The volatility of bitcoin might seem very risky for the new investors but, they will be happy to know it is the main attraction for small-term expert trader to make a profit. Volatility is the frequent price movement of bitcoin. It can be upward as well as downward. Also, it is very sudden. Even, per small-term traders, it is the most suitable nature of an asset to make multiple profits in a short time. There is a list of some strategic movements that can help you become a good trader in the volatile bitcoin market.
You can start with a small amount and then increase your investment:
- Start with a small amount: The utmost important thing that every trader must do in the volatile market is not to invest all of their life savings. A volatile market is very prone to sudden fall. So, if you invest all your money, you can become bankrupt at any time. Experienced traders suggest that one should invest only less than 5% of the savings.
- Study the price movement: Studying carefully is another important thing when you are dealing with the small parts of the graph. You have to know how to analyze the graph so that you can find the right situation to begin a trade and can make a decision according to the movement of the price.
- Detect a suitable entry point: Entry points determine how your entire trade will be. You have to select a suitable point when the price of bitcoin is low but is expected to go high soon. Understanding how the price moves and other consequent factors of the bitcoin market will help you do that.
- Don’t be driven by emotion: When you see you are making money as the price is increasing, it is hard to control your emotion. But skilled traders can do this. Your emotion can make you let wait for longer in expectance to make more profit. But, as bitcoin is volatile, it can drop at any point in time without any prior notice.
- Don’t be overconfident: Overconfidence is not a good thing because being like this you can’t change what is going to happen. Maintain a balanced mental state. Be confident but, at the same time be careful. Short-term trading needs a calm mind.
- Select stop loss: This is a good strategy for trading in a volatile market. In the exchange platform, you can see an option- stop loss. This is a minimum level, and if bitcoin’s price would reach that lower level your trade will automatically end. This option doesn’t guarantee you to make a profit, but it will surely mitigate your risk amount.
- Be focused: As said before, short-term trading in a highly volatile market needs analysis of smaller movements. If you are 100% focused, you will be able to find out the actual time to make a trade.
- Find the right exit time: As the entry time is important, exit time and an exit strategy are also important. Remember that you have to enter the market when bitcoin’s price is low. And exiting the market should always be when the price is higher than the entry time. Thus, you make a profit out of volatility so, learn to build this skill.
- Earn small profits first: Volatile market is best for short but multiple profits. Traders also do that. Don’t go for a long-term plan if you find the market is so vulnerable. Rather, the more the price fluctuates, the more chances are there to make a profit with every movement.
- Learn from experience: No one becomes a good trader without any mistake. So, don’t panic if you lose for the first time. You have invested that much amount that you can afford to lose. So, move on and learn from the experience. List the mistakes that you have made in your first trade or the strategies that didn’t work, also make a note in what situation they didn’t work.
All these are very important tips but, one more thing must be added you must choose a reliable trading platform like the Official Website being one of them. This has the most advanced AI that studies your trading pattern and makes the right recommendation of trading strategy. It also keeps you posted with the updates of the market, thus simplifying your trading experience. If you are trading for the first time with a reliable platform you will be tension free from scams.