Everyone wants to make quick profits, but there are limited ways through which you can earn big profits with minimum efforts, and one of them is bitcoin trading. Bitcoin trading refers to buy and sell bitcoins online and using its rapid price fluctuations to make some profits. If you are a beginner, there are some tips mentioned below that you must follow while trading bitcoins and Ethereum through websites like ethereum-trader.io
Tip 1 – Begin small
The first and most important tip for novice bitcoin traders is that you should always start with a small investment. The bitcoin market is highly volatile, and if you are new to it, you must avoid taking any risks. If you want to minimize the risk, the best way to do it is to make a small investment, as it will help you learn more about bitcoin trading without exposing the investment to massive risks.
Tip 2 – Choose a wallet wisely
Before you start bitcoin trading, you need to create a bitcoin wallet. The bitcoin wallet is a digital locker in which you can store bitcoins safely. They are several types of wallets, but you need to compare them all the choose the one that fits perfectly to your needs and requirements. There are two major types of bitcoin wallets; hot wallet and cold wallets. You must learn about both of them and choose the most suitable one.
Tip 3 – In-depth research
Bitcoin trading is a lot different from other trading activities, so you need must do proper market research before entering into it. There are different terms, concepts, and rules that you need to learn before trying your hands into it. Bitcoin’s price is volatile, so if you want to become a successful Bitcoin trader, you must do the proper research beforehand.
Tip 4 – Choose a bitcoin trading strategy
There are different types of strategies used by varying bitcoin traders, and you need to pick the best one according to their needs and requirements. There are mainly four types of trading strategies Scalping, Swing trading, passive trading, and day trading. Each one of them requires a varying amount of time and effort.
Tip 5 – Set strict profit targets and stop losses
Bitcoin price is highly volatile, which makes it difficult to cut down the losses and risks. There are few tools such as profit targets and stop losses that you can use to reduce the risk and maximize your profits. Profit targets and stop losses allow you to set the minimum profit and loss you are willing to take. It allows you to sell and buy bitcoin at the right time.
Tip 6 – Take advantage of trading leverage
The trading leverage is an incredible feature offered by some bitcoin trading platforms, which allow you to borrow some funds from them and use that for trading. It is a great way to trade for a beginner, but in case things go wrong, it can also make you face massive losses. So, you must use it but be careful while using it.
Tip 7 – Purchase and hold bitcoins
There are different ways to trade bitcoins, but if you are looking for the most profitable one, buying and holding is the perfect option. Buying and holding is a passive bitcoin trading strategy in which you buy and hold bitcoin for several weeks or years. It helps you to pass the short-term price fluctuations and allows you to make big profits in the long term.
Tip 8 – Invest in other cryptocurrencies too
It is irrefutable that bitcoin is the most valuable digital currency but investing all your money into it is a foolish thing to do. So, you must try to bring some diversification in your portfolio and try to invest in different cryptocurrencies such as Ethereum, Litecoin, etc.
Tip 9 – Hold back your emotions
With high price volatility, it is obvious that you will get mixed emotions while trading bitcoins. But you must keep your emotions under control; otherwise, you will make the wrong decision being affected by your emotions. So, you must keep your emotions at bay and make decisions according to research and analysis.
Tip 10 – Stay away from frauds
The bitcoin market has no regulations, which makes it a perfect place for frauds to cheat people. So, you must be aware of the scammers and frauds while trading and take all the precautions to avoid them.