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In 2017, a bullish cryptocurrency market led to an impressive $20,000 per Bitcoin, only for the consecutive bear market to bring down the price of Bitcoin to approximately $5,500 at the time of writing. Since then, many investors have been hesitant to approach the market, and often wonder whether or not trading Bitcoin is still a profitable activity.
The good news is that you can still trade Bitcoin profitably, as can be seen in the steady rise and falls in the price of Bitcoin over the past several months. However, in order to receive a profit from your Bitcoin trading activities, you need to make sure that you utilize the right bitcoin trading strategy.
Using A Short Selling Strategy
Volatility is a defining feature of the cryptocurrency market, and it is often a feature that worries traders, and prevents them from investing. However, this volatility that results in wild swings in prices can actually prove profitable to you.
How? It’s simple: all you have to do is use a strategy known as short-selling. Shorting the market involves borrowing a certain amount of an asset, selling it on the market, and then purchasing back the same amount later, once a certain amount of time has passed. If you time your purchase, and your borrowing time just right, you will be able to benefit from the decrease in the overall price of your Bitcoin.
This is because you only have to pay back the same amount of Bitcoin as you initially borrowed, leaving you with the difference between the purchase price, and the price at the time that you pay the loan back. This trading strategy is one of the best strategies to use if you are looking to leverage one of the cryptocurrency’s biggest weakness.
Making Major Moves By Scalping
Very similar to day trading, scalping is a trading strategy in which a trader carefully tracks the market, and buys low and sells high, whenever there is an opportunity to do so. Aptly named, “scalping,” is a cryptocurrency trading strategy that requires investors to be quick on their feet, to be very knowledgeable about the market conditions, and to be able to handle large volumes of cryptocurrency at a time.
While this type of trading method pays off, it requires you to be a regular trader, and you must make sure that you have brushed up on your trading knowledge, and can maintain focus. The slightest mistake can result in an enormous loss in profit. But if you can handle the pressure, and love trading, scalping is a strategy that will work well for you.
Profiting From Swing Trading
If you’re excellent at analyzing markets, making predictions, and understanding the many factors that affect the market either negatively or positively, swing trading may be the right strategy for you.
Swing trading is a strategy in which traders seek to take advantage of fluctuations in prices, often for longer periods than you would see in the previous method. This strategy requires you to be an expert market analyst in order to pull it off. But if you have the know-how, swing trading can work in your favor.
Despite what you may have heard, trading Bitcoin is still a profitable activity. If you are interested in getting started, take a look at these three great strategies to gain some insight on how you can begin investing in the market.