Bitcoin trading seems to be all the rage these days, and with the current value of the cryptocurrency skyrocketing, it's easy to see why. However, whether you are a new or experienced investor in Bitcoin or any other traditional form of wealth, you need to be systematic and have a strategy.
It is no secret that cryptocurrency is a highly volatile market, all the more reason for those new to Bitcoin trading to find the most efficient strategy possible. With this in mind, the following will be a guide on the best Bitcoin trading strategy for beginners.
1. Follow the news
What we have learned from Bitcoin trading over the past few years is that news matters. Although Bitcoin does not normally react to news on the economic calendar, there are some news that have a lasting impact on Bitcoin futures. For example, when a certain billionaire says he will invest over a billion dollars in Bitcoin in the coming months, it is likely to thrill other investors and is a good reason to invest in Bitcoin if you haven't already.
On the other hand, there may be reports of some major investors losing interest in cryptocurrencies. In that case, news from a single individual is unlikely to move the needle on Bitcoin's value. The trick for new Bitcoin investors is to keep your 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 entering a new market blindly. But new Bitcoin investors need to be careful where they get their information from. For example, although there are many articles and websites dedicated to trading Bitcoin and cryptocurrencies, it is not possible to rely on all of these sources.
On the other hand, you have reliable Bitcoin trading platforms like Bitcoin Era, which not only offers its customers a reliable platform where they can trade Bitcoins, but also provides them with more resources and technical data that can be used by new investors to take a more informed decision.
3. Spot the divergence of smart money
The term "smart money divergence" might sound foreign to new Bitcoin investors, but it's a great strategy to make sure you're getting the most out of your Bitcoin investment. So what is it? For example, if Ethereum's price breaks through 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 cryptocurrencies is lying. Fortunately for you, there are many support and resistance guides that new Bitcoin investors can use to make better trading decisions.
4. Know when to keep them
The term holding is quite self-explanatory. It means holding on to your investment as the market fluctuates around you. This might seem like an easy strategy to follow, and that's why it is. However, the temptation to sell when the market is good may be too much for some people.
It is important to keep your investment, especially if you have bought cheap. Recent crashes in Bitcoin and other cryptocurrencies show holding is a good strategy to follow as it gives you time to evaluate the market and explore your options. There are many investment websites for trading such as Bitcoin Revolution, but you have to choose the right one and start your trading journey.