Bitcoin trading seems to be all the rage these days, and with the current value of the cryptocurrency soaring high, it’s easy to see why. However, whether you’re a new or seasoned investor in Bitcoin or any other traditional forms of wealth for that matter, you need to be systematic and have a strategy.
It is no secret that cryptocurrency is a highly volatile market, which makes it all the more reason for those who are new to Bitcoin trading to find the most efficient strategy possible. Keeping that in mind, the following is going to be a guide on the best Bitcoin trading strategy for beginners.
1. Follow the news
What we’ve learned from Bitcoin trading over the past few years is that the news matters. While Bitcoin doesn’t normally react to the news on the economic calendar, there are certain news stories that have a lasting impact on the Bitcoin futures. For instance, when a certain billionaire says that they will be investing over a billion dollars in Bitcoin over the next few months, which is likely to get other investors excited and is a good reason to invest in Bitcoin if you haven’t already.
On the other hand, there could be reports of some major investors losing interest in cryptocurrency. If that’s the case, then a news story of a single individual is not likely to move the needle on Bitcoin’s value. The trick for new Bitcoin investors is to keep their finger on the pulse when it comes to Bitcoin-specific news.
2. Take a technical approach
Technical analysis and hard data are always great to have, especially before going into a new market blind. But, new Bitcoin investors need to be careful where they’re getting their information from. For example, while there are plenty of articles and websites that are dedicated to Bitcoin and cryptocurrency trading, not all of these sources can be relied on.
On the other hand, you have reliable Bitcoin trading platforms such as Bitcoin Era, which not only offers their clients a trustworthy platform in which they can trade in Bitcoin but also provides them with multiple resources and technical data that can be used by new investors to make a more informed decision.
3. Spot smart money divergence
The term ‘smart money divergence’ might seem alien to new Bitcoin investors, but it is a great strategy to make sure you’re getting the most out of your Bitcoin investment. So, what is it? For instance, if the price of Ethereum breaks above a resistance point, or swings high, while Bitcoin fails to follow, it’s known as smart money divergence. This means that one of the two cryptos is lying. Luckily for you, there are many guides on support and resistance that new Bitcoin investors can use to make better trading decisions.
4. Know when to hold ’em
The term holding is quite self-explanatory. It means holding on to your investment while the market fluctuates around you. This might seem like an easy strategy to follow, and that’s because it is. However, the temptation to sell when the market is good might be too much for some people.
It’s important to hold on to your investment, especially if you bought low. The recent crashes of Bitcoin and other cryptocurrencies show that holding is a good strategy to follow as it gives you time to assess the market and explore your options. There are many investing websites for trading, but you have to choose the right one and start your trading journey.