This article was originally posted on The Bitcoin News - a trusted site covering numerous topics related to Bitcoin since 2012.
Because it’s high time you got on that train.
Bitcoin trading is not for the faint of heart. A statement that gets tossed around fairly often. Novice traders should not apply. These things are heard throughout bitcoin and altcoin communities, and because of them- a lot of people have missed out on a lot of profit.
In 2017, bitcoin was in almost every headline, splashed against every front page. Millions were made overnight. To think that each and every one of these investors knew what they were doing is indeed short-sighted. If not laughable. As the markets develop, so do trading platforms, options, and styles. Which can actually serve to make it a new man’s game.
Unfortunately, (or fortunately, depending on which view you have) being a seasoned trader can actually serve to cause quite a few problems for an investor. Relying on tactics and habits that may serve you well in other markets, will most definitely not work with bitcoin. Bitcoin trading platforms, like https://bitvavo.com/en/bitcoin, can be a godsend for new and seasoned investors alike, but what really makes a difference is all in how you play the game, not necessarily who you play it with.
1. Create clear targets, and don’t stray from them
Make sure that you set a clear target for buying and selling. While bitcoin has shown, time and time again, that it is a sure thing- it has yet to help stifle the incredible volatility within the market. When trading with bitcoin, have a clear idea of when you plan on letting that coin go. Getting greedy and waiting for the coin to hit the absolute max, you may just be setting yourself up for selling during a dump.
Bitcoin can change the value in the extreme, within just a matter of hours. A 2-3% loss on NASDAQ is considered some pretty extreme fluctuation. Where it’s not unusual to see bitcoin pump or dump by upwards of 80% in just a matter of hours. Don’t continue to hold out once you’ve hit your target, even if the price still seems to be climbing. Going for small, short-term and relatable gains will get you farther than risky business ever will.
2. Choose a platform designed with you in mind
If you’re a new investor, a trading platform is a must. As a seasoned bitcoin investor, it’s not unheard of to juggle several trading platforms all at once. This offers the investor quite a few advantages. Choosing a good exchange platform that offers tools like portfolio management, fiat to crypto purchases, and live, multi-coin information can help a novice investor learn market trends and behavior, from a safer position.
Choosing to have at least two crypto-wallets, a “hot wallet” and cold storage, is perhaps the most important thing any bitcoin trader can do. Some platforms will offer both wallets within one streamlined and easily navigable system. Hot wallets are ones that are connected to the internet. This is where any savvy trader keeps the amount of bitcoin that they are willing to trade- and lose. Cold storage refers to offline accounts, in which the bitcoin is stored, but cannot be readily traded.
3. Understand the market
What makes the bitcoin market so delightfully volatile is two-fold. The decentralization of markets coupled with the finite resource can give investors a better idea of inflation rates and market trends. Decentralization offers investors the ability to trade without the artificial inflation of the middlemen. This means that there is no go-between within a bitcoin market that can arbitrarily adjust price based on futures or predictions. However, without this centralization, there is also an obvious lack of oversight. Meaning that market trends can be swayed greatly by “whales”. Whales are the top tier of bitcoin investors, holding a vast majority of the bitcoin in existence.
The finite amount of bitcoin in existence makes the market predictions that much more reliable. Knowing exactly how much bitcoin is in circulation, how much bitcoin exists, and how much bitcoin will exist can help to give investors an idea of how supply and demand may move around market values.
4. Don’t let your ego override your coin
This is perhaps where most seasoned investors go wrong. The habits they have formed that have become reliable to them in other markets, rarely apply in the same way to bitcoin. Don’t rely on standard news sources to try and get an inside track on bitcoin. Even less “credible” trading news sources like Reddit and twitter can serve to make an investor question what they’re seeing. So much of the traditional press is running off of the hard bias of larger corporations. Other traders are thrilled to naysay and become your standard troll.
Don’t listen to these outside sources. Stick to your guns and your plan. Outside sources will generally give you two things: a false sense of security, or a false sense of doubt. Learn your trends by watching them happen in real-time. Don’t jump on pump trends just to make sure you’re holding the coin of the hour. Bide your time, and the coin you have. Buy low, and don’t worry about what anyone else is saying.
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Post source: Tips for Bitcoin Trading Like a Pro