7 Key Considerations While Trading Bitcoins

Is trading Bitcoin easy? This is a question that most rookie Bitcoin investors and traders ask themselves. But the truth is trading of crypto coins are anything but easy as the crypto market behaves very differently from the traditional stock market. The Bitcoin is speculative and it is this very nature of the coin that attracts investors by the millions. But while the coins can deliver some fabulous returns on your investment, they can also culminate into inexplicable losses at times. Here are some of the important things to bear in mind when you are trading Bitcoins:

1. To begin with, the Bitcoin is very volatile. This is what you have to consider because this crypto asset has witnessed some major price swings in the past, and investors should know of these huge spikes and notable declines. In 2017 for instance, the prices rose tremendously and then plunged afterwards. According to Charles Hayer, CEO of CryptoCompare, the manic upward swings will be followed by a downturn when the sentiment changes. This sudden rise and fall in Bitcoin prices in 2017 has not been the only incident. It had happened even before this in 2013.
2. Another important thing to remember when trading Bitcoins is that there is no replacement for research. You must do your homework before you invest in Bitcoins or any other crypto assets, instead of going by what people say or relying on rumors. If you are planning to use trading bots like bitcoin era app you will have to be aware of how the autonomous trading is carried over.
3. Every investment is risky to a certain degree and with Bitcoins; it is obvious that the risks are greater. Investors have to be mentally prepared to lose everything if things go south. All market regulators and analysts warn investors about such risks specific to the Bitcoin. According to William Galvin, Massachusetts’s Commonwealth Secretary, the Bitcoin is only the latest in a long line of speculative bubbles which burst most often and leave the common investor with worthless products. Keeping all this in mind a Bitcoin trader must carefully weigh the risks and refrain from using money for investments that he is not in a position to lose.
4. When you trade Bitcoins it is wise to diversify your portfolio and keep your money across multiple exchanges. This will ensure that in case any of your assets fall in value, some other asset will undergo a price increase. To make the right choices, you must consider the performance of multiple crypto assets.
5. When trading in Bitcoins a trader must choose the right exchange. This is because of the fact that there have been many incidents of exchange hacking in the past. The Japanese exchange Coincheck hack was followed by Mt. Gox in 2014 that caused many people to lose their crypto assets.
6. It is best to use wallets if you trade crypto coins. You can choose from different types of wallets; the ones that are more technical are usually the ones that are more secure because they have more sophisticated security measures. Hardware wallets are a good choice as you have both private and public keys in your control. Since information in hardware or offline wallets is offline, hackers cannot target these. Web wallets and mobile wallets are not as safe and vulnerable to hackers.
7. When you are into Bitcoin trading you can use different security techniques for storing the coins. A popular approach is the dual-factor authentication where there is additional security layer besides username and password.