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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.

Do not overtrade

The major policy in bitcoin trading is placing orders only if sufficient liquidity is in the market. Cases of low trading volume are common and this may not be effective in influencing the price of Bitcoin to shoot up.in such scenarios, traders take sub-optimal positions which result in a few losses.
You should always understand the prevailing market conditions and only choose to trade when the trading environment is favorable.

Reading a crypto content

When starting, it is critical to keep abreast with the prevailing market conditions. This is only possible through reading various bitcoin-related content to get recent and important insight related to trading BTC. To some extent, you should subscribe to credible channels to help you access the latest crypto news and trends in the crypto ecosystem.

On balance volume vs trade price

The easiest market indicator in price movement is the relationship between on-balance volume and the asset price. OBV is typically a movement indicator based on trading volume changes in price. Should the price increase and the OBV happens to drop, then this is a clear indicator of a price drop.
Incases, where the OBV starts rising yet the price, is down, then the price is likely to go up matching the trends in OBV.

Conclusion

Trading Bitcoin can be costly if you don’t learn the ropes. The highly volatile market associated with price fluctuations can either help you make huge profits or lose all your investment. Though Trading BTC is prone to losses, you can overturn the perception through trading cautiously.