Trading cryptocurrency is currently one of the hottest trends in the investment landscape. Many are making money through business and for good reason. Cryptocurrency can be traded 24 hours a day and is not regulated by financial institutions in the same way that fiat is regulated by central banks. This eliminates issues such as price manipulation. Trading cryptocurrency is also relatively easy and there are many opportunities in the market.
For many traders, it makes sense to trade bitcoin which is one of the many cryptocurrencies out there. One of the main reasons for this is that bitcoin is one of the most volatile cryptocurrencies and also affects Altcoin's performance. This was evident at the 2017 cryptocurrency rally where most of the altcoins mobilized as bitcoin converged.
Getting into bitcoin trading
By now you probably know that some people who claimed to make millions after investing in bitcoin managed to make that money because they invested when the price of bitcoin was still low. Especially those who bought bitcoin before 2016 and were waiting for the price to reach epic heights.
Unfortunately, this was a one-of-a-kind opportunity for the cryptocurrency market and we saw a cryptocurrency crash in early 2018 and most of the gains were lost. However, you can still trade cryptocurrency but it is best not to speculate as cryptocurrency prices have now returned to normal.
Day trading bitcoin
If you monitor the price of bitcoin, you will see that it has significant volatility at any time of the day. This makes it an attractive asset to trade in such a way how foreign currency pairs usually have volatile movements, only in which case bitcoin can provide more volatility. So how does one take advantage of this?
You can use a bitcoin trading bot that will do the bulk of the work for you. Some crypto trading platforms promise to offer crypto trading bots that analyze the market on your behalf, execute trades and even close trades for you. All you have to do is set the parameters for your priority and the crypto trading bot will do the rest for you.
You should have a good understanding of how bitcoin works and what actually affects its price movements if you would rather trade on the bitcoin trading bot itself. The volatility of bitcoin is mainly due to demand. Wholesale buyers or large accounts have a significant impact on the price direction of bitcoin. You can identify the direction in which large accounts otherwise known as whales are trading and also trade in their direction. You can access that data on platforms such as Binance Futures in the sentiment segment.
Using technical indicators
As far as execution is concerned, you can use technical indicators to identify potential entry points. Note that indicators alone are not very reliable, thus they need to be aligned with other data, in which case, sentiment data would make sense on large accounts vs. small accounts. One of the best indicators available for trading bitcoins is the On Balance Volume or OBV indicator.
OBV is a great tool for forecasting strong trends. When the OBV aligns with the price of bitcoin for a strong bull or bear movement, it is best to trade the direction of that trend. You can also overlay the bitcoin chart and athorum for another OBV strategy. This strategy is called smart money divergence and is where both the price of bitcoin and athorum are behaving in a similar way but at some point, one fails to honor the support or resistance lines.
The above shows the money divergence, in this case, the difference between the prices of bitcoin and athorum pegged against the US dollar. Trading platform
You will need a reliable platform that provides access to key indicators and also a trading interface that traders look to meet requirements. Trailing Crypto is one such platform and the beauty is that you can switch from one exchange to another within your platform. It also provides the flexibility to select a wide variety of order types. It also uses two-factor authentication in the form of measures and security measures such as API keys to connect to various crypto exchanges. As far as assets are concerned, you can trade bitcoin pairs and other cryptocurrency pairs, so you have a good variety.
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