4 Tips for Trading Bitcoin (BTC) Safely

Do you have concerns about the safety and security of trading Bitcoin? If so, you’re like many others who sometimes shy away from this fast-growing market simply because they don’t think their money is safe. The good news is that you can make your crypto transactions as safe as anything else just by following a few guidelines. Here are four things anyone can do to boost the stability of their cryptocurrency portfolios, especially if Bitcoin is a part of the mix.

Do Research

This is a market where you need to do plenty of research. That’s primarily because everything is still brand-new, prices fluctuate a lot, and there are still some issues with wallet security. What’s the smartest way to proceed? You can consult a trading guide to understand more about what Bitcoin is, the factors that influence its price, and more.

Another aspect of research has to do with your own risk level. If you’re fine with reasonably high levels of risk, view the past two years of anything you intend to invest in, especially if it’s a crypto like Bitcoin. Yes, there have been a series of record highs set in the recent past. Look beyond the raw numbers and study what was happening in the economy when those surges took place.

Have a Plan

Even those who put all their money into traditional stocks and bonds go in with a plan. In the fast-paced world of crypto, that rule is even more vital. What does a Bitcoin plan look like? There are dozens of ways to approach the market for the leading cryptocurrency, but one of the safer systems is to use dollar-cost-averaging (DCA). Many investors in BTC use DCA to remove complexity and build their portfolio in a balanced, regular way. DCA is simply the act of purchasing exactly the same dollar amount of a security, or in this case a cryptocurrency, at regular time intervals. For example, someone using DCA would purchase a set amount of BTC every month (or week, or quarter, or year), without worrying about having to chase price movements.

Set Loss and Profit Targets

Setting profit and loss targets on every trade is a simple way to protect your capital. For instance, using a small-cap stock as an illustration, a person might buy 10 shares at $4, setting a profit target at $5 and a loss limit at $3.50. When it comes to Bitcoin, you’ll have to set your upside and downside to accommodate our personal tolerance for risk. Even so, one useful technique is to set profit targets higher, in amount, than lost limits.


If you hold a portfolio that is composed exclusively of Bitcoin, consider diversifying. This doesn’t mean you have to purchase equal amounts of other coins. Instead, you might wish to hold 80-90 percent of your crypto in BTC, and another 10-20 percent in other coins, like Ethereum or Litecoin. Diversification within the crypto niche can mean having to endure less volatility over time.