5 Tips on Creating a Bitcoin Trading Plan for Beginners
Today, 1 BTC stands at about $9,485.00. When it was born, 1 BTC was about $0.003.
This large increase is very desirable for many, and you might want to know how to bank on this lucrative opportunity. While it might seem overwhelming to understand all of this, there’s hope.
Read on to explore the top tips on creating your first Bitcoin trading plan today!
1. Starting a Bitcoin Exchange
Whether you use a BTC machine or another method for how to trade Bitcoin, you’ll want to think about your target market. First, decide what area you’ll be in and the laws as far as Bitcoin.
The more currencies that you offer your audience, the more people that you can reach. In order to use cryptocurrencies such as Litecoin, Ripple, Dash, Dogecoin, and Ethereum, you’ll need to manually integrate them.
2. Understanding a Trading Plan
This is a framework that helps traders through the entire process. There are conditions listed for the process as well. It’ll allow you to exit and enter trades as well as managing risks.
Decide on how you’ll identify trade set-ups. Whether it’s moving averages, chart patterns, or trend lines is up to you.
As well as focusing on the market, you’ll want to determine the holding period. Those who focus on short-term trades are known as day traders and scalpers.
For long-term trading, you’ll need to have time frames whether it’s months, days, or weeks. Medium-term traders can hold trades for up to a few days or as little as a few hours.
3. Understanding Your Risks
If you do all of the steps listed but don’t have a risk management process, then all of this was for nothing. First, determine your personal risk tolerance.
This is how you limit downside risks while setting stop losses. A good strategy is to have a risk to reward ratio of about 1:1. Not having a risk to reward ratio will negatively impact your profits.
4. Bitcoin Trade Strategies
Avoid Bitcoin trading mistakes by buying low and selling high. Trading is where you won’t hold onto the Bitcoin for long, so you want to predict price movements.
You can use technical analysis or fundamental analysis for determining how healthy the market is. Keep in mind that it’ll take time and money before you’ll be successful day trading with Bitcoin.
This is a type of day trading. Scalping is about making large profits making small changes.
It focuses on making a small profit with limited risks. You can make hundreds of trades in one day.
Creating a Bitcoin Trading Plan For Beginners
After exploring this guide, you should have a better understanding of how to create a Bitcoin trading plan for beginners. Take your time and make sure to keep your risks in mind as you proceed.
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