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How to Become Successful in Bitcoin Trading

Bitcoin Trading | Unicoin Digital Capital Exchange

Introduction

One may do Bitcoin trading in the form of futures or OTC, and Bitcoin is the main cryptocurrency among all, so traders prefer to buy or sell Bitcoin rather than Altcoin. However, due to the cheaper rate of Altcoin, traders are changing their preferences from Bitcoin to Altcoin. But when a trader buys or sells Bitcoin, then it’s a matter of huge investment and substantial profit or loss.

This is the dream of any trader to be successful in any kind of trading, including Bitcoin. There are so many parameters and learning required to be a winner in trading, and cryptocurrency trading is very crucial because of its online, borderless trading mechanism. It would be best if you had certain traits to execute the trades, which pays you ultimately in long term. We have to try to recapitulate most of the important points into four significant points to understand better.

1. Technical Analysis

We recommend learning technical analysis to cover price action, candlesticks patterns, leading and lagging indicators. Technical analysis uses the past prices to predict the upcoming price, so it also helps to inform you support and resistance level of Bitcoin price. This analysis will assist in finding the entry-level Bitcoin price as well as the exit price level. Exit price may be taking profit level or stop loss level. You can get proper guidance from an analyst and additionally, you can look out on google or YouTube for online free stuff. Sometimes, you may find enough knowledge online, which is required to learn for analyzing the Bitcoin price. Technical analysis will get you an answer for trends also in a different time frame and let you know the waiting time for your suitable trading.

2. Fundamental Analysis

Fundamental Analysis is nothing but predicting the impact of news, information, and another economic event on the price of Bitcoin. You need to update your information regularly despite anything that comes out in the news because sometimes some news impacts the price of Bitcoin largely in either direction. News, buyer's volume, and seller's volume are the backbone of the price driver. There are positive, negative, and neutral impacts of the economic event on Bitcoin, and news may be political, regulatory, and defaulter. As per the news case, Bitcoin performs its value in the prevailing market. There are numerous news portals, TV, online media, and Newspapers where you can collect information and the Altcoin news also causes to move the price of Bitcoin. Therefore, you should not ignore any cryptocurrency news.

3. Fund and Risk Management

This is one of the aspects which are missed by the most loser in the market. A trader should know how much minimum fund is required as free margin, execution of a trade, and additional fund for smooth trading, which can avoid a margin call and may take a new position without closing the existing position for mitigating the risk. Risk management reveals about the numbers of position required, the ratio of risk & reward, and also tell the chances of profitability. Even in the case of loss, you can take the advantage of a good trading plan that may lead to the recovery of the loss amount. This is seen that most successful traders follow the tools of fund and risk management; therefore, this is highly recommended to learn and implement risk management with a good trading plan.

4. Back Testing before Actual Trading

This is the final step but essential to be used before actual live trading as whatever strategy is developed that must be tested to know if that is giving a good result or not. Sometimes, you may feel that your strategy is excellent, but when it comes to real trading then you may not have the same result or impact due to market conditions and other trading factors. It is recommended that you first develop your strategy with a trading plan. You should implement the idea into demo trading for accuracy, and after that, you should try with a minimal amount in the live system. If you are getting your result positive and up to the mark, you may try your strategy with a reasonable amount of funds. Sometimes, one strategy does not work, so you need to try a series of your strategies for backtesting, and then you may choose the best of them.  

Conclusion

We have discussed above the quality of a successful trader and what you are required to do for the same. You should learn fundamental analysis, technical analysis, fund & risk management, and backtesting. It is highly recommended not to miss any of the above traits because a combination of the above analysis may provide you with a virtuous result. To be successful in Bitcoin trading, you must have patience, a good trading environment, and minimal negative trading emotions.

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