Bitcoin trading can be a bit challenging at first, especially since most of the trading is done online. There are a huge number of people who are trading online that do not have experience and they end up making mistakes which can cost them. Bitcoin Code is a contributor of the mistakes that people make because they tend to believe that they can earn thousands of dollars in a day of trading. To avoid falling for such tricks, here are five simple tips you need to have on hand if you are looking to trade bitcoin online.
1. Determine How Much You Want to Trade With
This is the most important thing; before you start trading, you need to determine how much money you want to set aside for trading. This is because just like any other financial investment, there are losses and profit. You must be ready to come to terms with the fact that in case of a loss, you may lose the amount you set aside for trading.
2. Set a Trading Goal
Trading bitcoin is no different from stock trading and that’s why you need a trading goal. The purpose of setting a goal is so you can remain focused during the period of high volatility. The other reason why you may need to have a bitcoin trading goal is so that you do not make any financial decision based on your emotions. Having goals will prevent you as a trader from either basing your decision on greed or euphoria, which can at times led to massive losses.
3. Learn How to Interpret Charts
In bitcoin trading there is a tool which is known as Bitcoin Wisdom; this is a charting tool which investors use to understand trading trends. Technical chart analysis may take time but if you are a beginner then you need know the basic of reading and interpreting the chart to determine the time to purchase or sell. Before you start to trade, it’s important to take time to learn the basics of charting. The things which you need to know include: opening price, closing price, highest price, and the trading range.
4. Set a Stop Loss Feature
The stop loss feature is a feature which every bitcoin trader needs to be aware of. This is the automatic trigger which liquidates the amount invested in case there are losses. When the amount invested reduces past a specific point, then the amount is immediately liquidated. It is advisable that one should not set the stop loss very low. This is because bitcoin trading is highly volatile and at times there can be huge losses, and to ensure that you do not lose a lot then set the stop loss at the amount which you are willing to lose.
5. Know When to Leverage
A bitcoin trader must know when and how to leverage. The thing with leverage is that it acts like a double-edged sword, meaning if not used correctly it can lead to losses. In regards to leverage, it’s important to determine the level you can manage. This is because too little leverage can hinder performance and too much leverage may lead to losses.
