How to Build Your Own Bitcoin Trading Strategy
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Whatever you use to trade, be it currencies, shares, Bitcoins, or something else, this is a complicated and risky business. A trader should be aware of the current market conditions and follow any news that is related to the subject of his or her trading. This is why every investor should have his or her own strategy. It may be a complex one with analysis of graphics, diagrams and charts or it may be a simpler one; relying on the latest indicators of the markets performance. However, you should have one.
If you are just beginning to trade and taking your first steps, it’s better to understand the current environment. First, you need to find the most popular and famous Bitcoin exchanges. You should be aware of what fees are charged and which exchange fits your needs best. If you’re in Europe,
Next, there are ways to find this information such as Bitcoin current price, trends, charts, volume of trading, and changes to price. Though you will probably only use one or two exchanges, it’s to your advantage to have others saved into your bookmarks. By comparing details of your Bitcoin exchanges with others, you will be able to make better decisions.
Next, you need to analyze blogs and articles found on famous websites such as or . You need to learn and study day by day. The latest news, the opinions of experienced Bitcoin network specialists, advice from Bitcoin traders and skilled investors. Find the best website with good information and try to analyze it. Don’t expect to become a professional within a few days. You need a period to formulate your own trading approach, one that will work for you to create a profit.
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There are two main strategies of trading. This does not only apply to Bitcoin. It also applies if you trade with other stocks, futures etc. The first is a long-term approach, which is known as ‘buy-and-hold’. This approach suggests that long-term investment is more profitable than a short-term approach. In this case, you should select a good asset to invest in, purchase them, and then hold for a period until the value increases. The second is a short-term technique. It is a little more complicated. You purchase shares, currencies, or bitcoins and hold for a short period before selling them. In this case, a small profit from one transaction can be outweighed by their frequency. Moreover, short-term trading has four different approaches. The first is day trading. The main idea here is that no position should be held overnight, therefore, all transactions are performed and closed on the same day. The second is position trading. Here an investor tries to analyze the trend of an asset and estimate where it is heading. Sometimes this approach can take a few days; sometimes it can be a week or more. It depends on the current market conditions. The third approach is swing trading. This method is used when a trend achieves its peak and becomes volatile; this is the point when profits can be maximized. The last one is a scalping. This approach is performed over the shortest period. Scalping is supposed to create profit out of spreads; therefore, scalping traders are always looking for a liquid market. These are the different approaches in short. For more information you can check out this.
Experience is Your Best Teacher
However, it does not matter how good the information is that you have or what great trading ideas you have created if you do not practice with your own bitcoins or dollars. Yes, experience is the best teacher.
If you are going to start trading, you need to begin with your own real money. If you lose some, you will understand the real cost of each mistake you make. You should begin with small amounts of money, increasing the amount as you continue, according to your progress and achievements. This is exactly what experience means in this case. We do not recommend you invest any amount of money you can not afford to lose. Be careful when making your decisions, analyze the information at hand and do not rely on your emotions. Later, you will be able to develop your own way trading practices.