Strategies for Trading Bitcoin in 2021
Almost everybody that uses the internet knows about Bitcoin trading. And, the Bitcoin market doesn't seem like it will slow down any time soon. So, if you're yet to venture into Bitcoin trading, you need to consider making a move.
Currently, even new Bitcoin traders have many tools for making their work easier. But, understanding the basic Bitcoin trading strategies can make a difference. Platforms like bitqt-app.com make trading cryptocurrencies easy, even for individuals without experience.
This article shares the top Bitcoin strategies that will enhance your chances of profiting from your crypto trading activity. Here are the leading Bitcoin trading strategies that have been proven effective by successful crypto traders.
This strategy got its name from a Bitcoin forum when a participant misspelled the word Holding. As such, HODL is an acronym for HOLD. With this strategy, you purchase and hold Bitcoin hoping for an increase in price so that you can sell your cryptocurrency at a higher price. Although this is trading strategy is not elaborate, it's ideal for new traders that are not in a rush to profit from Bitcoin trading.
However, Bitcoin prices can go down very fast instead of rising. Therefore, take your time to study the market and come up with an effective risk management plan. That way, you will know when to sell your Bitcoin instead of waiting until it's too late to make a profit.
Do you know what it means to hedge your bets? If yes, you know what this strategy entails. Bitcoin price is highly volatile. That means you can lose money on short-term trades. Therefore, consider opening a Bitcoin trade to mitigate that risk as a way to hedge your bet.
You can do this through a short-sell. In this case, you sell Bitcoin expecting the price to go down, after which you can buy later at a low rate. Another approach is to hedge with Contracts for Difference. In this case, you hold Bitcoin, hoping the price will rise in the long run, and then open a CFD that will bet on the currently falling price. But, whether the price goes down or up, the gain on the CFD or Bitcoin will offset your loss.
You can also use Bitcoin features to hedge your bets. And this is where you agree with another party to trade your Bitcoin at a specific price on a certain future date. Thus, the trade goes on either with a loss or a win whether Bitcoin price goes up or down.
This Bitcoin trading strategy depends on the current trends of this cryptocurrency. This strategy requires a trader to pay attention to what other traders and industry players are saying. Essentially, your Bitcoin trading activity is guided by what happens in the market.
For instance, Bitcoin's popularity increased in 2017. At this time, its price rose to around $20,000 per Bitcoin. And this was partly because of the increased publicity accorded this cryptocurrency by most media outlets. If you choose this strategy, you must monitor industry trends to determine the best move to make.
This strategy is almost the same with trend trading. However, you aim to sell or buy Bitcoin at the end or beginning of a trend. It would help if you understood resistance and support levels to use this strategy effectively. In simple terms, you should note the Bitcoin price points that won't rise or drop.
These are the leading Bitcoin trading strategies. Their implementation varies, and it can influence the profitability of your venture. Study each of these strategies carefully to determine what will work best for you.
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