Everyone is aware that the pandemic has taken the global economy by surprise and sent massive shockwaves through it. Volatility has been at an all-time high and there have been dramatic price swings every day. With the world taken hostage by the Covid-19 outbreak, investors are justifiably panicked and extremely nervous. So, it is important to have a plan of action in place to handle the risks that this economic catastrophe poses before us.
One thing to remember is that people have been in a similar predicament even before this. The reasons for the earlier crisis may have been different but depression and recessions are inevitable and integral to natural economic cycles. So, the trick to trading Bitcoins during the pandemic is not to let your emotions get the better of you. You should never make decisions out of fear. You should be confident in trading Bitcoins and reputed softwares will boost your confidence. Go through https://bitcoin-profit.org/, which contains information of making profits out of Bitcoin trading. You need to keep investing for your retirement. You may feel scared to see your net worth falling continuously but the idea behind a retirement fund is to make sure it keeps growing your funds over the years. Your hedge fund manager will advise you to buy Bitcoins because cryptocurrencies in general will remain the true uncorrelated assets and their value will not be decided by the same factors as other investments.
1.Stop-loss orders: You need to pull out the stops. The useful stop-loss order will help you avoid margin calls and excessive losses. This has always been one of the best risk-management tools even in normal market conditions. As the pandemic rages, volatility is high and placing a stop-loss order may prove to be a point of concern for traders. Bitcoin traders can try to overcome this by widening stop distance. However, the downside of this strategy is that it also escalates risks in case the position size remains unknown. Traders will have to tweak their beak-even strategy. Now, positions require extra room to breathe. So, price movements should connect with entry prices many times before a position can be agreed upon. Your job is to safeguard the profits as and when they happen. So, a wise crypto trader will respect profit targets. He will use a trailing stop-loss order to ensure that a winning position does not get wasted.
2.Leveraging: Most Bitcoin traders will be employing leverage for getting higher returns. When there is high leverage there are higher profits, as happens in stock trading. But the downside is that losses ae also equally possible. So, traders must adjust leverage to accommodate wider price movements.
3.Duration of trade: Since the pandemic is the first of its kind that the world has faced, every trader is in an unfamiliar and unknown terrain. There are hourly news reports about the ongoing crisis and traders should stay plugged to such news to track open positions. Since monitoring day and night is a challenge, most traders are now liquidating positions before the day closes.
4.Lowering equity risk: Bitcoin traders are also doing trades with smaller risks. For instance, if they have been risking 3%-5% of their account equity for every trade, they will now cut it down to 1%-2%.
5.Order types: While the market order gets executed right away the limit order goes through when the limit price has been achieved. The latter will happen only when conditions are met. So, this helps to protect a trader from the volatility. Besides, trades can also conduct multiple trades at the same time in different markets every time opportunities arise.