What do you understand by Bitcoin Forex Trading Strategy

Bitcoin market – it is one of the market which is notoriously volatile that makes it absolutely vital for understanding the market before you work on strategy. There are some of the factors which can impact the cost of bitcoin are as given below –

  • Supply – The supply of bitcoin will be capped at 21 million coins but these are currently available for trading. There are some of the new coins are released by using the process of mining, with the rate at which they are created which is altered by bitcoin halving.
  • News – The public perception of bitcoin is vital to its price. There is any negative news which is very harmful the coin’s market value.

Bitcoin Forex Trading Strategy – It is one of the best bitcoin (BTC) trading strategy in which it is perfectly aligned for their own individual, goals, available capital and risk appetite. A bitcoin is a method to trade that covers the price points and discovers the best bitcoin trading strategies.

Introduction to Bitcoin Forex Trading Strategies, Technicalities and Charts

There are some of the strategies which have become popular with bitcoin traders are as given below –

  • Hedging
  • Trend trading bitcoin
  • HODLing
  • Breakout trading

Hedging bitcoin – In this type of strategy, if any person had already their own best bitcoin may consider hedging their bitcoin risk when they believed that there was to be a short-term decline in the market price. It is one of the practices of opening strategic trades for reducing the risk to existing positions.

You also had hedge an existing holding through opening a position to short bitcoin and involve selling the benefit for the current price in market as expectation will decline in this strategy. When market price lowers then you purchase again in reduce price and gain profit from the difference. It means that if any loss to our original bitcoin then holding would be offset by the profit for your short bitcoin trade.

There are some of the financial instruments traders can use to hedge their bitcoin exposure. However most of the traders choose to hedge with contracts for difference (CFDs). It is important to note that if you decide to hedge your bitcoin by using a short-selling strategy then there are several risks because it is an unlimited downside risk when you sell a bitcoin. There is no limit on the amount in which the market can move against you and as a result high risk of losses. Hence it is critical for risk management measures in place.

Trend trading bitcoin – It is one of the strategies that trending market reaches consistence higher highs or lower lows. This type of strategy is suitable for different timeframes that you believe the trend will continue whether its hours, days weeks and even months.  Bitcoin is also a trend which may experienced a huge flow  in popularity in the year 2017 that caused to reach as high of $19,763.50 in December in the same year. Trend follows strategies by using technical analysis for predicting the direction of momentum in market. If you believe that the price of digital currency will continue for moving in its current direction or to form a new trend then trend trading bitcoin involves opening a position.

There are some of the views for the traders can identify the direction of a market trend and its momentum which generally involves through technical analysis momentum.

HODLing – it is one of the popular bitcoin strategies to gain profit by using bitcoin. The word HODLing was first invented in the year 2013 when the price of bitcoin was reducing and a user incorrectly type “hodling” in place of “holding”. It is one of the strategies which revolve keeping a long position on bitcoin. When the price of bitcoin increases for a long period and return to the peaks to gain more profit. But this strategy may be result in losses. Hence this strategy is rarely recommended for the traders.

Bitcoin breakout strategy – This type of strategy is based on the idea that once a market breaks by a resistance level or key support. As a result major volatility will start. An individual works on bitcoin look to enter the market at these important points in order for riding the trend from start to end. Bitcoin traders will many times use volume levels as technical indicators and confirmation signals to identify resistance levels and support.  You can open a position once these levels have been identified.

14 Comments Add yours

    1. daneelyunus says:

      Thanks for tagging

      Liked by 1 person

  1. Aji says:

    At first I was confused when I read the HODLing strategy. But after reading your explanation, I now understand it.

    Liked by 2 people

    1. daneelyunus says:

      Thanks for appreciation and reading my post 😊

      Liked by 2 people

      1. Aji says:

        Yes sure, I like to read and discuss.

        Liked by 2 people

  2. You explained it really well about bitcoin trading. I really liked reading about bitcoin trading strategy.

    Liked by 2 people

    1. daneelyunus says:

      Thanks for appreciation and reading my post

      Liked by 2 people

    2. mattst55 says:

      I also love reading about trading tips. Also blogging about brokers

      Liked by 2 people

      1. daneelyunus says:

        Thanks for reading my post 😊

        Liked by 1 person

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