February 10, 2022

Binance, How to make daily profits on Bitcoin's volatile market?

Bitcoin has the most volatile market price movements in the history. Do you know how to take advantage of it?

How-to-make-daily-profits-on-Bitcoin's-volatile-market How-to-make-daily-profits-on-Bitcoin's-volatile-market

Is making profit daily on Bitcoin possible?

Finally, Cryptocurrency trading has become like Forex trading, but with much more volatility.

A higher volatility means more chances to trade every day.

In fact, the trading volume of Cryptocurrency has been surging recently and day traders prefer Cryptocurrencies to Forex pairs these days.

The trading volume of Cryptocurrency has reached more than billions a day because of the great price volatility.

Trading Cryptocurrency daily has become a trend and there are many traders making a larger amount of profit.

In this article, we will explain to you more about the concept of day trade using the high volatility of market prices.

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Increase your profit when market volatility is high

The good thing about volatility is that you can profit from it. The price has a fast movement, so your profit can be bigger. But nothing comes as free as your lunch because high volatility comes with big risks. We’ve rounded up some important tips that can help you fall into the trap.

We divide this tutorial into 2 parts, namely: do’s and don’ts. Let’s start with what you should do when the market has high volatility.

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Utilize take profit and stop loss

There is a wide range of volatility in the market, thus requiring different trading strategies as well. Imagine you want to trade long term, then during this period the price may fluctuate several times. If you have set your take profit/stop loss, it is very likely that the rapid price movement touched your take profit/stop loss several times, thus preventing you from getting a bigger profit. Logically you should increase your take profit and stop loss to stay longer in the market while making more profit.

Attention: During high market volatility, you will see profits on open orders increase and decrease very quickly. It is important not to panic, choose your target market wisely and wait until the market price hits your target.

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Minimize loss

In the previous section, we explained that you must increase your stop loss to survive high volatility. But in this way, you may have to change your trading goals first.

Imagine the price is actively moving but you are not sure about the next move. Maybe the price will go down and then go up again, or maybe the price will go down and not go back up. This will make you not want to take risks but of course, you also don’t want to miss the opportunity to make a profit. If you want to catch a swing from a certain price, then please place a stop loss near the price so you can minimize losses if the market does not move according to your prediction. It will also help you get high profits if the high volatility of the market moves according to your predictions.

Do you now see the difference between the scenarios of increasing stop loss and reducing stop loss? Your trading strategy determines your trading action!

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Always know the Resistance and support levels

Resistance and support levels are key for traders. Traders usually use this to determine when to enter the market, reverse trends, and points to exit the market. This level becomes more important because a break of this level can cause a very large price movement in the opposite direction.

The market is bound to be chaotic when this happens, but you have to stay calm. You can follow the break when other traders panic. This is a big bet: when the market is in turmoil, the resulting break may be false and the price will return again. But if the break actually occurs then you can get a big profit. In fact, when you are willing to bet big and look very ambitious when the market is chaotic but your prediction is right, then you can get a bigger profit. Stop-loss in periods like this should be small. When the market moves according to your prediction, then you can move the stop loss to the breakeven point, and increase the stop-loss after the price touches your take profit target.

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Diversify portfolio

Diversification is the key to profiting from trading because you can never be 100% sure of the price. Therefore you must diversify your investment. If you experience a loss trading in one currency pair, then there is a possibility that you can profit from trading in another currency pair.

In periods of high market volatility, this rule works very well in increasing uncertainty in the market. It is rare to see several currency pairs have such high volatility at the same time. Invest in unrelated currency pairs, so if you experience a loss in one currency pair due to high volatility then you may be able to cover it with profits in another currency pair.

Trade Bitcoin on Binance

Get rid of the unnecessary

Technical indicators are very helpful for traders, they can determine the main price levels, give predictions where the next price movement will go, give clues about trends, etc. However, the indicator only works very well when the market is moving as usual. Indicators can fool you when market volatility is high. When the market is surprised by an event and there is a big move, then no single indicator can predict it or react quickly to the situation. It would be wise to omit the price chart from the indicator when market volatility becomes high.

The only indicator that might be able to help you when market volatility is high is Bollinger Bands because the idea of ​​this indicator is simple. When you see the 3 lines of the Bollinger Bands indicator are narrowing, it is a signal that the price will jump.

One more important thing you should add is “look wider”. Never use a small timeframe when market volatility is high because the market becomes very active. The direction of a small timeframe can change several times in a short period of time, leaving you confused and increasing your losses. Use a larger timeframe because it will allow you to see more clearly and understand the situation better.

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Don’t hurry for profit

When market volatility is high, it is very likely that you panic and do crazy things. Do not do it! Panic will only make the situation worse.

Remember the main rule of trading: you can never change the price.

If you see the price going up/down very quickly, don’t try to determine the highs and lows because you will never be able to pinpoint those points with accuracy. What you need is to set your stop loss and take profit wisely. As a result, you can increase profits, and also reduce losses from trading when the market moves against your predictions.

The conclusion is that we can say that trading when the market has high volatility is very interesting. That is the key to getting big profits: but also full of risks of course. That is why only traders who already have a lot of experience can be successful in trading at times of high market volatility. Improve your trading skills first if you want to trade when market volatility is high. Read the guidebook to become a professional trader!

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