Top 6 Bitcoin Investment Strategies

Top 6 Bitcoin Investment Strategies

What is a CFD Bitcoin Investment?

Bitcoin Trading or a CFD Bitcoin investment is essentially a contract for difference that is made in the market. So, if you’d like to invest in a CFD, you would enter a contract in which you would either sell or buy a specific asset at a later date to a specific person. Now, during the time that you hold the asset, the price may increase. Thus when you sell it at the time that was specified in the contract, you would make a profit.

This works inversely as well. If you were to enter a contract in which you speculate that the price of bitcoin will go down. The contract would be to buy the asset at a later date. Now, if the price does go down, you will make a significant profit since the asset’s price is much lower than what they paid for. Hopefully, the asset’s value will increase thus making a great profit for you.

Going Long vs Going Short 

If you’re at all up to date with financial trading, you might be familiar with these terms. Active investors that purchase an asset with intent to sell it later, are going long. These investors speculate that the price will increase during the time that they hold the asset. Going short is essentially selling an asset with the intent of purchasing it at a later time. These investors speculate that the price will decrease during the time that they hold this asset.

You can properly speculate by reading up on many different market phenomenon and news. These usually affect the price of Bitcoin a lot, since it’s quite volatile. Thus, you can gauge the environment and think about where the price is headed in the near future. Be careful, you absolutely need to do your research before making a Bitcoin investment in CFDs.

Swing Trading Strategy – A great bitcoin investment

Swing trading is associated with developing an analysis of the price trends. When the price of an asset is increasing over time, there might be small swings or dips. Usually, these swings or dips recover quite quickly and the price of the asset continues to rise after.

Swing strategy refers to buying the asset at the bottom of one of these small dips, and to sell them immediately after. Since we’re working with CFDs here, that’s quite easy to do. You can set the time frame for a few minutes as the price rebounds. If the dip doesn’t result in a reversal, you have just made a nice profit since you sell at a higher price than what you bought it at.

These swings and dips mostly do not usually result in a reversal but might result in a reversal. Thus, you need to make sure you back your trade up with research and make an educated bitcoin investment.

Hedging

Hedging is definitely one of the most important tools in C trading, since one needs to implement risk management strategies in volatile times. Hedging in CFD trading refers to opening two positions in the market. If you were to make a profit on one trade, you’d make a loss on the other. For example, you go long and short on the same asset, which would technically nullify any losses or profits. Thus your total capital stays protected. This tactic rather than strategy is very important in volatile times to protect your bitcoin investment.

Plus500, the Pioneering CFD Platform

The Plus500 website is one of the most popular online CFD trading websites, this is because of several reasons; the website has real-time graphs of all commodities that one can trade and it supports over 23 languages. Moreover, the Plus500 website is reliable because it’s regulated by the UK’s Financial Conduct Authority, so your money is in safe hands!

For cryptocurrency enthusiasts, the website offers CFDs on Bitcoin and Litecoin, so you can now speculate or bet on how the cryptocurrency price will move. On Plus500, you can access their educational programs for free and make sure that you know where you’re investing!

That’s only the tip of the iceberg!

If you’re new to the Bitcoin investment world, this guide might make you think that you have all of the tools to make million dollar profits. Unfortunately, that’s not true, this small guide is only the tip of the iceberg so that beginners can get introduced to Bitcoin trading. There’s a lot of strategies that traders like to use in a CFD Bitcoin investment. Make sure you read up on all of the different tactics that traders use, it will only make your trades more logical.

We hope that this guide has been helpful if you’d like to invest in CFD trading.

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About Article Author

Michael Serrano
Michael Serrano

Michael is an engineer and a bitcoin evangelist. He has been involved in cryptocurrencies since 2013. His biggest wish? 1 billion users of bitcoin, ether and litecoin by 2020. In the last 10 years he has worked for various early-stage start-up as a back-end developer.

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