Trading cryptocurrencies is always a risky endeavour. One moment your up, experiencing your glory upon gaining profit, another moment, your down, sulking in the corner asking yourself where did things go wrong.
Bitcoin, hailing amongst the cryptocurrencies, has been constantly growing in the recent months. Its growth lured an ample number of investors and curious people who are so eager to quench their curiosity on what's store for them if they decide to take the jump and join the bandwagon. Unfortunately, the jump then fall principle doesn’t sound so appealing for a lot of people.
Trading Techniques to Consider
There are a lot of things to consider before trading in the market. There are also some techniques you need to know before starting to trade.
Know what you’re entering into
Many people invest in Bitcoin or any other cryptocurrencies just because a friend, relative or someone they know entices them about the endless benefits it could bring. With the aim of earning profits, they invest right away without properly researching what they are entering into. It is vital to know what and where you are putting your money for. It is important to educate yourself about its history, the common terms used, the trading types and the way it works for you to properly know how to deal with it.
Set up an account with an exchange
If you decide to finally push through it, an important thing you need to do is set up an account. Setting up an account with an exchange is the start, assuming that you are not opting for Bitcoin mining. Another important thing to keep in mind is choosing the exchange with a good reputation for Bitcoin trading such as Coinbase or CEX.
Develop a good strategy
There are two types of traders: long-term traders and short term traders. To develop a good strategy, you must decide first on what type of trader you will opt to be. The long-term traders are involved in studying price trends over long periods while short-term traders analyze the interday behavior of Bitcoin price and seek to take advantage of the price swings. The decision here will play a vital part in which path the investor will take, will it be long or short?
Do not invest it all at once
Trading and investing in Bitcoin is quite risky. Losses are inevitable but it doesn’t mean one cannot come back from a loss that may occur. Putting all of your money in one investment choice is very risky because if this company files bankruptcy, all of your hard-earned money will be gone. So, it is notable that one should invest in different fields or do a proper money management task to survive the threat of having losses or ending up in the curb without the chance of redeeming oneself.
Do not invest profit through a loan
As appealing as the idea of profit is going to be, always refrain from loaning to others just to have money for investments. The whole idea of investment exists through the principle of having extra money to spare hoping it would turn into something beneficial. Loaning money for investment just simply ruled that idea out. The hope of being able to pay back the loan amount when the profit comes is complete nonsense because profit is simply unpredictable in a competitive market like Bitcoin.
Make use of available technologies
Winning in a competitive market like Bitcoin just doesn't need skills and intelligence but also great technical skills and adaptability. Having modern technology gives traders and investors an edge on this competitive market. Obtaining good technology enables a trader to gain more sufficient pieces of information and ways to trade better.
It’s not all about winning
The main goal in trading in a new and competitive market like Bitcoin is not the idea of always winning but the cumulative gains at the end. Successful trading on Bitcoin does not mean eliminating the idea of losses but more on managing your losses to be trivial. Losses are inevitable anywhere, especially in Bitcoin. Having a few losses wouldn’t hurt, losses as much as winning, is an inherent part of trading.
Don’t let your emotions rule
One of what makes us human is the emotions that we feel. As often as not, this leads us to make abrupt decisions that we commonly regret especially when that emotion wears off. Unfortunately, as much as we want to be rational especially in trading, there are instances that we let our emotions to rule. Feeling fear and greed are quite common in trading but we must not let these emotions rule us in making decisions that we might regret later.
Making money in Bitcoin is not an easy feat. It requires a lot of attention and knowledge. One needs to have the guts to face risks and consequences that come with it. Some succeed while some fail. It is a way of life.