Bitcoin is one of the most popular cryptos in the world. Its volatility creates opportunities for profit, but also means that traders carry a lot of risk. That’s why it’s important to have a solid plan in place. Let’s take a look at four bitcoin strategies.

HODL Strategy: Its name is derived from a misspelling of “hold” on a popular cryptocurrency forum, and it is now often said to stand for “Hold On for Dear Life”. This strategy revolves around maintaining a long position on bitcoin, in the hope that it will increase its price over the longer term. Remember, bitcoin is notoriously volatile, and any strategy could result in losses. This is why it is always important to have a strict risk management plan in place.

Hedging Bitcoin: Hedging is the practice of opening strategic trades to lower or eliminate the risk to your existing position. Let’s assume you own some bitcoins, but you are concerned about a potential short-term drop in their value. So, you decide to open a short position on bitcoin to offset any losses in your original holding. If the price of bitcoin does drop, the profit from your short position would help offset the loss of your holdings.

Trend Trading: A trending market is one that reaches consistently higher highs or lower lows. Trading bitcoin trends involves two steps. First, identifying the direction of a market trend and its momentum via technical analysis. And, secondly, opening a position when you believe that bitcoin’s price will continue to move in its current direction or is about to from a new trend.

Trading Breakouts: This strategy involves entering the market within a trend’s early stages as soon as the bitcoin price breaks out from a previous range. Traders using this strategy will look for price levels that bitcoin has trouble breaking, known as levels of support and resistance. They may choose to open a long position if the breakout is above a resistance level, and a short position if the breakout is below a support.

Before you start trading bitcoin, remember that you need a solid understanding of the bitcoin market. There are a lot of factors that can impact bitcoin’s price, including its supply, regulation changes, security hacks and macroeconomic news releases.