Home / Blog / The Best Bitcoin Trading Strategies (That Still Work in 2020) – Bitcoin Magazine

The Best Bitcoin Trading Strategies (That Still Work in 2020) – Bitcoin Magazine

The Best Bitcoin Trading Strategies (That Still Work in 2020) – Bitcoin Magazine

This is a sponsored article supplied by NordikCoin.

Bitcoin buying and selling has by no means been extra fashionable than it’s now, and the market doesn’t present any indicators of slowing down. So, for those who’ve thought of getting in on the motion, now could be the time to strike.

While there are quite a few bitcoin buying and selling instruments accessible, you continue to want an understanding of the essential methods to succeed.

We’ve created this information to introduce newcomers to a number of the most typical buying and selling methods. But seasoned merchants might also want to refresh their recollections and undertake new methods for 2020.

Here’s what we’ll cowl in this buying and selling technique information:

  • HODling
  • Hedging
  • Trend buying and selling
  • Breakout buying and selling

If you’re desperate to get began, then we propose you head over to NordikCoin and create an account now. It solely takes a couple of minutes, and then you definately’re prepared to purchase and promote bitcoin.

1. HODLing

The time period “HODL” was coined on the Bitcointalk discussion board again in 2013. It’s not an acronym for a fancy buying and selling technique — it’s merely the phrase “hold” misspelled. The creator of the unique submit mused that merchants who had been new to the sport or not sure of their buying and selling abilities had been higher off HODLing their bitcoin in a bear market.

Back in 2013, bitcoin noticed a surge from lower than $15 per BTC to over $1,000 towards the tip of the identical 12 months. The time period “HODL” has appeared in quite a few cryptocurrency memes and is now a widely-recognized buying and selling technique.

The premise is easy: Hold onto your bitcoin and hope that the value will surge once more so you possibly can promote with large positive factors. It’s not a really elaborate buying and selling technique, however it may be sound recommendation for brand new merchants.

It’s value noting, nonetheless, that the bitcoin worth might additionally dip as an alternative of rising. That’s why we advise you to have a plan for threat administration in place for those who select to go this route.

2. Hedging

Ever heard of the time period “hedge your bets”? That’s precisely what this buying and selling technique is all about.

Since bitcoin is unstable, there’s at all times an opportunity that you simply’ll lose cash on trades in the quick time period. That’s why it may be a good suggestion to hedge your bets by opening a commerce that’ll mitigate that threat.

There are a number of methods to go about that.

You can short-sell, which suggests you promote your bitcoin with the expectation that the value will go down so you should purchase it again at a decrease price. Many merchants will borrow bitcoin from a dealer, commerce it on an alternate after which return the quantity they borrowed.

But that may be dangerous if the value goes up as an alternative of down.

You can even hedge with contracts for distinction (CFDs), that are derivatives moderately than precise cryptocurrency. In that case, you’ll maintain your bitcoin in the hopes that the value will go up in the long term, however open a CFD that bets on the value falling. Whether the value truly goes up or down, your acquire on bitcoin or the CFD will offset the loss on the opposite.

Finally, you possibly can hedge your bets with bitcoin futures. These are contracts between two events who comply with commerce bitcoin at a sure worth on a selected future date. Whether the value of bitcoin has gone up or down on that date, you’ll make the commerce and take both the win or the loss.

three. Trend Trading

Trend buying and selling is a method that depends on the present developments in the Bitcoin world. You’ll have to hold an in depth eye on what others are speaking about and plan to do.

For instance, bitcoin grew to become extremely fashionable in 2017, when the value rose to nearly $20,000 per BTC. There had been many causes for that, however the primary one was that bitcoin acquired a whole lot of publicity. That meant extra individuals wished to get in on the motion, which elevated demand — and thus elevated the worth of bitcoin.

You can interact in development buying and selling over any time period, whether or not that’s days, weeks, months or years.

You simply have to have an concept of what is going to occur subsequent.

For that goal, you should utilize technical evaluation to assist make an informed guess. Some of the indications in technical evaluation embody relative power index (RSI) and transferring averages over time.

Although development buying and selling can appear much less dangerous than different methods, it’s value remembering that there are a whole lot, if not 1000’s, of factors that affect the value of bitcoin. These embody companies adopting bitcoin, different cryptocurrencies coming into the market and governments implementing new buying and selling laws.

four. Breakout Trading

Breakout buying and selling is much like development buying and selling; the distinction is that you simply purpose to purchase or promote bitcoin firstly or finish of a development.

You want to know assist and resistance ranges, that are sometimes called the ground (assist) of the bitcoin worth graph and the ceiling (resistance). In different phrases, these are the value factors bitcoin gained’t drop under or rise above.

The factors at which these ranges are damaged both upward or downward are referred to as “the breakout points.” Once this occurs, you possibly can often count on the value to turn into very unstable. 

Again, the trick is to accurately anticipate what is going to occur subsequent.

If you’re ready to try this, then you may make some actually good offers. There are other ways to determine the assist and resistance ranges, together with to take a look at quantity ranges, RSI or the transferring common. Once you realize that, you possibly can create an order to purchase or promote at a selected worth level that is smart.

As with the opposite three methods we’ve lined, breakout buying and selling isn’t with out threat. So though you’re capable of create an automated purchase or promote order, it’s clever to maintain an in depth eye in the marketplace actions moderately than to stay passive.

What to Know Before You Trade Bitcoin

Before you dive headfirst into bitcoin buying and selling, there are some final factors we have to contact on. As talked about, it’s simple to get began with bitcoin however not as simple to turn into a grasp of the artwork.

1. Research Your Chosen Trading Strategy

There is extra to every of the 4 buying and selling methods than we’ve lined in this information. Make positive that you simply do correct analysis earlier than you decide to any of them.

Fortunately, there are many assets on-line, together with e-books, e-courses and movies that can educate you tips on how to commerce bitcoin.

Just do not forget that not one of the methods, no matter how fashionable they’re, come with out threat.

2. Create A Bitcoin Trading Plan

Once you realize which technique you need to pursue, you must create a buying and selling plan. Just like another enterprise enterprise, it’s necessary to have your standards for fulfillment and failure in place.

Without a plan, you may turn into the sufferer of your personal greed for extra or worry of dropping. The plan ought to embody real looking objectives for a way a lot you hope to make and a threat profile that features how a lot you’re keen to take a position or lose.

three. Make Sure You Mitigate Any Risks

We’ve talked about threat a number of instances now, and there’s a very good purpose for that.

All commerce, whether or not it’s inventory buying and selling or bitcoin buying and selling, includes a sure factor of threat. One of the primary threat elements in bitcoin buying and selling is the volatility of the bitcoin worth.

One of the methods you possibly can mitigate threat is to place limit-close and stop-loss orders in place. That approach, you possibly can safe any income or restrict any losses earlier than the market will get out of hand.

four. Find A Safe and Reliable Bitcoin Exchange

Finally, you must rigorously think about your choices relating to bitcoin exchanges. Not all exchanges are equally quick and protected to make use of, so we advocate you do your analysis.

NordikCoin is a handy and safe bitcoin alternate. We allow you to purchase and promote inside minutes so that you don’t lose out on a very good alternative.

At the identical time, we take nice care to guard your bitcoin. We use a multi-signature and chilly storage resolution to forestall unauthorized entry to your funds.

Ready to Make a Killing in 2020?

We hope you’ve discovered a Bitcoin buying and selling technique that’ll make you wealthy in the brand new 12 months. The 4 approaches we’ve lined are all tried and examined. But keep in mind to do some additional analysis, and don’t be afraid to attain out to us at NordikCoin for those who want some additional recommendation on tips on how to open an account.

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