The Best Bitcoin Trading Strategy – 5 Simple StepsThe Best Bitcoin Trading Strategy – 5 Simple Steps
Once you have decided to start trading Bitcoin and finalized a strategy for the purpose, you should look at the best ways to refine this strategy. You must also download a Bitcoin wallet before trading. This will store the winnings you have earned after trades.
Traders are always on the lookout for the best trading or investing solutions. These methods should work regardless of whether the Bitcoin prices are rising or falling. So, they are not really dependent on Bitcoin’s value. However, whenever you trade Bitcoins, you must remember that you can lose money. Your funds will always be at risk if you trade cryptos. So, it may be a good idea to do some demo trading before risking live money. Choosing a best bitcoin robot is the most wiser decision if you are planning to trade bitcoins. A BTC robot is a software tool that makes buying and selling choices for the trader and then performs the trades. Bitcoin robots are far more accurate than humans, which means they are more likely to make profitable transactions in both rising and declining cryptocurrency markets. Many Bitcoins robots even provides options to perform free demo trading.
- The best Bitcoin trade strategy is one which uses an indicator. This is the OBV or On Balance Volume indicator effective for day traders. This indicator assesses the amount of money flowing in or out of an asset. Therefore, the OBV makes use of both price activity and trading volume. You will find this trading strategy indicator on most reputed trading platforms. If the OBV trades down while BTC is up, it means people have started selling. The opposite is also true when Bitcoin trades downwards and OBV trades upwards. The downside is no tech indicator will be 100% effective every time. Overlay the BTC chart with OBV indicator and Ethereum chart. So, your chart must ideally have three windows; one for the ETH chart, one for the BTC chart, and one for the OBV indicator.
- Look for differences between Ethereum and Bitcoin prices. Smart money divergence takes place whenever a crypto fails to confirm another crypto’s actions. So, if the ETH prices break above a key resistance level or starts to swing high but the Bitcoin prices do not, there is a divergence. In other words, either of these two cryptos is not speaking the truth. The only reason why this strategy works is because whenever there is trend, the crypto market is expected to move in one direction only.
- Watch out for an increase in OBV in the trend’s direction. In case the BTC has been getting behind ETH values, it indicates that the former will eventually follow ETH and break resistance. The OBV is a useful indicator; it tells you whether the money is from buying BTC or selling BTC. The OBV should increase in the trend’s direction when the Ethereum has already broken the resistance level but the Bitcoin is failing to do so.
- You must now place buy limit orders at resistance level to catch a possible breakout. This should happen when you get a green signal from the OBV indicator.
- Finally, you must place stop loss below breakout candle to take profits. As far as taking profits are concerned, an OBV reading of 105,000 is usually considered to be an extreme reading which indicates a pause in trend. So, this is ideally where you should take profits.
Bitcoin trading always entails risks but there are ways to minimize these too. You can start by diversifying your trades and spread your funds across multiple coins. Paying attention to news relating to the Bitcoin and other cryptos helps and using indicators like OBV helps you justify trades. Another way to minimize the risk related to trading is to execute the trade through trusted online trading platforms. Today, there are several advanced trading robots available that can trade on behalf of their users. One such bot is the bitcoin era. So before considering investing in bitcoin era 2022, make sure you visit a trustworthy website where you can find a lot of reviews about the application and offer the result of the test conducted on this Bitcoin Robot.