Bitcoin trading isn’t for the faint of heart. It’s possible to see Bitcoin values double or drop by 50% within hours or days. However, there are successful Bitcoin traders that make an excellent living.
If you’d like to throw your hat into the ring and try some Bitcoin trading, it’s important to learn all you can about Bitcoins and adopt a Bitcoin trading strategy before making your first trade.
Consider these strategies:
Follow the News
In the short-term, stock and Bitcoin prices are very sensitive to related news.
Negative news regarding Bitcoins, such as government regulation or the hacking of a Bitcoin exchange, tends to drive the price down.
Positive news items, such as a large company announcing the acceptance of Bitcoins as a form of payment or a story about a Bitcoin
Study the Metrics
Many traders believe that the long-term value of Bitcoins can be predicted from the recent price, the number of wallets versus the number of active wallets, trading volume, and so on.
Using this information, traders attempt to assign a current value to a Bitcoin and make trading decisions based upon the current market price.
Use Technical Analysis
Pull out the historical price charts and look for patterns.
Experts claim to have their own formulas for using price and volume data to predict short-term price changes.
It’s likely that human psychology is the biggest component of short-term price changes in the Bitcoin market.
Trade on Margin
If you’re feeling especially confident, there are opportunities to take your trading skills to the next level and trade on margin.
Bitfinex and Huobi are two of the more popular margin trading platforms for Bitcoins.
There are many Bitcoin trading strategies. Like stock strategies, Bitcoin strategies are never a sure thing. A little bit of luck and a lot of skill are required for consistent success. Educate yourself on how the experts are making money and attempt to duplicate their success. Start small and avoid losing large sums of money before you have the necessary experience to be successful.