If you wish to start trading in Bitcoins from 2020 there are some ways to go about it. While cryptocurrencies may have changed the fortunes for many investors there is no short-cut to making money. To make successful trades it is imperative for the trader to learn about things like fundamental and technical analysis, analyze price charts, monitor price movements, etc.
How to start trading Bitcoins:
Methods you can use for trading: You can trade Bitcoins using a variety of methods like day trading, swing trading, scalping, passive trading, etc depending on what you wish to get back from your investments and the amount of time that you can afford to spend for trading activities. Besides, automated trading is gaining popularity due to innovative trading platforms like immediate bitcoin plattform.
- Day trading allows traders to start and finish their trades by the end of a day. This trading strategy is best suited for traders keen to exploit the short-term profit making opportunities that arise because of some emerging patterns or developing news.
- Swing trading lets traders catch the key trends in price swings and hold onto these until the trend reverses. The strategy is perfect for traders keen to exploit the market momentum.
- Scalping allows Bitcoin trade first-timers to make multiple intra-day trades focusing on small price movements. So, this trade strategy benefits a trader who wishes to make small gains instead of waiting for a big one.
- Passive trading is for the long-term holder of Bitcoins or someone who is keen to enter the crypto space and dabble in crypto trades. This classic strategy makes you wait for prices to fall to a specific level after which you can buy in the coins. You then wait for prices to go up again and buy them out.
Types of Analysis That Traders Must Do:
When trading, newcomers must use either technical or fundamental analysis.
- In fundamental analysis, you will view the bigger picture rather than focusing on price movements. So, you will consider developer activities around the coin, the coin’s mainstream integration, etc. It is important to keep yourself updated with current happenings around you to do fundamental analysis.
- In technical analysis, you can predict the future prices or movements or cryptocurrency pairs using specific tools. It is a dynamic approach that lets you gain a deep insight into a coin. The main idea behind this is that price movements will dictate your analysis, regardless of whatever may be happening around you.
What New Traders Must Not Do?
If you want to start Bitcoin trading in 2020 you need to understand that you cannot let emotions decide trades for you. The fear of missing out on trade opportunities often makes traders overtrade. This can be dangerous particularly if you do not have enough money to throw away. Another common mistake newcomers make is to blind trade or trade without any plan or strategy in place. You need to take time out to do research on the crypto assets that interest you and trade strategies that could benefit you. Besides fear, greed is another emotion that investors fall a prey to. While fear causes you to make investments when you are not adequately prepared for them or exit trades prematurely, greed makes you have blind faith in a certain asset that may bring you huge losses eventually. Regardless of whether you are a beginner or an experienced Bitcoin trader, to trade well this year, you must learn from past mistakes. You must also never keep your coins on an exchange as these are prone to hacking, and you may lose everything in the process.