4 Best Bitcoin Trading Strategies That Lead to Success
Everyone wants to trade Bitcoins these days and with good reasons too. Investors are sure they will make huge profits by trading Bitcoin smartly. Since the crypto market is very volatile the chances of earning a lot of money at one go are very high. But, before trading in Bitcoins, you should know about these strategies. These following trading strategies are found to be very effective and have helped traders get big returns on their investments:
- Scalping: The main idea behind scalping is that you open multiple positions in one day itself. This is certainly not a new concept because people have already used this Forex trading and stock trading. This strategy helps traders make big profits because of the sheer number of positions that they have kept open. This method is therefore considered to be very suitable for most traders, but you should know its pros and cons. While you can open more than 10 positions using this strategy, allowing you to win big amounts, you have to be constantly present monitoring the situation first hand. The entry and exits are quicker and you do not have to wait around for the prices to “mature”. When you get reasonable profits you can simply exit the position and search for another one. You do not have to “freeze your money” and since the Bitcoin prices are volatile, you get to make good earnings every day. A significant drawback is that you must focus on prices and charts. However, you can increase bitcoin trading using automated trading software such as the bitcoin revolution which takes care of every aspect of bitcoin trading autonomously. Visit https://www.bitcoingrowthfund.com/ for a detailed review of the same. You are likely to get exhausted than other traders if you do scalping.
- Hodling: This strategy is perhaps the simplest for traders, especially newcomers. You do not need to have prior experience or training to use this strategy. All you need is some capital and a lot of patience. You can buy assets and hold onto these for the long haul so that prices go up with time. The term “hodl” appeared in 2013 at a time when Bitcoin prices were falling and a drunken trader posted his comment and mistakenly typed “hodl” instead of “hold” in a forum. Since then, this term has become popular and the hodling strategy is by far the most commonly used one.
- Breakout Strategy: This is not an otherwise popular trading strategy for Bitcoins but can yield positive results when done rightly. Breakout is used mainly by active traders. They will invest at an entry where they can identify the support and the resistance areas which signify breakouts in new directions. So, the asset with break upwards, going past the resistance or ceiling, or it will break downwards and fall below the support or base. You will have to wait for a breakout above resistance, wait for the bounce-off that then becomes your support. When the coin begins trading over that new support, the market volatility will go up and the prices will also move upwards.
- Balanced Portfolio Strategy: This is for traders looking for balance in their lives. This means buying many assets or coins for the same price across the crypto market. For instance, you can invest the same amount of money in buying Litecoin, Bitcoin, and Monero. So, you are spreading your risks through this plan. It tests different crypto coins when you cannot be sure which will work. Soon you realize which the coins that can assure you better returns are.