Bitcoin trading is getting its popularity day by day. In today’s cryptocurrency market, the most famous digital currency is bitcoin. Bitcoin trading is much more profitable than any other digital currency trading which makes the investors more interested to invest their funds through the bitcoin trading market.
Hence, if you are considering yourself to join the bitcoin trading market. All you have to learn every detail about the bitcoin trading strategy to get maximum profit from every trading. While there are multiple bitcoin trading methods available, but at the beginning, you need a clear concept about the basic techniques to succeed.
We hope this detailed information will help every user who just has started to invest in the Bitcoin trading market.
Here in this article, we will discuss 4 basic different strategies of bitcoin trading.
Probably the most outstanding basic bitcoin trading strategy commonly known as HODLing.
The term HODLing was first coined in 2013 on the Bitcointalk forum when a new bitcoin user has misspelled the word holding to specify he would not be leaving his position. The concept that lies in that statement became a strategy that revolves around retaining a long position on bitcoin and hope that the price will rise again so you can trade with huge profits. It’s not a methodical strategy but it can be the best suggestion for new traders.
People who are already in the market of bitcoin trading might consider hedging their bitcoin risk for some time. This only can happen if the traders are confident about the volatile nature of the trading market. Hedging is the process of unlocking strategic exchanges to reduce the risk to existing positions.
In this strategy, you would fluctuate an existing holding by opening a position to short bitcoin, which implicates auctioning the asset for the recent market price in the expectation it will decrease. If the market price will get low then purchase it back for the lower price and gain money from the difference. This means that any loss to your actual bitcoin holding would be equalized by the earnings to your short bitcoin exchange.
- Trend Trading:
This trading strategy is applicable for different timeframes, as practically you carry your position open for a long time as you believe the trend will continue. In this case, there is no time limit, whether this is hours, days or it can take weeks or even months.
For that purpose, you can use a specialized calculation to help make a more accurate guess. Trend pursuing strategies use technical analysis to indicate the direction of market speed. Trend trading strategy involves making a position when you are confident about the concept that the bitcoin cost will continue to change in its existing direction or is nearly to set a new trend.
Some of the indicators in technical analysis involve relative strength index and moving averages after a regular time interval. Trend trading strategy is less risky than any other strategy of bitcoin trading.
- Breakout Strategy:
Breakout trading strategy involves joining the market as soon as the trend begins, prepared for the bitcoin value to break out from the earlier range. The appropriate time to start this trading when a market breaks through a resistance level and prominent volatility will start. Experienced traders have always prepared for such time. They keep tracking every market move to join the market at these key points to run the trend from beginning to end.
Hence open a bitcoin account and start Bitcoin Trading.
We hope you have learned the basic Bitcoin trading strategy that’ll make you rich at any minute.