Bitcoin gained quite a lot of popularity in 2017 and, since then, consumer traders, as well as institutional investors, have become heavily interested in it. A combination of fast transaction speeds, low fees and an increasing value combine with many other factors to make bitcoin an attractive investment. Read on to find out some useful tips for the Bitcoin Trader System.
1. Master Technical Analysis
Bitcoin isn’t like other asset classes out there. That makes it something of an outlier. There isn’t a central bank or some kind of a governing body or single person that can influence the valuation of bitcoin. The pricing model for this currency is dependent upon the speculation of the market participants and isn’t too obedient of traditional financial theory.
Some might see this as a disadvantage of bitcoin. You, however, should take it as an opportunity. It means that in bitcoin, more than in any other market, price action and technical analysis are the most accurate ways to read the market. That is why you should understand the basics of technical analysis before getting involved in the markets.
In many ways, price action is the only dependable way to get an active pulse on how the bitcoin market is faring. Because of the lack of the necessary market fundamentals, it can be somewhat challenging to read the price action and interpret charts or indicators. However, if you have a good grasp of how these things work, you won’t need any market fundamentals to be able to apply them to the bitcoin price charts and will still be able to give correct guesses about the future direction of the market. At any rate, the important thing is that you have to become perfect at technical analysis before you can become perfect at the bitcoin markets.
2. Adopt a Sustainable Pace
With the rapid pace of the bitcoin market itself, it’s important that you adopt a sustainable pace for yourself among all the chaos. A sustainable pace ensures you enter the market to stay for the long haul. If you devote extremely long hours to the bitcoin markets, which never sleep, then you will suffer from burnout that, in turn, leads to a below average performance.
No one can trade for 24 hours a day, seven days a week and you need to remember that. What you need to do is set a manageable schedule. Find out what your best times to trade are and concentrate on trading during those times only.
3. Always Be Alert About News Items
One of the things that make bitcoin so unpredictable is the fact that you can never predict the kind of impact news items will have on the market. Additionally, there aren’t any scheduled news releases, like in other markets. There isn’t a world agricultural supply and demand estimates (WASDE) or EIA inventory report or even regular gross domestic product (GDP) releases for bitcoin.
Despite that, there are always unexpected news items that can have large impacts on the bitcoin markets, such as news of when China announced a ban on cryptocurrency exchanges in 2017. You should be ready and on the lookout for such news.
If you’re going to be trading bitcoin, then get yourself some access to a good source of live news. Always have a finger on the pulse of the global crypto landscape as you trade.
4. Implement Stop Losses
Bitcoin markets tend to be volatile consistently. This is good for active traders since it gives them various opportunities to make high-risk, high return trades. However, it also poses a threat for those who want to avoid the very high-risk trades.
It doesn’t matter what kind of trade you’re engaging in — you will have to prepare yourself for losses now and then. Trading isn’t about never losing. It’s about winning more than you lose. To make that possible, you need to use a stop loss strategy to limit your losses.