How to Trade Bitcoin Successfully Like a Pro Trader
Trading cryptocurrencies is currently one of the hottest trends in the investment landscape.
Many people are earning money through trading and for good reason. Cryptocurrencies can be traded 24 hours a day and bitcoin sv wallet are not controlled by financial institutions the same way fiat is regulated by central banks. This eliminates issues such as price manipulation. Trading cryptocurrencies is also relatively easy and there are many opportunities in the market.
For many traders, it makes sense to trade Bitcoin which is one of the many cryptocurrencies out there. One of the main reasons for this is that Bitcoin is one of the most volatile cryptocurrencies and it also tends to influence the performance of altcoins.
This was evident in the 2017 cryptocurrency rally where most altcoins rallied because Bitcoin was rallying.
Getting into Bitcoin trading
By now you probably know that some of the people that claim to have made millions after investing in Bitcoin managed to make that money because they invested when the price of Bitcoin was still low.
Especially those that purchased Bitcoin before 2016 and held on waiting for the price to reach epic heights.
Unfortunately, that was one of a kind opportunity for the cryptocurrency market and we saw the cryptocurrency crash in early 2018 and most of the gains were lost.
However, you can still trade cryptocurrencies but it is best not to do it speculatively since cryptocurrency prices have now normalized.
Day trading Bitcoin
If you monitor the price of Bitcoin, you will notice that it has significant volatility at any time of the day.
This makes it an attractive asset to trade in a manner similar to how forex pairs usually have volatile movements, only in this case Bitcoin might offer more volatility. So how does one take advantage of this?
You can use a Bitcoin trading bot which will do the bulk of the work for you.
Some crypto trading platforms promise to offer crypto trading bots that analyze the market on your behalf, execute the trades and even close trades for you. All you have to do is to set the parameters to your preference and the crypto trading bot will do the rest for you.
You should have a good understanding of how Bitcoin works and what really influences its price movements if you would rather do the trading yourself rather than rely on a Bitcoin trading bot.
Bitcoin's volatility is mainly caused by demand. The bulk buyers or large accounts tend to have a significant impact on Bitcoin's price direction. You can identify the direction in which the large accounts otherwise known as whales are trading and also trade in their direction. You can access that data on platforms such as Binance Futures in the sentiments segment.
Using technical indicators
As far as the execution is concerned, you can use technical indicators to identify potential entry points. Note that indicators alone are not very reliable, thus the need to combine them with other data, in this case, sentiment data on large accounts vs smaller accounts would make sense.
One of the best indicators available for trading Bitcoin is the On Balance Volume or OBV indicator.
OBV is a great tool for predicting strong trends. When the OBV aligns with the price of Bitcoin for a strong bull or bear movement, then it is best to trade the direction of that trend.
You can also overlay a Bitcoin Chart and that of Ethereum for another OBV strategy. This strategy is called smart money divergence and it is where the price of Bitcoin and ethereum are both behaving similarly but at some point, one fails to respect support or resistance lines.
The above demonstrates the money divergence, in this case, the divergence between the Bitcoin and electrum sv wallet Ethereum prices when pegged against the U.S dollar. The trading platform
You will need a reliable platform that provides access to important indicators and also a trading interface that is tuned to meet trader requirements.
TrailingCrypto is one such platform and the beauty is that you can switch from one exchange to another within its platform. It also offers the flexibility of selecting different types of order types. It also uses measures such as API keys to connect to the different crypto exchanges, and two-factor authentication as security measures.
As far as the assets are concerned, you can trade Bitcoin pairs and other cryptocurrency pairs, so you have good variety.