Top Tips for Trading Bitcoin
With the passage of time, the number of cryptocurrencies that have been created increased rapidly hence the coverage of the instruments turned out to be much complex in the market space.
This concept and complexity make money making more complex and even harder to make cryptocurrencies available for use.
For the beginners, knowing about bitcoin trading is a hard task for sure!
There is a wide range of traditional strategies that can be applied on bitcoin through which you can make money. Here we’ll discuss some tips to start trading bitcoin successfully, Also, make sure to check my complete bitcoin strategies as well!
Start Analyzing Trading Volumes
In the beginning, if you are investing in bitcoin, then it is essential that you analyze its trading volumes. By following the rules, you should always be taking yourself towards the practices that will yield high daily trading volumes regarding Bitcoins. This very major problem with a low volume bitcoin is that it does lack a strong liquidity backing it. Nobody shall want to invest in something having low liquidity in some situations, especially when profits are concerned. So simply wait for the right momentum, high liquidity, and nice volatility thanks to which you can make some nice profits!
Consider Using Sharpe ratio
As you are sure enough that you have narrowed down on bitcoin with the use of high daily trading volumes, you should pay studious attention to the historical price movements.
The best way would be using the financial ratio known as the “Sharpe ratio”. You can quickly find it through online channels, so, you do not have to put in the work of calculations and similar operations. The sharpe rate will be playing an essential role in order to measure the potential return of an asset based on its volatility which in this case would be your Bitcoin.
Keep Yourself Updated on the News
As you have wholly narrowed down with the list, you should look for the one that is considered for having the potential to take-off faster than the rest. For this purpose, you should keep yourself up to date with the news. You should be looking for the crypto news from different sources to stay updated with price moving events.
Search for Entry Points
As you have identified which coins to bring into investment, you should look for the entry point for your investment. Technical analysis has come about to be one of the excellent strategies regarding searching for entry points when investing in financial assets.
If you are looking to buy Bitcoin, then in this condition, for example, bullish engulfing candlestick pattern on the daily or weekly chart (or Pin Bar) can turn out to be the excellent indicator to make your way inside the market. Also, make sure to check my profitable trading strategies.
So, there have been few of the significant and essential tips which you need to keep in mind when you are trading bitcoin. Being the start upholder, making your way in the bitcoin market and earning profits is a hard task to do. I am sure that these helpful tips will make that task easier for you.