Anything you do for the first time would give you that mix of excitement and fear. When it comes to trading bitcoin for beginners, you need to learn the basics so you can ride its volatile waves like a pro would. The volatile nature of bitcoin may be a slippery slope for beginners but it can be fun with the right strategy in place.
Trading bitcoin isn’t just for the those who are lucky in making trades or those skilled and experienced but anybody can learn it. First off, you have to know the rules by heart so you can apply the right strategies and make some profit.
Becoming a professional trader isn’t one you can coin as an overnight success. Learning bitcoin trading takes time and patience. As a beginner, this guide will help you trade bitcoins in its simple and quick form.
Where Do I Start?
Choose a trading platform or exchange. The most popular option for both beginners and experienced traders would ne Coinbase. You can also go for other reputable options like Binance or Kraken depending on its availability in your country.
Use the StopLoss Method
It’s eary to do bitcoin trading for stable coins like the USD. You can either place a market order or use the StopLoss method wherein the platform itself would suspend the trade automatically on the price you have set while also converting your BTC into USDC. This is to avoid losing money when you’re not looking.
Master Technical Analysis
To learn the ropes of bitcoin trading, you must master technical analysis or TA. To do this, you need to open a free account on Tradingview where you can monitor your bitcoin chart. With the chart, you can draw or analyze trading patthers. Check on the RSI or relative strength index and Volume on the chart.
Study the different basic patterns like ascending and descending triangles, falling wedge, head and shoulder, bull flags, and bear flags. Check out the probabilities linked to the outcomes. Try it out and see what works and what doesn’t. You have to monitor the probabilities and then narrow down its scope.
Trading patters are not a guarantee of success. However, you can always see patterns that will help you in your decision-making process when it comes to determing the price movement or direction of bitcoin prices. Trading patterns would vary. With this method, you can stop or freeze your bitcoins and then wait for the price to drop where you can just revert it to bitcoin again. If you want to gain more, you also need to trade more. Ultimately, it will depend on your risk appetite.
What is Your Trading Strategy?
You want to trade in order to gain profit. However, you can only trade money that you are ready to lose at any point in time. Do not put all your eggs in one basket. In other words, do not trade all of your money. Start with an amount that you’re comfortable with.
When you trade bitcoin as a beginner, you have to recognize that you are going to be pitted against professional and experienced traders and even trading bots plus you also trade against Bitcoin’s volatile nature.
Never trade depending on your feeling or just go random. It’s not going to work. You have to learn and create a strategy out of your observations. You have to use patterns to predict outcomes.
Next, you have to set a trading target and always stick to it so you can make a profit. Once you create your own strategy, follow that. You have to mute other people’s voices or strategies and stick to your own formula or one that works for you.
Keep a Trading Journal
You have to document things to learn the basics of trading crypto. Start with the basics because that is the foundation of your strategy and then start trading. The little details and even your mistakes will matter especially when you start trading bitcoins.
Write on your journal everyday and reflect on your strategies. Write down your strategies that cover short, medium, and long term. Write down your strategies in full details so you would have data to refer to in the future. Set your targets and your stop-loss.
Do not be aftaid to commit errors. All of these failures will helo you formulate strategies that work and hone you to become a better trader.
Never Trade Out of Your Emotions
It really doesn’t matter whether Bitcoin will go up or down because you can always create profit out of its turbulent nature. Do not hang around waiting for Bitcoin to go up. You have to be realistic and rely on your own strategies that you have tried and tested to work for you.
You have to rely on the actual market or price patterns and movements you see and not what you expect or want it to be. With bitcoin trading, you cannot follow the crowd. You have to go your own way. You have to set your own biases and base your trading moves solely on that.
Check the Trends But Don’t Follow Everything
Don’t get dazed by the candle movement. You can always check or study the trends but do not lose sight of your own calculations or predictive patterns. Don’t waste time on staring at the small scenes. Always look at the bigger picture. You have to look at the big trends such as magnifying the bull or bear markets because this can help you immensely with your strategies.
Keep It Simple
There are tons of guides onlin on how to trade as a beginner. However, the only way to trade right is to keep it simple. You only have to define the uptrend and downtrend. Watch the trends but follow it only when you have the right predictive patterns in place. Don’t make trades at the beginning or the middle, you have to wait it out until the end.
Trade isn’t a Gamble
A lot of newbie traders would make the mistake of treating trade like a gamble. It’s not. You have to put your emotions on the backburner when making decisions. You have to be patient and practice risk management when you trade.
Don’t try to win too fast or you end up losing it all. Building your trading experience takes time so don’t rush it. You have to build on consistency first when you’re starting out so don’t worry on your speed because with patience and good strategy, you will get there.