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Bitcoin took a tumble last week and shed over 10,000 points. While it has gained 1200% from its low of %3,000 in March 2020, many traders are spooked by the high volatility of its prices. As a trader who has earned big and lost big, I hope to share some tips with those who have just begun trading BTC futures.
My love-hate relationship with Bitcoin was formed as early as October of 2017, just before its epic rise to over $20,000.
At that time, almost all the tech-related websites I browsed through were talking about Bitcoin and all the overnight millionaire stories. Highly tempted, I first deposited $2000 without doing thorough research into cryptocurrencies. When I first made a 5% profit, I was totally calm and patted myself on the back for earning money on the first try. I also told myself that I just wanted to earn some pocket money and I would sell my Bitcoin as soon as it gained a little more. But as Bitcoin climbed higher and higher, I became hooked and ploughed in a chunk of money – $12,000 in total, all within a month. Then one day – you probably already know what had happened – Bitcoin started a free fall.
On the inside, I was having a panic attack, but I kept telling my friends, and most importantly myself, that Bitcoin already had a few drops in the past and it had bounced back, so there was not much to worry about. The only thing is, it didn’t recover like the past few times. I watched it sink lower and lower, and said no to every opportunity to sell it. In less than a month, half of my deposit was wiped out, along with my confidence with Bitcoin. The loss really hurt, and I spent several months mourning for it. But that was like a wake-up call for me and I began to put more effort into studying what made Bitcoin tick and why the Bitcoin market moved so violently.
My research into Bitcoin convinced me that it could not only hedge against inflation in the long term but could also act as a short-term investment due to its high volatility. This time, I decided to switch sides and go with the main trend. I opened an account at Bexplus, a crypto exchange known for its user-friendly interface and beginner guidance. Using its demo account, I learned to analyze the market with different indicators. Sometimes I won, sometimes I lose. But since Bitcoin continued to fall in those few months, I made more than I lost by shorting Bitcoin. Now I diversify my portfolio, invest in other traditional assets to manage risks, and apply what I learned to trade. Although I trade Bitcoin less frequently, I still make money by depositing it in the Bexplus wallet with an annual rate of up to 21%.
I still believe that bitcoin is a force for good and an ideal asset despite its volatility, especially at a time when the government continues to print more fiat. If you hope to invest in Bitcoin and engage in futures trading, here are some tips for you:
Tip 1: Start with small capitals
Starting small enables you to go a long way. It is advised that you divide your capitals for multiple positions. So if the market goes against you, you can allocate a position in the opposite direction to hedge loss.
Remember, if you are trading BTC CFD, the buying power will significantly enlarge with the help of leverage. For example, if you open a position using 0.01 BTC and 100x leverage, the position will worth 1 BTC.
Tip 2: Practice and improve your skills and strategies
Earning money by speculating on the price movements seems like gambling, but it’s not. Successful traders are those who learn to analyze the market, keep themselves abreast of market news, and keep trying out different strategies. Choose a platform that offers a built-in trading simulator for you to practice. A good demo account serves as a sandbox for you to improve your skills and get familiar with the fast-changing market. Besides, some platforms even offer consulting services or personal account managers to users.
Tip 3:Trade on support and resistance
Support is a place where the price tends to find support as it falls. This means that the price is more likely to recover from this level instead of falling below it. As for resistance, it is the place where the price has the biggest difficulty breaking. If the price is close to the support at an uptrend, you could put a long order.
As we can see that the $42,000-$45,000 is considered as the support level of bitcoin, while the $52,000 is the resistance. If we open a long position with 1 BTC at $45,000 and close it when the price reaches $50,000, we will earn ($50,000 – $45,000) * 100 BTC/$50,000 = 10 BTC.
Tip 4. Take advantage of technology
You could utilize different tools and technology to analyze the market or make trading easier. Indicators, drawing tools, and P/L Calculators are available on many platforms. Using them right can help you better understand the market trend.
Another powerful tool is smartphones. Nowadays most mobile trading apps are as full-featured as their desktop counterparts while being far more convenient. Take the Bexplus app as an example, it not only covers the necessary functions such as real-time charts and interest-bearing wallet but is also installed with real-time notification to ensure users can monitor the market fluctuation 24/7. This could keep you updated while taking your mind off the stress temporarily.
Like all other Bitcoin derivatives, leveraged trading is risky, but it does generate juicy profits when used right. If you hope to try BTC futures trading, I recommend Bexplus Exchange to you. Bexplus is a leading crypto derivatives platform offering 100x leverage in BTC, ETH, EOS, LTC, and XRP futures contracts. It requires no KYC and no deposit fee and is running a 100% deposit bonus promotion. You can trade different cryptocurrencies or earn money just simply by depositing in the interest-bearing wallet.
Disclaimer: The information presented here does not constitute investment advice or investment proposals. Statements, opinions and opinions expressed in this article are solely those of the company and are not inconsistent with the opinions of Crypto News Flash. In particular, I highly recommend DYOR readers before investing in a cryptocurrency, blockchain project, or ICO that guarantees a return. Additionally, Crypto News Flash does not endorse or imply that cryptocurrencies or published projects are legal in any particular reader’s location.
