Trading or investing in Bitcoin (or other cryptocurrencies) seems to be the new buzzword these days. But, ask any battle-hardened investor, and they will tell you that Bitcoin trading is no joke.
And with the current value of Bitcoin soaring high, even a slight mistake or oversight on your part could end up costing you thousands of dollars. Here are some tips on a quick and easy Bitcoin trading strategy for those who are looking to dabble their toes in cryptocurrency investments.
Bitcoin trading is the process of buying low and selling high, but unlike investing, Bitcoin trading is more fast-paced and does not involve HODL on to Bitcoin or other crypto for long periods of time. Because of the nature of Bitcoin trading, one has to try and predict the movements of the price by studying the industry and looking for certain indicators or signs of price movements.
Those who are successful in Bitcoin trading either use technical analysis or fundamental analysis to predict Bitcoin’s future price. Before you can begin, there are different types of trading methods that can be used to trade in Bitcoin.
Best Bitcoin Trading Strategies for 2021
In this method, the trader will conduct multiple trades during the day with the goal of making the most profit possible with short-term price movements. If you choose this route, you will be spending a large part of your day glaring into a laptop or PC screen to find small changes in Bitcoin prices.
This is another popular method of Bitcoin trading and is got to do with extremely short-term trading. The whole idea behind scalping is to make small profits, which will limit any high risk and grows profit up over time. Unlike day trading, scalping involves making hundreds of trades during the day.
Swing traders take advantage of the swing in Bitcoin price cycles. The trick here is to try and spot the start of a specific movement in the Bitcoin price, enter the trade, and hold on until the movement dies down, which makes them a profit. Unlike the other two types of Bitcoin traders, swing traders are more focused on the larger picture rather than monitoring the prices every minute.
Predicting Price Movement
There is no way to predict Bitcoin price movement. However, traders use two methods that get them a good idea of what could happen. Fundamental analysis looks at the value of Bitcoin as a technology and the latest news regarding Bitcoin, such as new rules and regulations or Bitcoin’s acceptance in certain countries.
On the other hand, the technical analysis method tries to predict Bitcoin prices by studying statistics and market trends, trading volumes, etc. In this method, the trader looks for patterns in Bitcoin prices that they can use to predict possible future prices to make a profit.
To find out more Bitcoin trading strategies and get familiar with ways to read the changing market trends, visit The News Spy to find out more about all the latest happenings in the Bitcoin space.