Oct 23, · Well, a Bitcoin trading strategy is what you’ll use to cover the price of the points you have once you enter the business and once you exit. While this might look confusing for you at the moment, you should understand more once you’ve read our article. So, let’s take a look at the top four Bitcoin trading strategies to use in Aug 11, · MicroStrategy, a Virginia-based business intelligence software company that trades on the NASDAQ, announced on Tuesday it has acquired 21, Bitcoin in . Nov 30, · There are several options for investors to gain exposure to Bitcoin via traditional stock exchange investments. Grayscale Bitcoin Trust is a closed-end fund whose primary asset is Bitcoin.
Bitcoin strategyThe Best Bitcoin Trading Strategy - 5 Easy Steps to Profit
It can be used to trade any of the plus cryptocurrencies available to trade as of today. The first thing you need to get started trading bitcoin is to open a bitcoin wallet. If you do not have a bitcoin wallet then you can open one at the biggest wallet called Coinbase. Bitcoin traders are actively seeking the best possible solutions for trading and investing in bitcoin. We have some of the best methods explained right here in this article. We have learned this bitcoin wisdom by trial and error and we are going to show you what is working right now.
The methods we teach are not dependent on the price of bitcoin. They can be used whether bitcoin is going up or going down. Keep in mind that it is possible to lose money. Your capital is at risk while trading cryptocurrency because it is still trading at the end of the day.
We always recommend that you demo trade before risking any live money. Also, read the trading volume guide. These bitcoin strategies can also be used for trading bitcoin cash as well as other cryptocurrencies.
In fact, you can use this as a trade guide for any type of trading instrument. Blockchain technology is a big step forward for how to access information. Many companies are starting to develop applications to use Blockchain in their favor.
Remember that when trading digital currency, it may seem like it's not a real currency. But it actually is real. This is not some Ponzi scheme. You must do your technical analysis just as if you were going to day trade any other instruments. You can also read our best Gann Fan trading strategy.
One of the reasons why Bitcoin is so popular among day traders is that there are many different Bitcoin exchanges available. Finding the best Bitcoin exchange will depend on many different factors. These include your home country, the preferred method of payment, fees, limits, liquidity needs, and other factors.
Here are some of the top cryptocurrency exchanges in the market:. A cryptocurrency is really no different than the money you have in your wallet. They have no intrinsic value. And cryptocurrency is just bits of data while real money is just pieces of paper.
Unlike fiat money, Bitcoins and other cryptocurrencies have no central bank that controls them. This means that cryptocurrencies can be sent directly from user to user without any credit cards or banks acting as the intermediary. When you print lots of money, inflation goes up which makes the currency value going down. There is a limited amount of Bitcoins.
This holds true for the majority of the other cryptocurrencies. We will use our best Bitcoin trading strategy.
We also have training for the best short-term trading strategy. While long term traders prefer to hold their bitcoin positions for extended periods of time, day traders have discovered that Bitcoin is lucrative for many reasons:. Because Bitcoin is more volatile than other tradeable assets, there will be a high number of profitable trading opportunities occurring each day.
Like ordinary currencies, using technical indicators will make it easier to tell when price increases are likely to occur. Volume, relative strength, oscillators, and moving averages can all be applied to Bitcoin day trading.
It is important to pay attention to technical indicators and developing trends. In this next step, we will talk about OBV trading and how to get started buying and selling cryptocurrencies. This is a cryptocurrency trading strategy that can be used to trade all the important cryptocurrencies.
Before we move forward, we must define the mysterious technical indicator. You'll need this for the best Bitcoin trading strategy and how to use it:. It is used to basically analyze the total money flow in and out of an instrument. The OVB uses a combination of volume and price activity. This tells you the total amount of money going in and out of the market. How to read the information from the OBV indicator is quite simple. Here you can learn how to profit from trading. In theory, if Bitcoin is trading up and at the same time the OBV was trading down, this is an indication that people are selling into this rally.
The same is true in reverse if Bitcoin was trading down and at the same time the OBV was trading up. What we really want to see is the OBV moving in the same direction as the Bitcoin price. In this regard, our team at Trading Strategy Guides uses the OBV indicator with other supporting evidence to sustain our trades and gain more confirmation. The next step comes from the Ethereum trading strategy which will be used to identify Bitcoin trades.
Now, before we go any further, we always recommend taking a piece of paper and a pen and note down the rules of the best Bitcoin trading strategy. Your chart setup should basically have 3 windows. One for the Bitcoin chart and the second one for the Ethereum chart. Last but not least, make one window for the OVB indicator. If you followed our cryptocurrency trading strategy guidelines, your chart should look the same as in the figure above.
Simply put, we are going to look after price divergence between Bitcoin price and Ethereum. Smart money divergence happens when one cryptocurrency fails to confirm the action of the other cryptocurrency. For example, if Ethereum price breaks above an important resistance or a swing high and Bitcoin fails to do the same, we have smart money divergence.
And the Ethereum trading strategy as well. In the above figure, we can notice that Bitcoin's price fails to break above resistance while Ethereum's price broke above and made a new high. This is the first sign that the best Bitcoin trading strategy is about to signal a trade. The same principles have been true for all the other major asset classes for decades.
Before buying, we need confirmation from the OBV indicator. This brings us to the next step of the best Bitcoin trading strategy. If Bitcoin is lagging behind the Ethereum price it means that sooner or later Bitcoin should follow Ethereum and break above the resistance.
Simply put, the OBV is a remarkable technical indicator. It can show us if the real money is really buying Bitcoin or if they are selling. What we want to see when Bitcoin is failing to break above a resistance level or a swing high, and the Ethereum already broke, is for the OBV to increase in the direction of the trend. We also want it to move beyond the level it was when Bitcoin was trading previously at this resistance level see figure below. Here is how to identify the right swing to boost your profit.
Now, all it remains for us to do is to place our buy limit order, which brings us to the next step of the best Bitcoin trading strategy. Once the OBV indicator gives us the green signal, all we have to do is to place a buy limit order. Place the order at the resistance level in anticipation of the possible breakout.
After all, we told you the OBV is an amazing indicator. Now, all we need to establish is where to place our protective stop loss and when to take profits for the best Bitcoin trading strategy. Placing the stop loss below the breakout candle is a smart way to trade. When it comes to our take profit, usually an OBV reading above , is an extreme reading that signals at least a pause in the trend. This is where we want to take profits. In the figure below, you can see an actual SELL trade example, using the best Bitcoin trading strategy.
While bitcoin day trading does have some risks, there are many ways these risks can be reduced. Here are some of the top ways to enhance your Bitcoin trading strategy. Maybe one day our fiat money system will go under and be completely replaced by cryptocurrencies.
However, as long as there are still profits to be made from Forex currency trading we encourage you to read our receipt for Forex trading success: How to Make Money Trading — 2 Keys to Success.
We hope that The Best Bitcoin Trading Strategy — has shed some light on how you can use the same technical analysis tools that you use for trading the Forex currency market to now trade the cryptocurrencies. Ready to get started? Tap here now to get the E-Book Completely Free!
Please Share this Trading Strategy Below and keep it for your own personal use! Thanks, Traders! We specialize in teaching traders of all skill levels how to trade stocks, options, forex, cryptocurrencies, commodities, and more.
Because hundreds of millions of people already have PayPal accounts, they can skip all of that hassle," says Glen Goodman, an investment expert and author of The Crypto Trader. However, there are downsides to buying bitcoin with PayPal: "You can't move your bitcoin to your own personal wallet or send it to anybody else.
You can't transfer it to a crypto-exchange to use it for trading other cryptocurrencies, Goodman notes. PayPal isn't the only mainstream app cashing in on the crypto craze. The popular investment app Robinhood is also dealing in the currency now, and it doesn't charge any commission. Square's Cash App is another platform that includes bitcoin trading, while Swan Bitcoin is an app that lets users automatically invest in the cryptocurrency at regular intervals.
Square does usually charge service and volatility fees for bitcoin transactions although it doesn't explicitly state what these are on its website , while Swan Bitcoin charges from 0. One of the main ways investors purchase bitcoin is through cryptocurrency exchanges. These have certain advantages over the apps and funds, such as:. As mentioned, this is a more sophisticated game — you're getting into the professional traders' territory.
Still, "if you're a more advanced user, then you can probably handle buying on an exchange yourself," says Samson Mow, chief strategy officer of blockchain tech firm Blockstream. To start trading, you'll have to open an account with the exchange. These exchanges follow stringent know-your-customer KYC guidelines, so you will need to prove your identity before being able to trade using them. Most exchanges have minimum deposit requirements for fiat currencies and cryptocurrencies, but these are usually very low.
Despite being over a decade old, bitcoin remains a relatively immature asset. There's less trading volume on its markets, which means it's less liquid , and the price changes can be volatile. It's therefore hard to predict how it will behave from one month to the next.
Here are some tips for reducing your exposure to risk while also increasing your exposure to potential gain. Keep it safe and secure: Crypto-exchanges still continue to suffer the occasional hack even today. Since bitcoins do not exist in physical form, seasoned bitcoin investors store them in digital wallets. A hardware wallet is a handheld, offline device that securely stores the private key necessary to transfer your bitcoin holdings from one place to another.
Ledger and Trezor are two reputable brands. A "seed backup" is a backup of the phrase i. Many investors holding large quantities of bitcoin engrave their seed phrases onto metal plates and then store these plates somewhere safe such as a bank deposit vault.
Likewise, you should plan on doing all of your investing from a secure internet connection. In general, trading or buying bitcoin on a public WiFi network makes you more susceptible to attacks from hackers. Start small, rather than big: Given its short history and still highly unpredictable behavior, it's usually wise to keep your initial investment in Bitcoin relatively limited. Even experienced investors e. And, despite the hype and forecasts, maintain your investment discipline, buying only what you can afford to potentially lose and not getting swept up by promises of gigantic upswings.
Bear taxes in mind: Even though it's a currency, the IRS considers bitcoin to be property rather than money, so it's subject to the same tax treatment as other investment assets. Bitcoin taxes can be triggered by trading, exchanging, or simply spending the cryptocurrency if it's increased in value since you bought it.
So documenting every transaction is essential. The good news is that bitcoin profits are taxed at the special capital gains tax rate, which is often less than ordinary income rates.
However, the fact that bitcoin recovered following this crash to hit a new all-time high in November and then December shows the virtue of patience.