Bitcoin is one of the trending currencies in the crypto market. As per the recent statistics for 2023, a total of 420 million users in the world use or own cryptocurrencies. The global crypto market cap as of October 2023 is $1.1 trillion.
You may wonder why strategies are required for any investment. It is a simple theory: when you invest, you get some fixed returns. However, the case is not the same here. In crypto trading, forex trading, stock trading, and commodities trading, you must and should follow a set of theories. But why? Because strategies play a vital role in creating an outline of your plan, give it a structure for what your next action will be based on market sentiments and trends.
In this blog, we will be discussing improving your game with the help of pro strategies for Bitcoin trading.
How to start trading in Bitcoin?
Here are some steps that you can follow to start trading in Bitcoin:
Register on cryptocurrency exchange platform
Look for a digital asset exchange that allows trading in Bitcoin options. Make sure you only register with reliable information.
Try your hand at option trading with a demo account
The exchange platform you have registered on should ideally offer a demo trading account so you may begin trading Bitcoin options without risking any real money. In this manner, you can get used to how the Greeks’ options affect Bitcoin trading strategies.
Examine the Bitcoin market
It is essential to examine the crypto market so that you can efficiently pick up your trading strategy that influences your risk and return profile as well as the volatility of bitcoin prices. If you really want to crack profitable deals, you should research more about the bitcoin market and options availability.
Execute your initial Bitcoin options transaction
You can make your first trade if you are confident with Bitcoin options and how they operate. However, don’t play hastily. As mentioned, without strategies, there is only luck, and never mind that luck won’t work every time. So, first strategize, then move forward.
What are the best strategies to master bitcoin trading?
Have a look to ensure that you will become professional with the help of these strategies-
Day Trading
This strategy is also known as intraday trading, where trading opens and closes on the same day. In this strategy, the trader’s goal is to make profits by understanding the fluctuations in the market. In this way, buying and selling would be a tricky business. Initially, novices may find it challenging, but with experience, they will become professionals.
Range Trading
Market participants also rely on knowledgeable analysts, who provide daily levels of support and resistance. A resistance level is a price that is higher than the present price, since “resistance” alludes to the limit to which the price may increase. A support level, on the other hand, is always below the present price since it is a level below which the price of a cryptocurrency is not expected to fall.
Scalping
Increasing trade volumes is a key component of this trading technique to book profit. Even though trading entails danger, a savvy trader pays attention to margin requirements and other crucial guidelines to steer clear of negative trading experiences. Scalpers determine an entrance and exit point within a day by analysing historical trends, volumes, and cryptocurrency assets.
High-frequency trading(HFT)
Quant traders employ a type of algorithmic trading approach called HFT. This entails creating trading bots and algorithms that facilitate fast entry and exit into cryptocurrency assets. Creating such bots requires a solid foundation in computer science and mathematics as well as an awareness of intricate market concepts. As a result, experienced traders would benefit more from it than novices.
Dollar-to-Cost Averaging
It is wise to believe that market timing is nearly impossible when it comes to determining the ideal entry and exit points in a cryptocurrency market. Thus, “Dollar Cost Averaging” (DCA) is a sensible approach for investing in cryptocurrencies. Investing a sum of money on a regular basis is referred to as DCA. By using this method, investors can avoid the difficult task of market timing, which focuses on long-term wealth growth.
The exit strategy, nevertheless, could also be challenging in the DCA approach. It necessitates knowledge of the market cycle and trend analysis. Analyzing technical charts can also assist you in timing your exit.
Create a well-balanced portfolio
The world of cryptocurrency trading is still developing. While trading in cryptocurrencies is welcomed in several nations, some remain dubious. Since central banks all around the world are trying to find better ways to control virtual currencies, trading them is frequently fraught with danger. Nonetheless, there are methods available to assist investors in avoiding excessive volatility. To combat volatility, a well-balanced cryptocurrency portfolio will help to some extent. You can comprise this portfolio with coins like Dogecoin, Ethereum, and Bitcoin.
Additionally, investors have the option to consistently invest a set amount in several cryptocurrencies. In the long run, this will help your portfolio generate favorable results by methodically raising your risk appetite.
Arbitrage
The practice of purchasing cryptocurrency in one market and selling it in another is known as arbitrage. “Spread” refers to the variation in price between the buy and sell prices. Due to variations in trading volume and liquidity, traders may be able to book a profit. You must open accounts on exchanges where there is a significant price differential for the cryptocurrency you are trading at in order to take advantage of this opportunity.
Conclusion
We hope that this post will help you thrive in not just Bitcoin but on other trading platforms as well. The crypto market has a lot of scope, and if you are confident and consistent, then there is no going back. You can book profit without fail, but trading is all about taking risks and achieving consistent performance. Do not bother about the outcome; your excellence will make you a pro trader someday.