Bitcoin Trading Tips: 6 Essential Rules You Should Know Before You Start

Bitcoin is back in the news – and it's for good reasons, with the price of the digital asset trolling towards $100,000 for a single coin.

Bitcoin’s price is once again trolling towards $100,000 for a single coin. As the headlines grow wilder and more people start dreaming about trading Bitcoin for a piece of the pie, there are several essential crypto trading rules you should know before jumping on the bandwagon.

The desire to participate in Bitcoin trading is currently at an all-time high. Many more people are seeking out ventures to shape their pockets and create multiplication of their funds in times of scarcity. While there are many success stories of individuals who made huge gains while trading Bitcoin, you need to learn about the essential rules of crypto trading irrespective of your experience level. This is why we bring you important Bitcoin trading tips from experts to help you reach your financial goals.

Over the last few years, cryptocurrencies have transformed themselves from an overlooked digital asset associated with the dark world to become a wildly popular investment. Just like you can only drive a car safely if you learn from an approved driving instructor, you risk losing your funds if you engage in Bitcoin trading without learning from experts. While crypto trading seems like the future of tomorrow for some people, the truth is that cryptocurrencies are poised to revolutionize our relationship with money.

Digital assets have taken the world by storm and offered new investment opportunities besides revolutionizing how we think about money. If you’ve not yet invested in Bitcoin trading and if there are reasons to learn before you plunge in, there are compelling reasons to do so. Nonetheless, we believe you shouldn’t enter this dynamic market minus a well-thought-out plan, hence the need to learn these basic guidelines. You are in good company if your ears are itching to grip the nuts and bolts.

Are you a Bitcoiner or a No-Coiner?

The simplest definition of Bitcoin would be a digital currency not controlled by a central authority such as a central bank or government. Miners create coins to process transactions using computers and specialized hardware to secure the currency and collect Bitcoin as compensation. Bitcoin offers the best security for online purchases, thanks to Blockchain technology that records transactions in a public digital ledger.

At only 15 years old, Bitcoin is the oldest and most trusted cryptocurrency of about 9,000 cryptocurrencies worldwide by October 2024. It may have had a controversial and rocky history, but it also has a high profile of supporters. Regarding cryptocurrencies, the world is split into two classes of people: no-coiners and Bitcoiners. No-coiners don’t have Bitcoin because they can’t understand it unless they own and use it. Better still, they may need to mine it and get a taste.

Expert Tips for Bitcoin Trading

If you are considering becoming a retail cryptocurrency investor to diversify your portfolio, you will be up against a volatile market. The cryptocurrency market is reeling under losses occasioned by hacking and confusion about regulation. From a high of $20,000 in December 2017, Bitcoin dipped to $3000 in 2018 before rising again to $69,000 in 2021 and is now trading at close to $87,753 at the time of writing.

Suppose a crypto investment bug has bitten you, and you plan to invest in Bitcoin or other digital currencies like Ethereum, Litecoin, Ripple, or any other. In that case, you want to remember that “safety rules are written with blood for soldiers.” You are not dealing with human life but can avoid losing your Bitcoin by avoiding expensive mistakes. You can avoid making mistakes when trading Bitcoin and other cryptocurrencies by internalizing the following six tips “written in blood.”

1) Look before leaping into each trade

Enter each trade only when you have an apparent reason for starting and a clear strategy. Trading is a zero-sum game, for everyone who loses someone else benefits. There are large whales that influence Bitcoin trading and can place considerable blocks in the Bitcoin order book. Like real whales, they thrive on the mistakes of innocent small fish. While it’s good to trade daily, you are better off doing nothing and not earning instead of diving into a storm and losing your valuable coins. Since there are days you can keep your coins by not trading Bitcoin, always look before you leap.

2) Set a Stop-Loss Level for Each Trade

Start with a precise profit target level for each trade, but set a stop-loss level to cut losses. A stop-loss refers to the level at which you lock out more losses. There are essential factors to consider when setting a stop-loss level: don’t fall head over heels for trading or the coin and fail. Hoping against hope, it will turn around when all signs show the contrary is letting your ego take control of you. Unlike stocks, where 2-3% of movements are regular, cryptocurrencies can easily dump 80% of their value within a few hours.

3) Confront the Fear of Mission out (FOMO)

There’s