on a downward trajectory. In addition, tracking the conversations in the community on social networks will help you develop an effective strategy and monitor the market mood.
So, how to make money on Bitcoin trading? Constantly read, listen and learn.
Technical analysis is another way to understand what is happening with your chosen cryptocurrency at any given time. It includes studying the history of asset prices, assessing support and resistance levels, learning to read the order book and candle charts, as well as understanding technical indicators such as the relative strength index, moving averages, balance volume, and Bollinger bands to identify patterns and trends that can help you predict the future trajectory of the coin.
Set profit and loss limits
Do you want to make money on Bitcoin trading? Be smart while maintaining security.
Trading bitcoins, especially in the short term, exposes you to an exceptionally high level of risk, which must reduce at all costs. The best way to achieve this is to set stop loss and take profit limits. This involves setting a predetermined price at which you automatically exit the transaction.
For a Stop Loss order, this is the price below the current value of the coin, so if the price falls while you are away from the screen, your losses will be stopped, and the position will be closed when the pre-set price is reached.
With a Take Profit order, your position is closed if it reaches a pre-set price above the current value. This protects you from a scenario in which there will be a sudden price reversal, and you will suddenly lose all your achievements.
Find the style and strategy of Bitcoin trading that suits you.
Bitcoin trading can be carried out in different ways. Some of them are riskier than others. To decide on the trading style, you need to clearly understand the degree of your experience and knowledge, know your acceptable risk level, and decide how much time you can devote to trading.
Perhaps HODLing Bitcoin is best suited for you. Buying and then storing it for a long time is a relatively safe strategy that requires almost no effort, although your capital will lie idle in the wallet for an extended period of time.
Alternatively, you can be a natural risk-taker who likes the adrenaline rush of swing trading, and he has time to spend time in front of the screen, opening and closing trades in quick succession on all exchanges. With this type of trading, it is always helpful to reduce risks. Hedging bitcoins and diversifying your portfolio with various fiat and cryptocurrencies ensures that all your eggs are not in one basket.
There is one strategy, crypto-arbitrage, which, admittedly, is characterized by shallow risk since it does not expose you to the danger of the volatility of the cryptocurrency market. It involves taking advantage of temporary price inefficiency on exchanges. These are short periods during which the coin is available on different exchanges at different prices simultaneously.
Update your lifestyle
Depending on the amount and period of investment, you can receive a guaranteed return on investment, reaching 108% per year.
Get a stable passive income, allowing the fully automated Intelfin system to make the proper steps, using algorithmic trading capabilities with hybrid intelligence around the clock.
Well, what are you waiting for? Live the life you dreamed of.
Learn more about crypto arbitrage or explore many different topics related to the world of crypto trading on the Intelfin blog.