Do you wish to engage in Bitcoin trading? If so, follow these crucial steps to ensure successful and profitable Bitcoin trading.
Many individuals and business leaders want to trade Bitcoin but don’t know how to start. Trading Bitcoin is an excellent way to earn money in the crypto world. However, the volatile nature of this digital asset makes trading it risky for some people. Ideally, you can purchase high and sell low, meaning you will lose a significant amount of your money. Nevertheless, you can still make profits if you time the market to purchase Bitcoin at a low cost and sell it when the value increases.
Platforms like ekrona software enable anyone to start trading Bitcoin. Ideally, you can register with this digital platform to buy Bitcoin with fiat money and sell it when its value rises. You only need a crypto wallet where you can send the Bitcoins you don’t intend to sell or trade soon. Here are the steps to follow to ensure successful Bitcoin trading.
Understand What Affects the Bitcoin Price
As hinted, deciding when to purchase or sell Bitcoin will influence your profits. Therefore, understand what influences Bitcoin price before spending your hard-earned money on this digital asset. Such factors include:
- Demand and supply: Bitcoin’s reserve can’t exceed 21 million tokens. Speculating Bitcoin’s market since Satoshi Nakamoto launched it in 2009, miners will eventually produce all the coins. But until then, Bitcoin’s price will continue to rise. Thus, Bitcoin’s limited supply means its price will keep increasing.
- Events: Government interventions, security breaches, macroeconomic announcements, and regulatory changes are some of the events that affect Bitcoin prices negatively or positively.
- Integration: Bitcoin’s demand can increase if its integration increases. For instance, Bitcoin use in payment systems and banking frameworks will increase its price.
Breaking news about Bitcoin and other market factors can also influence its price. Therefore, understanding what affects Bitcoin’s price will enable you to make calculated moves when trading this cryptocurrency.
Expose Yourself to Bitcoin
Acquire maximum exposure to this virtual currency before trading it. For instance, you can start by purchasing a small amount of this digital asset via a crypto exchange. Perhaps, this is a predominant method that most people choose when buying and holding onto their tokens. Ideally, HODLing gives you direct ownership of this digital currency. However, you can eventually sell your Bitcoins when the price increases in the future.
Also, you can trade Bitcoin derivatives. That means speculating on Bitcoin’s price with a contract for difference. With this financial contract, you pay a difference in a settlement price between open and close trades, but you don’t own the Bitcoins. However, most people consider this crypto trading method risky because it’s highly unpredictable with heavy losses or huge profits.
Set Your Limits
Decide on the amount you can invest in this cryptocurrency. For instance, set guaranteed stops that will close the position at your preferred level. That way, you will only pay a fee if the setting triggers the guaranteed stop.
Also, you can set the regular stop that is liable to any slippage. However, the position closes at your set level. A trailing finish is another option, whose bases are market movements that secure profits while limiting your risks. Nevertheless, a trailing stop is also liable to slippage.
Monitor Your Bitcoin Trades
Monitoring your Bitcoin trades is among the essential steps for anyone that wants to earn profits from crypto trading. If you don’t watch your crypto trades, you won’t know when the price rises or falls. Thus, you can miss a lucrative opportunity to sell or buy Bitcoins. Therefore, keep an eye on your trades and technical indicators for a rising or falling price.
In addition to these steps, decide when to close a position to cut loss or generate profits. That way, you can avoid losing your money, whether Bitcoin’s price rises or falls.