How to Select the Right Trading Strategy for Bitcoin?

Bitcoin trading is not different from the buying and selling of goods and services with a motive to earn profit. Bitcoin trading is not rocket science; only a few Scientists can perform the task. Although bitcoin trading is straightforward from traditional trading, you do not have to wait for your transaction to get verified because bitcoin uses a different base known as the blockchain. The main motive, or the reason behind the creation of bitcoin, is that it creates a currency that no single identities control. So, if you are planning to trade Bitcoin, you must invest in a reliable trading platform like Immediate Edge

Traders trade bitcoin with a motive to earn a profit, but having the right trading strategy and the right time to get in the market can help maximize the profits. Bitcoin is a highly volatile asset, and we can see the sudden hikes and falls in bitcoin prices. To control the volatility, we can use the dollar cost averaging (DCA) method to help manage the volatile price. Dollar-cost averaging is a making average while trading. For example, suppose purchasing bitcoin in the morning (it is assumed that the market rises in the morning) at a high price, and the market shows a downward trend. Then you can reinvest a fixed amount of money and keep investing the money till the market starts gaining. It can start your profits when the market rises, thus saving you from significant losses.

Best trading strategy to trade bitcoin

Day trading

This strategy is to trade bitcoin on the same day of purchase. They are looking for the right time to purchase bitcoin and sell it as the price rises to book small profits. For successful trades in day trading strategy, traders often use technical indicators to select the right time for entry and exit for trade.

Range trading

In this technique, the trader depends on experienced analysts who can better predict the support and resistance levels. The resistance level refers to a point up to which the prices are assumed to rise, and support is the low level up to which the prices can fall. During a trade, if the prices fall more than the support level, it is better to exit the trade and leave the market as soon as possible. Resistance is the price that is always up from the current price, and support is the price that is below the current market price.

Scalping

Scalping includes the increased trading volume to book profits. Scalping is a risk-involved strategy that can draw you into losses. Although an intelligent trader always takes care of essential rules like margin requirements and other factors to hold the position in the market to gain profits. Scalpers deeply analyze past trends, crypto assets, and volume to choose the entry and exit from the market.

High-frequency trading (HFT)

A quant trader often uses high-frequency trading. This strategy involves trading bots and algorithms that can help you quickly enter and exit the market or a crypto asset. Developing such market trends and trading bots needs vital concepts about markets and knowledge about computer science and mathematics. It can be said that HFT is for existing or advanced rather than beginners.

Dollar-cost averaging

It is a strategy that is most commonly used to make the averages of crypto assets. First, you must find a suitable entry and exit point in the crypto markets. In the dollar cost averaging method, traders invest some fixed amount over a fixed period. This technique can build wealth in the long term and help store bitcoin at lower prices to earn profits in the long run. Using the DCA technique to exit the markets can help you exit the market in its style; you can use technical charts, which can help you give the right time to exit. 

Building a balanced portfolio

You invest only some of your money in a single opportunity. Doing so can take you down in losses. Instead, choose over 4000 active cryptos to trade and include strong coins like bitcoin, Ethereum and Cardano into your portfolio. Doing so can reduce the risk of losses. If one coin loses, another one is ready to cover the loss. It can help your portfolio yield favorable returns in the short and long term.

Conclusion

These are some of the right trading strategies also, but more is needed to guarantee success in profits. You must know properly when, where, why, and a suitable time to invest in bitcoin. You can get help from your family or friends who are currently involved in crypto trading, and also you can hire a crypto expert, or you can get classes to learn trading with bitcoin. It can help you ensure your success in bitcoin trading. The prior strategy is that bitcoin prices regularly change and do not give time to change your decisions. So it is better to get the essential information before investment.

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