As a Bitcoin investor you will be keen to know ways by which you can make more profits. You can find these tips and advice on various websites posted by experts who have understood what works for Bitcoin trades and what does not. So, as a Bitcoin trader, you can find these following golden rules rather helpful:
- Start Small: To begin with, you must be ready to start trading using small amounts in order to keep risks at the bare minimum. So, your job is to first research well and understand the crypto market before investing a big chunk of your savings into any coin. The crypto market is known to be highly volatile and predicting price movements is hard. There can be significant gains or losses in a single day itself. So, you cannot let fear or greed dictate your decisions; you should only invest small to prevent colossal losses.
- Buy Low: This is obviously an age-old trick that can help you make good profits on every trade. However, according to Barclay’s research centering on the cycle of investors emotions, this decision to buy at low prices and sell when prices are high tend to become more and more difficult with time. This is why you need to set profit and loss limits that will guide you on when to buy coins, when to hold them, and when to sell them off.
- Identifying P & D: It is important to be able to identify the pumps and dumps. Since exchanges are not under the control of any government, it is simple for the key players to manipulate prices. These players buyout liquidity rapidly and when small traders make an entry into the market, they start selling these at premium prices. But, you must understand that every price surge is not always the result of pumps and dump.
- Trade/Hodl: You have to be able to distinguish between trading and hodling/investing. In trading you have to buy and sell crypto coins at regular intervals to make profits, but in investing you accumulate profits over time by holding onto your assets. To earn more profits through Bitcoin trading, it is wise to balance your portfolio by investing in the more stable assets and trading with lesser-known ones. Using trading bots like bitcoin era quickens the trade and it is easy for even beginners to use the bots.
- Follow Major Events: This strategy is important because Bitcoin prices are largely influenced by key political events. In the past, such events have led to incredible price rises and falls.
- Read Analysis: A golden rule of making bigger profits through Bitcoin trading is to follow technical analysis. Since cryptocurrencies are distanced from real-world apps, you will not find a lot of data on the technology involved, the balance sheets or sales figures. Doing fundamental analysis is difficult to understand whether an asset is under-priced or overpriced. This is why you must do your own technical analysis on the basis of past market data.
No Overtrading: You have to stay away from overtrading because this will come in the way of your profits. At times, trading volumes are not satisfactory to move prices up or down, and this can be a cause for anxiety. During these times, traders tend to overtrade and take wrong decisions that lead to losses. You must only place orders when the market has ample liquidity.