The Consummate Digital Currency Trading Guide



Digital currency trading a.k.a. cryptocurrency comprises Bitcoin and Altcoins.

As one of the hottest investment categories on the market, cryptocurrency has captivated the attention of traders around the world.

The explosive growth in 2017 alone is reason to stand up and take notice. Weiss Finance trading expert Pearson Montgomery advises clients to adopt a cautiously optimistic approach to trading digital currency.

Everyone is eager to jump on the bandwagon and cash in on this sizzling-hot phenomenon. However, it’s important to understand precisely what you are getting into with digital currency. It’s the technology that makes cryptocurrency trading possible that we should be looking at. Brand recognition is particularly strong for Bitcoin and this has helped it to maintain market dominance in an overly saturated category of Altcoin options.’ 

Bitcoin is but one of several hundred potentially lucrative cryptocurrency trading options. However, it’s imperative to have a clearly formulated strategy for entry and exit purposes. By mid-October, Bitcoin was prices at $4,760 per unit, approaching its all-time high of $5,000 + achieved earlier in Q3 2017. At the start of the year, it was at $997.69 per unit, and it is almost increased fourfold since then. The percentages speak volumes: 378.80% appreciation in less than 1 year.

But the performance of Bitcoin pales in comparison to that of Ethereum. At around $300 per unit, Ethereum has spiked from $8.16 at the start of the year for a 3,576% return on investment. Few Altcoin trading options can lay claim to such enormous growth, but Ethereum has bucked the trend from the outset. What is equally impressive about its performance is that the price has not dropped below $123 since mid-May, proving its resilience as a reputable cryptocurrency.

What Should Traders Be Aware of with Digital Currency Trading?

For starters, it’s important to know what your entry point is and what your exit point is. These relate to the prices for getting into trades and exiting. Many traders watched Bitcoin rise precipitously in August and September 2017, but the cryptocurrency is volatile. Therefore, depending on your entry point, you may not have generated your desired profits. For traders who bought and held BTC, ETH, LTC and other cryptocurrency options since the start of the year, the profits are phenomenal.

However, the inherent volatility of this asset category means that caution is the order of the day. Several useful tools are available to help traders lock in gains and prevents complete erosion of their capital. These include stop loss and take profit price points. Much like conventional trading with stocks, commodities, indices and currency pairs, trading tools and resources must be used with cryptocurrency.

Cryptocurrency can plummet hundreds of dollars in a single day, or appreciate just as easily. It’s a gamble at best since it is not regulated by any central bank or authority. The blockchain technology allows for relatively anonymous trading on the open markets, and all transactions are recorded in an online ledger.

Since there are no individual points of failure – the system works globally with multiple users and nodes, it is not subject to manipulation by individual market players. However, there have been hacks at Bitcoin exchanges, and other cryptocurrency Altcoin exchanges over the years. This nascent technology is constantly being tweaked and improved to iron out bugs and discrepancies in trading and pricing.

Pearson Montgomery advises clients to rack up incremental profits that accumulate into large profits over time, as opposed to looking for the rapid price movements and then bailing from the market. In any event, it is always advisable to only trade digital currency with money that is available, and not with funds that you cannot afford to lose. Remember, volatility is an inherent feature of digital currency trading. Everything hinges upon Bitcoin’s appreciation or depreciation. Watch BTC closely and you will see exactly which way related markets are going to move.

Source Article from http://www.hangthebankers.com/the-consummate-digital-currency-trading-guide/

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