In the changing world of cryptocurrency, Bitcoin is one of the most popular and pioneering cryptocurrencies. It has allowed individuals to make safe, independent, transparent, speedy transactions. As Bitcoin grew in popularity, so did its investment value, and now, amateurs and seasoned traders are trading Bitcoin to USD for high profits. In this article, we’ll look into crypto trading and specific BTC trading strategies to help you get a stable footing in the cryptocurrency world.

Understanding Crypto Trading

Buying and selling cryptocurrencies to earn a profit is called crypto trading. Here, your transaction type determines what kind of operation will occur in the cryptocurrency market. For futures contract trading, for example, both parties agree to buy or sell an asset at a specific future time at a predetermined price. That way, you can protect yourselves from any Bitcoin market fluctuations beforehand.

Top Bitcoin Trading Strategies

Let’s go through some of the most popular BTC trading strategies.

1.   Dollar-Cost Averaging (DCA)

DCA is one of the most beginner-friendly investment strategies in the Bitcoin market. Instead of making one large purchase, you invest a set amount of USD at different intervals, irrespective of Bitcoin’s price and value. This way, you’ll buy some coins at higher and lower prices over time, giving you a decent price per coin when you cash your investment.

This strategy suits amateur investors because even with little crypto market knowledge, you don’t experience the market’s volatility as much. While this technique is convenient, it doesn’t guarantee returns because if Bitcoin’s price remains low for long periods, you might not make any profit.

2.   Day Trading

If BTC’s value remains insufficient to support DCA, day trading is another option that you can leverage. Day trading comes from traditional banking markets. This means that trading opens only during specific hours of the day and halts at night. This technique uses price action and technical analysis to develop trade ideas to capitalize on market inefficiencies. While it can be more stressful and risky than most other techniques, its profit returns are also much more promising than others.

However, this technique is recommended for more advanced traders, considering they have a better understanding of the market dynamics and BTC’s price volatility. Day trading also requires quick decision-making, sometimes within minutes or even seconds. Reacting with such speed to market changes in real-time can also be stressful for a first-timer. If you wish to pursue day trading, you should work with a financial professional to make the most of it.

3.   Buy and Hold

HODLing is another investment strategy useful for Bitcoin and other cryptocurrencies. A strategy name devised from the misspelling of “holding” in an online forum, this is a passive investment strategy where you buy an asset and intend to hold it for a long time.

While it may take substantial time to make significant gains on your purchases, HODLng does guarantee that you will capitalize on an increase in your asset’s value. It is not subjected to the short-term volatilities of the market, so you can avoid the risk of buying low and selling high.

Endnote

Choosing a Bitcoin trading strategy that aligns with your financial goals is no small feat. The most common and popular techniques include but are not limited to, HODLing, day trading, and DCA. There are other strategies you can try, such as swing trading, high-frequency trading, or index investment. Be sure to talk to a financial professional before you begin your journey into Bitcoin trading. And make sure to analyze the pros and cons of each strategy, especially concerning risk management.