As a result, large groups of traders have capitalized on the rise of bitcoin trading on the spot, CFD and futures markets. In an environment that is best described as "turbulent," discipline and dedication are two essential prerequisites for success. There a lot of ways to earn money by toptips4u.com.
Here are five tips for turning the inherent volatility of Bitcoin trading in your favor:
- Mastering technical analysis
- Embrace a sustainable pace
- Stay on top of the news.
- Implement stop loss
- Use prudent leverage
1: master technical analysis
Tips to earn money: The nature of Bitcoin makes it an outlier compared to other asset classes or currencies. There is no central bank or government agency to influence your valuation. News events can have unpredictable impacts, and other financial instruments exhibit sporadic correlations. In fact, Bitcoin's pricing models are largely speculative, ignoring much of traditional financial theory. You Want ot earn money by toptips4u.com. then contact with him.
Understanding the basics of technical analysis is an absolute must before entering the Bitcoin markets. In many ways, the price itself provides the only reliable clues to the future value of Bitcoin. The lack of relevant market fundamentals drives the analysis of price charts, the application of indicators and the reading of price action.
2: adopt a sustainable pace
Tips to earn money: Trading is a marathon, not a sprint. One of the most important tasks facing Bitcoin market participants is setting a timetable that is sustainable in the long term. Working extraordinarily long hours every day leads to burnout and poor performance.
3: stay on top of the news
Tips to earn money: Bitcoin is unique in that typical news does not have a predictable impact on the markets. There are no scheduled GDP releases, WASDE inventory reports, or EIAs to drive participation and skew prices.
However, unexpected news can greatly influence the price of Bitcoin. Recent examples include: If you're going to start trading Bitcoin, it's a good idea to have access to a live news feed and stay tuned.
4: implement Stop Losses
Constant volatility is an attribute of the Bitcoin markets that is particularly attractive to active traders and investors. Valuations regularly fluctuate between 5 and 10 percent daily, creating opportunities for traders with an appetite for risk.
It doesn't matter if a trader is participating in the cash, CFD or Bitcoin futures markets, the use of stop losses is a must when trading Bitcoin. Big swings in prices certainly lead to profit making, but there is the possibility of catastrophe.
It is absolutely imperative that you use a stop loss somewhere in the market (the exact location will vary) to protect any open positions.
5: use prudent leverage
Tips to earn money: It's a cliché, but leverage is actually a double-edged sword: it increases profits but magnifies losses. Too much leverage promotes reckless money management and will ruin your trading account. Too little can hamper performance because premium operations may not perform to your ability. Ultimately, effective leverage management is a balancing act for a Bitcoin trader to perform.
Bitcoin futures products can help you manage leverage because they put additional emphasis on proper leverage. The CME Group and Chicago Futures Exchange (CFE) offerings are priced at $ 25 and $ 10 per tick, respectively. To say the least, it can be very capital intensive to take positions from multiple contracts.
An easy way to define position size is the 3 percent rule. Under its parameters, a maximum of 3 percent of the trading account can be allocated to a single operation. This ensures proper alignment of risk with reward with respect to position size and stop loss location.
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