Bitcoin, officially launched in 1009 has attracted a surge of attention and savvy investors are out to make a kill. The main attraction towards its trading platform is its volatility, which is much more than anything experienced in the trading market in recent years. As investors seek increased profits, they need to be cautious and strategic. While these strategies do not guarantee profits, most of them increase your odds. Check out some of the strategies used my most bitcoin investors around the globe.
Buy and hold strategy
As the name strategies, investors using this strategy buy bitcoins and hold them for some time hoping that the value of the bitcoin will rise. The volatility of the bitcoin is usually a major point of concern and investors using this strategy tend to be more disciplined. This strategy is highly preferred due to its passive nature and is bound to outperform active strategies in the long run.
Day trading is preferred by traders who seek to make money by taking advantages of priced changes of investment during the same day.
This trading strategy is quite popular. It is however not as popular as the first two strategies. Ideally, a small fraction of bitcoin traders will divide the portfolios into two parts. As such, the will hold the first part and will set aside the other part for day trading. This way, they are assured of making a profit when the prices rise and regret less when the prices fall considering that they will have cashed some of their investment.
This trading strategy is a favorite to many traders operating in the Silicon Valley. This approach mainly involves investing small amounts of money on multiple startups in the initial phase of their development. Most investors understand that most startups will fail but believe that they will be able to recoup their investments and make profits from the few winners.
It is evident that each trading strategy holds its unique pros and cons. The volatility of the bitcoins means that they is no silver bullet in this industry. You only need to pick a strategy that seems right to you and stick to it.