Bitcoin continues to be the most popular instrument for traders dealing in cryptocurrencies. So, it is understandable if Bitcoin is the path you choose as a beginner. However, trading in bitcoin is a lot different than any other form of trading in terms of strategies, risk factors, predictability, and more. If you feel a little overwhelmed when you start off in the arena, you are not the only one feeling this way. So, here are a few tips to help you out.
Take small leaps
The first tip to remember is to go ahead with caution and begin with smaller investments. Though it is a pretty exciting market that can help you make good profits in a short time, there is still a risk factor involved in it.
Generally, cryptocurrencies are highly volatile. So, it is better not to enter all guns blazing as a beginner. For assured profits, go for small-stake trades to get a grip on the market with the minimum risk.
Select a secured wallet
Think of your bitcoin wallet as the holding coop for digital assets. Thus, it is crucial to select wisely to make sure that you get the ease of access and heightened security.
Particularly for beginners, it is better to choose a reputable broker, such as Bitcoin Profit, and rely on the wallet the platform offers. Now, there are two kinds of wallets for you to choose between – hot wallet and cold wallet.
- Hot wallets: They remain internet-connected and open to hacking.
- Cold wallets: They store all the assets offline and are typically seen as more secure.
For the beginners holding a smaller amount of bitcoin and wanting instant access, hot wallets suffice if the provider is well-reputed. Then, go for cold wallets when you start holding bitcoins of higher value.
Start researching the market
The surest way to taste success as a bitcoin trader is to analyze the market. Now, this isn’t a simple process because most of the practices utilized to assess the financial markets aren’t applicable to bitcoins. By and large, it is a speculative field and global events and news can have unprecedented effects on it.
Thus, it is important to make efforts to broaden your knowledge. Technical analysis is one of the main research skills in this field. So, take your time to read charts and identify patterns before forming a trading strategy.
Strictness with stop-loss orders and profit targets
As mentioned before, bitcoin is unpredictable and volatile – more than all other financial instruments. So, you need to have a plan that you stick to. Before you open a position, think about the amount of profit that would make it a good trade for you. How much can you afford to lose? Then, set the target and stop-loss level right from there. Be strict with your targets to minimize risks.
So, keep these tips in mind as you start bitcoin trading and you will see that things will get a lot easier for you. And all the best for your trading journey!
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