The Bitcoin Exchange Market is volatile and unpredictable. Many traders rely on technical analysis to make the best decision when investing their money, which often leads to losses in an already risky market. In this blog post, we will discuss various strategies that you can use to protect your investments in Bitcoin’s volatile exchange market.
i) Diversification
Before you begin trading bitcoins, you must first decide how much of your money to invest. The general rule is not to invest more than 10% of the total amount you have saved. Although many people choose to put their entire nest egg into BTC-e, it is generally not recommended, if only because of its volatility. It is advisable to keep the majority of your savings in a safer asset, such as gold or silver.
ii) Choosing the Right Exchanges
Another important decision to make is which exchanges you should use to trade your best bitcoin exchange for profit. Some of the most popular exchanges are BTC-e, Bitstamp, CampBX, and Coinbase. Many others could work just as well, but you need to do your research and figure out which platform has the features you need.
For example, if you value speed and reliability, choosing an exchange such as BTCC or Kraken might be better than Bitfinex. However, if you prefer to handle fiat money directly and use something like CampBX for BTC trading, this might be the best option for you.
iii) Trading off Book
One of the easiest ways to make money in Bitcoin is to trade them off-book. Since BTC trades are currently unregulated, unscrupulous traders have plenty of opportunities to take advantage of less experienced investors by front running their orders or to lockout competing offers using certain order types. If you are willing to put in the time and effort, it is relatively easy to take advantage of these loopholes.
iv) Automated Trading
Automated trading has become increasingly popular ever since Bitcoin came around. Since technical analysis widely uses in the Bitcoin Exchange Market, trading bots are widely available and can buy or lease. For example, CurrencyFair offers a free trading bot that works with major exchanges like BTC-e and Bitstamp. However, another class of trading bots called semi-automated trading bots requires some programming skills to set up but are usually much more powerful.
v) Arbitrage
As the price of Bitcoin is continuously moving, there are many opportunities for traders. For example, if you have bitcoins purchased at a low cost on Exchange A and the sell order hasn’t been fulfilled yet, you can buy BTC from Exchange B and use it to fulfill your sell order. This way, you will make a profit from the difference in prices.
vi) Pyramid Schemes
Pyramid schemes are another common strategy used by scam traders. They create a multi-level marketing scheme based on the same principle as those found in many other industries – and BTC is no exception to this rule. Since Bitcoin has such high volatility, it is possible to cash out at any point before you invest. For example, if someone approaches you with a scheme that promises guaranteed returns, it is probably best to ignore them.
vi) Security
As Bitcoin becomes more mainstream, the security of exchanges will become increasingly important. BTC-e recently implemented some changes to help increase its reputation as one of the most trusted exchanges available today. You shouldn’t store your bitcoins on exchanges for too long and move them to your wallet as soon as possible.
vii) The ISDAfix Scandal
The International Swaps and Derivatives Association, ISDAfix, is an integral part of the Bitcoin trading process. Without it, BTC prices would be far less uniform across different exchanges. However, recent events have shown that this price-fixing process may not be as fair as everyone thinks, with Barclays Bank accused of artificially suppressing USD Libor to profit at the expense of their clients. It will be interesting to see if this has any impact on BTC future prices or volatility.
viii) A Bit of Luck
Last but not least, a bit of luck never hurts anyone. People who can catch the right trend early on and cash out at the right time will always make money in Bitcoin. However, bear in mind that this is a tricky business, and even the most experienced traders cannot guarantee success every time they put their money into Bitcoin.
ix) A Final Word of Caution
Although top bitcoin exchanges is a fascinating opportunity, it is essential to realize that many scammers and con artists are trying to get their hands on your money. If you don’t know what you’re doing, BTC can easily lead to a total loss instead of a nice profit, so make sure you do your homework before investing.
x) Other Tips
If you are looking for ways to earn money online, it is advisable to look elsewhere. Although there are quite a few websites that offer decent payment for everyday tasks, the truth of the matter is that most of them are nothing more than scams. The same thing can say about BTC faucets where you get paid to solve captchas all day long.
Final Thoughts:
Bitcoin trading can be a very profitable venture if you know what you’re doing. However, it is essential to be aware of all the risks and possibilities before making any decisions with your hard-earned money. We hope our guide will help you make the most out of your BTC experience, and we wish you good luck!