The Best Bitcoin Trading Strategy – 5 Easy Steps to Profit

Nowadays, cryptocurrency trading has become a common way through which many people make money. Despite its potential to offer you lots of money, cryptocurrency trading can be quite risky. Hence, you can potentially lose a huge sum of money from Bitcoin trading. Therefore, if you want to go into bitcoin trading, it is paramount to learn the best strategies that you can use to be profitable.

In this post, we will explain 5 proven and easy steps to make a profit in bitcoin trading.

1. Use HODL

In cryptocurrency trading, HODL is known as the misspelling of the word “HOLD”. If you are using this step for trading, you just need to buy Bitcoin when the price is down a bit and hold it for future profits. It is a common strategy that many crypto traders use for Bitcoin and other digital coins.

When using HODL, you should note that the benefits and risks are numerous. You can make lots of money from holding to a coin for long or lose everything. This step doesn’t require you to utilize a stop-loss or another strategy. You just need to buy and hold Bitcoin until the price increases significantly in the future.

2. Try smart trading

Another powerful and profitable step you can use is smart trading. Generally, this method involves the combination of take profit, trailing stop-loss, stop-limit, and other varying smart orders. You can experiment with the combination of different smart orders until you find something that suits your need. Through this strategy, you will be able to manage the risk and returns of your trading activities to a large extent.

Notably, the stop-loss strategy will help you to minimize the losses you can experience when trading Bitcoin. Otherwise, take profit ensures that you can earn profits whenever the trend favors you. The good thing about smart trading is that it can be automated. Hence, you don’t need to spend lots of hours on any Bitcoin trading platform before using it.

3. Take advantage of smart money divergence between the prices of Bitcoin and Ethereum

For the next three steps, you need to create 3 charts – Bitcoin chart, Ethereum chart, and OVB chart. Now, you have to find smart money divergence between the prices of Ethereum and Bitcoin. Basically, smart money divergence takes place when a digital currency doesn’t follow the action of the other one.

For example, if the price of Ethereum increases drastically but it doesn’t affect the price of Bitcoin; then there is a smart money divergence. Normally, the prices of Ethereum and Bitcoin should follow the same pattern. If one increases, the other should also do so. Therefore, a divergence can help traders to get lots of profit.

4. Check out for the OVB

Once there is a divergence, you should expect the digital currency lagging to also increase soon. Therefore, buying it can boost your cryptocurrency balance. However, don’t be in a rush to buy any currency. You should check out the OVB to see any boost in the direction of the trend.

Since OBV is used as an indicator, it helps you to know whether people are buying or selling Bitcoin at the period. If the price of Bitcoin is not increasing while the price of Ethereum is increasing, you should see that the OBV is following the trend. If this is the case, then it may be time to buy Bitcoin.

5. Place a buy limit order

If the OBV indicator has increased in line with the trend, you should consider placing a buy limit order. The order should be placed at the resistance level as you expect a breakout in the price of Bitcoin. In many cases, Bitcoin price will increase after order, and you will be in a lot of profits.

Nevertheless, you need to be careful as the trend may not continue for a long while. Therefore, it is essential to have both stop loss and take profits in place. Generally, the stop loss should be kept under the breakout candle. This strategy will minimize the amount of loss that you can experience while trading.

The next strategy is when to take profit. Basically, you should set the take profit when the reading of the OBV indicator is more than 105,000. Before you start losing some of your profits, take them.

This strategy can also be used for selling Bitcoin if its price falls below a resistance level whereas the price of Ethereum doesn’t.

In conclusion, Bitcoin trading can be highly profitable if you know what to do. Therefore, you should consider diversifying your trades and stay in tune with the latest news, trends, and technical analysis that affect Bitcoin. Over time, you are likely to take advantage of the market to earn some money.