Watch out for Scammers
With no central exchange and little regulation in place, the bitcoin market is, unfortunately, an ideal environment for scammers. Fake exchanges and wallets are common, as are phishing scams where fraudulent emails direct you to scam sites identical to the platforms you use to capture sensitive data. Ponzi schemes, which work on...
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Get a Handle on Your Emotions
Alongside bitcoin trading tips involving risk management and strategy, there are also emotional factors that you need to be aware of, most notably, the fear of missing out (FOMO). Due to bitcoin’s extreme volatility, it is not unusual to see dramatic price spikes in a very short space of time...
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Buy and Hold Bitcoin
As discussed earlier, there are several types of bitcoin trading strategies. The buy and hold approach is a passive strategy where positions are held anywhere from weeks to years. There are multiple benefits to this: Buying and holding bitcoin allows you to bypass its short-term volatility. It’s not unusual to see significant...
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Diversify With Different Cryptocurrencies
The most important bitcoin trading tips are those that focus on mitigating risk, and diversifying your portfolio is one such tip. Too many first-time traders develop an obsession with bitcoin’s potential and fail to address its downfalls. By trading in other cryptocurrencies, you hedge your investments. If one falls in value,...
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Use Leverage With Extreme Caution
Leverage enables you to hold a much higher stake in a trade than the actual capital in your account would otherwise allow. Though this may seem appealing, and can indeed lend itself to significant profit, it can also lead to huge losses if a leveraged trade was to turn against...
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Be Strict With Profit Targets and Stop-Loss Orders
As mentioned, bitcoin is unpredictably volatile, more so than any other financial instrument, so it’s vital to have a plan and stick to it. Before opening a position, consider what level of profit you would be happy to take from the trade, what losses you can afford to shoulder,...
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Decide on a Trading Strategy
Before you even think about opening a position, you should put careful thought into the type of trader you want to be. This will depend largely on the amount of time you have to commit to trading activity and market analysis, and how quickly you’re looking to turn a...
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Research the Market
The only sure-fire way to become a successful bitcoin trader is to do your homework and get to know the market. This is not a straightforward process as many of the practices used to evaluate other financial markets do not apply to bitcoin. It’s a largely speculative field and...
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Choose a Secure Wallet
Your bitcoin wallet is a holding pen for your digital assets so it’s important to choose wisely to ensure security and ease of access. There are multiple options out there, all with their own features and functionality. For beginner traders, it’s advisable to trade through a reputable broker, such as Coinbase, and use...
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Start out Small
The first of our bitcoin trading tips is to proceed with caution and start with a relatively small investment. Although it’s an exciting market with a reputation for making the lucky few substantial profits in a short time frame, it is by no means easy to trade bitcoin, and...
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