Just like any other business, Bitcoin and digital currency trading needs, skill, providence, and first-rate timing if you want to make a good profit. Auspiciously, a good number of means than ever before have been developed to help traders understanding the existing market conditions and generate profits from price trends which other, semi-skilled merchants might fail to benefit from on.
All said, let us now delve into five simple ways that will help you grow and increase your digital currency trading profits today and tomorrow.
Since the nature of cryptocurrencies including Bitcoin is volatile, it helps it to be a major trading instruments because when the fluctuation is high (let’s say by 10% a day), it brings a massive amount of money-making trading prospects. Albeit, bitcoin and other digital currency derivative instruments like futures, etc., traders can now change a fairly small market trend into a lumpy profit because of the knack to successively trade on margin, and this also enable digital asset traders to borrow some funds for opening larger trades (can go for more than 145x balance on their personal accounts).
After considering all these, when trading with for instance 145x leverage, around 1% market trend in trader’s favor will produce a 145% profit (145 x 1%). So, cryptocurrency traders have to be very selective, especially when they are making the decision to trade with such big leverage, because any small shift in a wrong trajectory can lead to automatic liquidation. Intrinsically, it is very good to trade with a relatively small leverage especially when the market is less positive and unpredictable, and high leverage should be used during the times when the cryptocurrency market movement is certainly forecasted.
As aforementioned, digital asset derivatives trading places allow trading strategies which are either unfeasible or out-and-out difficult on spot trading platforms. Virtual currency derivatives exchange further supports virtual currency merchants to trade on the short side and this is one of the helpful things.
It’s true that several cryptocurrencies including BTC, have registered a massive growth, however, these altcoins have also registered bearish periods. When the market is going downside, most users tend to sell their tokens thinking that the tokens are going to continue declining, and those traders who buy those tokens at that time make a lot of profits by purchasing them at a cheaper price and sell them a market price when their prices skyrocket.
Additionally, the potential to short makes it easier for Bitcoin traders to apply risk management strategies to secure their spot ventures. Among these powerful strategies, is called a short hedge, which can be employed to reduce price risk by lodging in the price of a virtual currency to be delivered imminently.
Currently, there are a wide range of tools that automatically helps traders to trade without losses. These tools alert them when there is an increase in the price of a specific cryptocurrency they are interested in (let’s say when Bitcoin or Ethereum gains or loses by a certain percentage), hence helping them to spot more viable trading opportunities save time too. These alerts can be via SMS or emails.
Generally, automatic alerts are advantageous tools for any cryptocurrency trader who usually spends some time away from their main tracking devices such as computers, since automatic alerts enables traders to remain on top of the market sans the requirement to track it physically (by themselves).
Yes, it is very correct that for any digital asset users to make visible profits, they need skills, and to be very determined and experienced, however, another easy change can be employed and still contributes to making more profits, and this is “reducing on the trading fees.”
Nevertheless, low fees aren’t everything. As an alternative, virtual currency trader should be seeking for an exchange platform which possesses the right balance of features and fair fees. In the same way, although a lot of traders are cautious to trade on exchange podiums with satisfactory maker and taker fees, a small number of buyers/sellers give thought to, other, less palpable fees while trading.
Never put all your eggs in one basket. Different virtual currency exchanges give different tools (such as charting tools, etc.) to buyers/sellers to make profits and succeed in their businesses. These tools enable buyers/sellers to make clear decisions while making any transaction or carrying out a technical analysis on a cryptocurrency market. Because of that, exchanges which give a good number of clear and user-friendly charting tools tend to equip sellers/buyers with better technical analysis hence performing better trade decisions.