Cryptocurrency trading is volatile, with short-term price movements driven by speculation and hype. People who trade bitcoin successfully may make thousands of percent returns in less than a year. Visit the Bitcoin World Capital to become an independent and successful bitcoin trader with the help of exerting advice, best trading tools and market analysis. The extensive range of cryptocurrency values and substantial volatility makes it difficult for newcomers to grasp what’s happening.

1. Some cryptocurrencies are scams/frauds

Make sure you thoroughly analyze the team behind the currency, their background and experience, and most importantly, look at their whitepaper and other supporting documentation. Check all sources – are they reliable? Did an ICO fund it? Is the development team well-known in the field? Research everything about it, and if possible, try to speak to people in the know. A genuine coin gets its legitimacy from who created it and what purpose it’s aiming for – not from whether its price is going up or down.

2. You’ll need time to research and study

Most cryptocurrencies are either in a very early stage of development or not yet available on exchanges. As a result, studying their price, ROI (return on investment) and other relevant information is difficult. Therefore, you’ll have to spend time testing out the coins before you decide whether to invest in them or not.

Acknowledging the mandatory prospects of the cryptocurrency ecosystem can help you predict the movement of a digital currency in the long run. Moreover, you will be able to determine the factors affecting the price of a particular coin; for example, in the case of bitcoin, it is supply, demand and media hype.

3. ICOs are a very misunderstood industry

Firstly, ICOs are completely unregulated. There have been many instances where scam ICOs have run off with investors’ money in the past year alone – you never know who created these coins and how they intend to develop them into an actual product. Research their developers, background and experience, and most importantly, look at the whitepaper. When reaching out to join a coin’s ICO, ensure you’re clear on what they intend to do with your investment money.

4. Bitcoin trading strategies are crucial to fortune:

Although crypto-trading is very volatile and risky, many people make millions of dollars every year by getting in at the right time and selling off their coins at the right price. Learn how to research and learn about cryptocurrency trading, and you will be one step ahead of the game.

For example, with Bitcoin’s price fluctuating between $8000 and $50000 within a month, it’s difficult for newcomers to grasp what’s happening in this market. Before you start trading in bitcoin, you must acknowledge which trading style suits you the best. Then, according to your risk tolerance and profit goals, you can adopt the popular trading strategies and adapt them to your cryptocurrency trading journey.

–  Day trading:

Day trading is mainly for short-term speculation, which means holding the trade for just a day or even half a day. It works well in cryptocurrency trading because of fast price movements and high volatility. In addition, day traders usually have good knowledge of technical analysis of charts, which helps them to predict the movement of currencies.

– Position trading:

Position trading is a long-term investment in cryptocurrencies like bitcoin or any other cryptocurrency. It’s different from day-trading as you buy at one point and sell it after some time when it reaches the target price you have set beforehand. There are two main types of position trading:

–  Shorting:

Shorting is a form of position trading that differs from day trading. Shorting refers to selling an asset and using borrowed capital to repurchase it at a higher price. For example, short-selling means finding others willing to trade your cryptocurrency for fiat currency (official government money) or another digital currency at a lower price and then returning the favor by buying BTC or other cryptocurrencies on the open market later at a higher price. The difference in prices between these two trades is your profit minus fees.

– Scalping:

Scalping-related strategies involve following price movements of currencies over short periods. For example, when bitcoin trades at $50000, a trader might purchase bitcoin for $5000, wait for that price to fall to $4000, and then sell it again later when it reaches the target price of $4500. By doing this, you can make more than one buy and sell order in a row without selling at a loss, so as long as you manage your risk well by setting tight stop levels and taking advantage of arbitrage opportunities.

5. The cryptocurrency ecosystem is developing very quickly

The cryptocurrency market is still tiny, but it’s multiplying. Most currencies are either in a very early stage of development or not yet available on exchanges. It makes it difficult for newcomers to study their price, ROI (return on investment) and other relevant information. It’s important to note that most digital coins aren’t worth 100 times what they were 24 hours ago.