18 August, 2017
Precautions you must take while trading Bitcoins
The Bitcoin world is interesting and popular among many. It is also called as the ‘Gold Rush, ’ and so it comes with a great potential to gain profits but like in any trading business, the risk of losing this crypto currency is present. Everything is not safe, and you may face some losses. So to avoid suffering from those big losses, here are a few steps of precaution that one must take while trading-
- Like any other field, it is best to understand the concept of the Bitcoin system and come up with a trading system. Set your own trading rules as to when you should enter or exit the market, how to manage your money and stick to the rules. It might get tempting to disregard the regulations that you have set, but there are many who got greedy and got carried away and faced some losses.
- As the above point mentions management, keep in mind that in the trading business there is always the chances of loss as the world of trading can be unpredictable. So invest only the amount that you are ready to lose. Do not get tempted to invest with the money that you cannot afford to lose it. You can use a separate wallet for spending and the other to hold your Bitcoin savings.
- Store your Bitcoins either in your local wallet or your paper wallet for extra security measures. Do not store them in any of the online wallets because these are unregulated markets and you never know what will happen and anything can happen at all. So store them in your local wallet and place them online only when you are going to start the trading actively.
- There have been cases of web wallets being hacked so keep a limited amount of spending money in the wallet. In case the wallet is hacked then your amount of loss wouldn’t be as much. Also, another thing to always keep in mind is that the Bitcoin is all yours and all at your own risk so if ever there is a case of you losing the money fraudulently then you cannot ask for a refund or as such.
- When it comes to Bitcoin, it is best to trade in several digital currencies at the same time instead of investing everything into one because if the circumstance turn that the coin is unfavorable, you will still have the other coins that you have invested in, and this might help in maintaining the balance between the profit and loss ratios.
- To be in the trading business, you will need to learn the basics of chart reading so that it will benefit you by being able to identify the market trends. The charts can tell you the prices done at that particular time; it also includes the opening price, closing price, the direction of the price, the highest and the lowest price and the trading range.