Have you ever felt like you want to quit bitcoin trading? Maybe you’ve been trading for months or even years, and you’re still not achieving the results you would like.
The fact is any trader that is now successful thought about giving up many many times! Speaking for myself, I wanted to quit many times.
This is especially true when all of your well-meaning family and friends keep telling you to “quit, and get a real job.” If you’re learning to trade I’m sure you can relate.
Almost a decade now, since 2009, Bitcoin has been part of the web and has been growing ever since. In the early days right after launch, the community of Bitcoin was mainly populated by controversial types like libertarians or internet anarchists who liked the freedom property of the coin.
The internet has no leader and this should also count for a digital form of online money. Another popular property of bitcoin is that it’s a digital asset and therefore one could trade with it.
Back in 2013, the value of bitcoin blasted through the 1000$ barrier for the first time. This was the start of cryptocurrency being introduced to a bigger audience. The 1000$ border was a very important psychological barrier.
By breaking this barrier and gaining popularity also new coins were being introduced to the market. Since then the total market cap of the total cryptocurrency market has been grown from about 7 billion at the end of 2013 to 135 billion nowadays.
Interest Of New Bitcoin Traders
As we all know right now the cryptocurrency market has grown immense but also had a lot of bearish crash moments were daily selloffs of 20% were no exception.
This volatile market with no rules or central leadership gained a lot of interest from bold traders worldwide trying to conquer with this ‘online money beast’.
Of course, there is a lot of risk in this market but also a lot of profit to make!
One of those ‘bold traders’ trying to win this zero-sum-game in my favor. In the early days of bitcoin back in 2013, Many participated mainly as an investor or ‘HODLER’ of bitcoin.
Since 2016 I also got more interested in altcoins and started to buy Ethereum, Litecoin, and other cryptocurrencies.
Some options were Poloniex, Kraken and Bittrex.
One of the advantages of Kraken is that I could open a euro account to buy Bitcoin and deposit or withdrawn Euro.
This differs from Poloniex and Bittrex where you can only lock your BTC profits in USDT or Tether.
How to start as a new bitcoin trader?
1. Do Research and Choose a Platform
So when you are new to this or do not have much experience with trading cryptocurrency all possible online trading platforms out there could be a little bit overwhelming.
Don’t worry too much about that. Currently, the biggest and most reliable exchange out there, in my opinion, is Kraken.
If you do not have the time or experience to trade on your own, you can use Bitcoin Investment brokers, the help you do the heavy lifting.
This online trading platform has its headquarters in Tallinn, Estonia. With more than 4,000 customers and low transaction fees.
To start bitcoin trading on your own, all you have to do now is setting up an account at Kraken and you are good to go.
Before you start buying into coins, it is very important to do some research.
There are several ways to do this but a good place to begin with is Coinmarketcap.
This website gives in a glimpse a total overview of the current market and has hyperlinks to every coin out there. Also, do some research into the technology of blockchain networks.
So now that I have a setup a trading account and have done my research, am I ready to go and start getting profitable? The answer is no.
2. Start Using Twitter
Nowadays social media is being used particularly by every human being under the age of 40 and to be profitable trading crypto, it is a must to have social media to get the most actual information about the markets.
The best place to go is Twitter, so it is crucial to set up an account there. On a daily bases, a lot of information is being shared by professional traders and it is very easy to start following them.
Here are some Crypto Twitter accounts to follow:
3. Technical Analysis
After you have done all this setup, you are ready to enter the world of the crypto traders. In my opinion there are two types of traders: long-term trader (swing trader) and short-term traders (daily).
It is up to you to choose which best fits your character. Whether you choose to trade short-term or long-term you need some extra tools to make good buying decisions.
First you need to know how to do technical analysis which is the study of price patterns. A good place to learn this is Investopedia. There are also several tools out there for using daily charts, but the most popular is Tradingview.
You can start there with technical indicators in your charts.
4. Implement a Trading Strategy
If you are willing to trade and donot have the patience to ‘HODL’ bitcoin for years, to be profitable in this volatile market, is to be very disciplined and you have to start implementing a short term trading strategy.
A proven fact is that retail traders who donot use a trading strategy often just throw their funds away and lose it all in the end.
Here is how to avoid this and how to set up a profitable bitcoin trading strategy.
So how do we go from here?
Basic Bitcoin Trading Rules
To start winning trades and be profitable in the end is to use a system and stick to it at all time. This means you should be disciplined and avoid too many risks.
Below some basic rules for being a consequent crypto trader.
- Avoid any emotion
See trading as a game where you can win but also lose and I will assure you, every trader has to deal with losses. If you lose a trade, never set up a new trade to cover your loss, it is not a casino!
- The trend is your friend
It is very important to see the bigger picture of the market. If the market is bullish (in an uptrend) your strategy should be buy-the-dip, if the market is bearish(in a downtrend) your strategy should be to sell high and buy back lower. Never catch a falling knife!
- Know what you are doing
If you want to go short the market, find more info about it and also know the consequences when you are trading this way. In my opinion, you should avoid at any time trading with leverage.
- Always have a plan
When entering a trade the market can turn against you at any moment. Have a plan and also use targets. It’s very important to use targets otherwise profits will go away.
- Track or backtest a strategy
If you want to use different strategies, first do some paper trading and do some testing. It’s very important to enter trades by using a system.
- Risk only what you can afford to lose
Trading is all about finding setups with low risk / high reward opportunities. To avoid high risk, every trade you make should never be higher than 5 – 10% of your total portfolio.
- Always use a stop loss
Like I said before, the market can turn against you at any time, it’s very important to avoid big losses. Therefore any trade you make should have a stop loss
3 Best Bitcoin Trading Strategies
There are several distinct strategies that traders commonly adopt when investing in Bitcoin.
One of them affectionately nicknames “Hodl” after a typo by a drunk trader writing on a web forum, is to just hold onto it long term while constantly monitoring the price.
Technical analysis trading relies on a detailed understanding of trends and data regarding Bitcoin’s value.
- The simplest Bitcoin trading strategy, affectionately nicknames “Hodl,” is to just hold it and keep a close eye on what happens.
- Technical analysis trading involves using a wide array of data sources and data analysis tools to figure out what trend lines mean.
- Scalping is a short-term, high-intensity strategy in which you open and closes multiple positions in the same few hours.
“Well, every Bitcoin trading strategy is based on supply and demand principles meaning the price of the cryptocurrency relies on those two basic parameters.
When the demand is higher than the supply, Bitcoin grows. Otherwise, the main cryptocurrency goes downwards.”
PS: If you do not have the time or experience to trade on your own, you can use Bitcoin Investment brokers, the help you do the heavy lifting.
If you are a trader and are trading frequently in the markets, what is your favorite trading platform?