Fear and Greed For all their technological sophistication, markets exchange driven by bitcoin primal human emotions. Great opportunities present when the market becomes irrational due to an abundance of fear or greed.

This frequently occurs following major price movements or dramatic news. At such times, weaker traders are overwhelmed by emotion and misprice their trades. Some traders will support whichever bitcoin 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. Exchange the strong correlation to past Bitcoin price bubbles. Smart investors build long positions when price is flat and public interest is low during zile stealth phase.

Traders thus attempt exchange profit from every phase of the cycle; a lot harder but zile far more profitable if achieved. Money Zile 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 exchange 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. A stop-loss is wisely placed on the other side of a level at which zile 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. Finally, know your breakeven point; the price at which you can exit a bitcoin without incurring any loss due to trading fees.