Bitcoin Core – Desktop – Windows – Choose your wallet – Bitcoin

Some traders will support whichever direction favours their pocketbook as if cheering their favourite sport team.

And the media and public figures can be just as irrational. Complete phase of the greed and fear cycle. Note the strong correlation to past Bitcoin price bubbles. Smart investors build long positions when price is flat and public interest is low during the stealth phase.

Traders thus attempt to profit from every phase of the cycle; a lot harder but also far more profitable if achieved. Money Management Perhaps the most important element of trading is capital preservation. Before undertaking to trade Bitcoin, consider how much money you can afford to lose before your current lifestyle becomes unaffordable.

Never commit any more than this sum to your trading account. If your trading is successful, the size of each trade in absolute terms steadily grows as your trading account swells. If unsuccessful, at least losses are kept to a minimum, which allows time to adjust your trading plan. Profit Targets and Stop-Losses Initiating a trade without a clear exit strategy is a recipe for disaster.

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A stop-loss is wisely placed on the other side of a level at which price has reversed previously, the more times the better. The converse of a stop loss is the profit target; the level s at which profit is taken when price behaves as expected.

Profit targets are best-placed slightly before previously significant levels. If price exceeds your expectations by penetrating significant previous levels and maintaining a strong trend thereafter, consider substituting your target s for a trailing stop ; this acts as a ratchet on your profits. Example of a successful long trade with target and stop set. Entry-point is the yellow oval.

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