There is no doubt that 2017 has been the best year for the bitcoin market and the investors. The sudden explosion of its popularity and demand has created a global buzz among the investors, consumers and the traders. Banking systems are not only expensive but slow too and that made it the first priority of many users in 2017.
Due to increasing demand for cryptocurrencies, the market became more and more unpredictable. We have seen many sudden rises and fall in the value of bitcoin. Trading is not a cup of tea but you need a lot of knowledge about the market and full dedication to make some profit. Here are some professional tips that can use to avoid volatility in bitcoin trading.
Technical Analysis is a must
The nature and working of bitcoin make it an outlier. As there is no banking system or company that is controlling the valuation of this currency. Traditional financial theories are not applicable in case of bitcoin investments and trading.
Being good at technical analysis is the first requirement of entering the trading game. The lack of fundamentals of the market can lead you to lose on your investments. Being able to study the ups and downs of the charts is a skill that can save you from big losses.
Adopt a Sustainable Pace
You are not going to profit overnight in bitcoin trading if you are new in the market. Bitcoin trading is a marathon where you have to set your pace. Establishing a long-term strategy can bring you one step closer to successful deals. Try to analyze the best hours to make deals and stick to your plan to see the results.
Implement Stop Losses
Constant volatility is an important attribute of bitcoin trading and active traders and investors are always ready to take advantage of these situations. The pricing charts of bitcoin daily fluctuate between 5 to 10 percent. Most of the investors and traders are always ready to take risks but implementing stop losses in the market in the must.
News items may have no direct impact on the valuation of the bitcoin but you must know about recent events in the market. Stay aware of all the recent updates in the laws about cryptocurrency as a single news item can cause a major fluctuation in the market. Subscribe to any blog or channel that provides daily and authentic bitcoin-related information from all over the globe. Having knowledge about recent events can also help you predict the upcoming trends too.
Use Prudent Leverage
Leverage can be a real booster for your profits but you need to understand that it is a double-edged sword and can also magnify the chances of your loss. Too much leverage can promote reckless management of the money at the end; you will blow up your trading account. Don’t be too much cautious about leverage as it may affect your performance so maintaining the balance is the real trick in this bitcoin trading game.