If you want to be successful in trading BTC, you need to grasp the hold of the best strategies there are. If you are a novice in this field, you must be wondering what these strategies are. Well, a Bitcoin trading strategy is what you’ll use to cover the price of the points you have once you enter the business and once you exit. While this might look confusing for you at the moment, you should understand more once you’ve read our article. So, let’s take a look at the top four Bitcoin trading strategies to use in 2024.
HODLing
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We’ll start by introducing the most famous Bitcoin strategy there is – HODling. While this one might seem funny, it’s rather serious. It’s derived from the phrase “holding on for dear life.” Not so funny now? This term dates back to 2013. It was coined thanks to a user who was trying to hold onto his BTC when the price was dropping, but instead of “holding,” he typed “hodling.” Created by accident, it managed to stick till today because many BTC players are trying to hold onto their positions, and holding is referred when they’re are trying to maintain the long position on Bitcoin. They are doing this because they trust in the volatility of Bitcoin.
Many BTC traders stick to their position no matter how low this crypto sinks, believing that it will manage to go back on top or even peak over its 2018 value. While this strategy could make you a fortune, you could also lose significant sums due to the exact Bitcoin volatility. If you want to go down this alley, also think about risk management; you are going to need it.
Hedging
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This strategy revolves around hedging. “Hedge your bets” is a known term, and it can be applied here. You can lose money in the short term once you start trading this cryptocurrency due to its volatility. This is where hedging comes in – you need to hedge your bets on the first trade so that you can mitigate the risk when it’s time. You can do this by selling your stock short, waiting longer for the price to drop further, only to buy back your BTC at a lower rate. Once the price goes back up, you’ll have more of it than you had when you started. Some traders would borrow the initial sum of BTC needed for this move from a broker and return it once the move is completed.
This can be your downfall if the price doesn’t go down enough for you to profit or if it goes straight up after only a short fall. This is why you can try using CFD. This is called contrast for differences, derivatives, and you can hedge them on BTC fall while betting with Bitcoin that it would grow. This way, you are going to profit by BTC growth, while the CFDs would cover your losses if it falls. It can even be called a win-win situation.
A third option is what would be called a future hedge. All you need to do is to make a contractual deal with a trader to trade your BTC on a future date at a presently established price. Regardless of its future position, you’ll either win or lose from this process. You could call this as the closest thing to gambling regarding cryptocurrencies trading.
Scalping
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For this one to work, it must be executed without fault. If you managed to apply it correctly, it is going to be the best strategy there is for you. It revolves around small and quick trades that occur at quick intervals with minor profit. When we say fast, we are talking about one hour or less. The less time you’ll need, the better. Those who decide on scalping must understand that it’s not about how much profit is in one trade, but how many trades there is during one interval. The aim is not to have massive profits, as you are not looking at market movements for this strategy to work. By using a tool, such is Multi HODL; you can open as many positions as you like and go short or long or mix it, all depending on your more in-depth strategy. You should also know that this strategy best works when the market is calm; during times of significant volatility, you shouldn’t be making trades. If you are in for the immediate start of your trading adventure, you can do it on numerous platforms designed for it.
For more information, check https://bitcoins-digital.com.
Trend Trading
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Rely on this strategy, and you’ll need a lot of learning. For trend trading to work, you’ll need to get all the knowledge you can learn about trends in the BTC universe. It’s not only about the crypto itself but also all the big players on the market and their previous and next moves. You probably remember one of Bitcoin’s most prominent peak that happened in 2017 when it almost reached $20,000 in value.
This didn’t happen without reason. During those times, it was very well publicly covered. Many people started to ride the popularity train, which led to increased value, thanks to increased demand. This cryptocurrency can be traded at all times of day, month, or year. The good time to start is always right now. But, whenever that ‘now’ is, you need to know as much about BTC as you can.
The best way to do this is by using the available technology. There are a dozen tools, analysis websites, and even individuals that can help you with this. You can apply trend trading with success if you are equipped with enough knowledge. But, it would be best if you didn’t think it is easy to do it. It’s not. There are too many factors that influence BTC, and you can’t cover them all at all times. What you can do is to be careful, learn as much as you can, follow trends, and slowly enter the BTC trading world on the back of this strategy.
