The entire crypto news industry went berserk after a report published by a research firm revealed that deep-pocketed Bitcoin whales had plunged into the Bitcoin market to leverage the dump in Bitcoin prices to their advantage during the fag end of 2018. The Bitcoin had seen a fall of about 85% in its costs. The whales knew exactly what they were doing. But have you ever wondered what Bitcoin Trading Secrets these whales see that you don’t? What gives them the edge over other interested investors?
More than the secrets, it’s about the application of the correct Bitcoin trading strategy that matters. There are hundreds of trading strategies that can help you become rich. The realization that Bitcoin is the hottest trading market currently has got people believing in its potential. Also, it is based on the blockchain technology, which enables transactions without requiring a central exchange. This has helped it assume greater significance.
Trading Bitcoins for profit is a universally accepted cryptocurrency trading strategy. You can use it to trade any of the 800-plus crypto coins that are available today. So here are some Bitcoin trading secrets that you didn’t know about.
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Delve deeper into the Bitcoin market to understand it
The high volatility of the Bitcoin market is well-known, which makes it critical for you to understand it before you decide to implement your strategy. Many factors can influence the Bitcoin price, such as-
- Supply: While the Bitcoin’s supply will be capped at 21 million coins, new coins are being consistently mined. A lower mining rate can slow down the introduction of new Bitcoins to the market and consequently reduce the supply speed.
- News: Like everything else, the public perception of Bitcoin is just as significant as other businesses. Any negative news about Bitcoin can have a severe impact on the coin’s market value.
- Events: From regulation changes to security hacks, any event of a negative nature can adversely impact the Bitcoin price.
Choose How You Want to Trade
Regardless of how you want to trade Bitcoin- through outright purchase of the coin or contemplating on its cost with derivatives- you must understand the method that you have chosen. If you want to purchase a bitcoin, you would so through a cryptocurrency exchange. The ownership of the coin would be yours, and you would keep them in the Bitcoin wallet in the hope that their value would appreciate in future and you can trade them for a profit.
If you instead choose to trade through derivatives by spreading bets and CFDs, you won’t have to take the Bitcoin’s ownership. You will speculate on Bitcoin’s price, which means that you can take advantage of the rise and fall in the value of markets.
Build a Trading Plan
Create a trading plan even before you get down to building a trading strategy. Having a clear plan in place will make you less likely to fall prey to emotions that often lead budding Bitcoin traders to their doom. Keep in mind the following aspects to create a top-notch trading plan.
Goals: These would be a set of realistic and achievable goals and demonstrate measurable statements of what you seek to achieve.
Style: Trading can be carried out in multiple ways, depending on how long you want to continue trading.
Attitude to market risks: Always be prepared for losses. This will help you develop your risk profile and determine how much capital you can use to trade and how much you would risk on each trade.
While the high volatility would discourage many to risk their money with Bitcoin, the potential of this crypto coin can also help attract many to invest in it. The crucial point is to demonstrate the willingness to stomach the risk and “buy when there is blood on the streets”. Invest in the market when it is down, and it would serve your interests when it is upon its feet again. That is where the ultimate Bitcoin trading secrets lie.