I don’t want to spark the protracted debate on whether BTC is a currency or a commodity. Though most people strongly believe that it should be regarded as both a currency and a commodity. Either way, the BTC price is volatile and its market full of uncertainties. While this can be misjudged as very risky, it presents a great opportunity for investors to make a profit by trading the coin.
The art of Bitcoin trading
I have read several articles about BTC trading which just left more confused than assisted. So I am going to explain it here in the simplest way possible. So let’s say, you purchase BTC at a given price, and then go ahead and sell it at a higher price, you incur a profit.
However, there are times that you are not so lucky and the price goes down. During such a time you will find yourself between a rock and a hard place, having to decide whether to sell your coins at a loss or to hold on to them in the hope that the price will rise again and you’ll make a profit. The tricky part is that while holding on to these coins, you risk higher losses if the price continues to drop.
Types of traders
There are two major players in the BTC trading game. The short-term trader or the long term trader. Your trading period determines whether you are a long term trader or a short term trader.
• Long term traders
They study BTC [rice trends over a long period, this influences their decision to either buy or hold BTC with the hope of making profits.
• Short term traders
They analyze the intraday behavior of BTC prices and seek to take advantage of the swings in price. These traders thrive in market volatility a factor that is presently characteristic of BTC.
BTC is safer to invest now than it was during its onset years. It is because its adoption has grown and it has become more stable. BTC price volatility has also reduced considerably.
If you play your cards right, BTC trading can be extremely profitable. It all depends on the market pattern. BTC prices rise and fall dramatically throughout each trading day. Here are a few rules to observe if you want to incur greater profits.
1. Never put all your eggs in one basket. Break your capital into several small lots for multiple positions at different price levels.
2. Only invest what you can stand to lose. Don’t invest your life savings or money that change your life drastically in the event of a loss. I can’t stress enough how uncertain the BTC market is.
3. Embrace current technology so as to maximize profit.
4. Continuously study and understand the market. Give this part your all, as trading requires deep concentration and effort. Conduct a lot of research and be up to date with current trends.
5. Stay professional, focused, unemotional and always know when to cash in.
6. Celebrate your losses but minimize them. There is no win without a loss, what I mean is losing just like winning is an integral part of trading. It is the cumulative gains that count.
You are going to make a few losses, that I know for sure. But with the above tips, I can assure you that you will enjoy more profit than loss.