Top Bitcoin Trading Strategies Explained


In 2020 Bitcoin is still a valuable commodity and when traded properly can be extremely valuable. IF you want to invest and begin trading however there are a number of things you need to do, and the following is a guide to each strategy that may work for you.


No that isn’t a typo, Hodling was a term first used back in 2013 on the Bitcointalk forum, when a trader misspelled the word hold as he was stating that he was remaining in the market. This misspelling was due to new traders being warned to hold their bitcoin rather than trading it all in one go. This term HODL or HODLing is now used to maintain a long position in bitcoin.


Bitcoin is unpredictable and you can easily lose money on trades if you’re not too careful. Hedging is the practice of opening strategic trades to decrease or remove the risk to existing positions. You can do this in a number of ways. Hedge an existing holding by opening a position to short bitcoin. Sell your asset for the current market price and wait in anticipation that it will decline. By waiting for the market price to fall you are then able to re-purchase it for the lower price and therefore making a profit.

However, the price can go up. If you use CFDs (contracts for difference) to hedge, you’ll be able to hold and wait in anticipation that the price may go up while opening a CFD will bet on the price dropping. Therefore, no matter which way it goes the CFD will offset the loss, making you gain Bitcoin.

Using Bitcoin futures to hedge will also work. This is a contract made between two parties, they will agree to trade their Bitcoin at a specific price for the future, no matter the worth of Bitcoin on that particular date, you will still make this trade and either gain or lose.

Trend Trading

Keeping a close eye on current trends is important, that’s what trend trading is specifically all about. By watching the Bitcoin market closely and following what everyone else is doing you can gain money. An example of this is when Bitcoin rose in popularity in 2017, as a result its value increased significantly. Because it received tonnes of publicity and people were talking about it nonstop its demand went up. This of course increased its value and therefore the worth of Bitcoin grew. Trend following strategies are vital to watch and plan ahead. This is tricky to complete but by using technical analysis indicators and being aware of the market will lead to you being ahead of other traders, some of the indicators include relative strength index (RSI) and moving averages over time. Research this as much as you can to prepare for the next big thing in Bitcoin.

Breakout Trading

Just like trend trading breakout trading involves watching the market strategically. Aim to sell or buy Bitcoin at the beginning or at the very end of a trend. To successfully do this you need to understand the support and resistance levels or as they’re often referred as – the floor and the ceiling. Usually these price points won’t drop below or rise above in Bitcoin. When these ‘breakout points’ are broken you can expect Bitcoin to become unstable. When this happens, just like in trend trading, you need to watch what happens next and strategize. Using volume levels, RSI or the moving average will help to identify the support and resistance levels. Going forward with this you’ll be able to make a bid at a specific price point.


Trading with Bitcoin is not without risks as all of the above strategies carry some, by remaining vigilant and keeping a close eye on the Bitcoin market you could be successful in making the right decision. Before you make a decision on which strategy to use make sure to do your homework, there are many resources out there that cover each strategy more in-depth which is worth your time and energy if you want to be successful with your trading. Make sure to plan as much as you can before you commit to a strategy and spend your Bitcoin too early. The loss could be irreversible.

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About Author


She is a writer, organizational consultant and an executive coach with more than 10 years of experience accomplished. You can find her writing at Jacobs has spent years developing the performance of teams, organizations and other executives. With this experience she had also been involved with a number of initiatives for personal development, team building exercises, facilitations and organizational designing.

Disclaimer: All content found on is only for informational purposes and should not be considered as financial advice. Do your own research before making any investment. Use information at your own risk.

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