Bitcoin Trading Strategy for Passive Investors
To understand Bitcoin’s passive investment strategy you need to first understand what is meant by it. Passive investments strategies refer to cost-effective strategies in which investors participate for the long-term. The idea behind passive investment is to minimize the speed of buying or selling and to maximize returns. Self-directed retail investors can access cryptos easily but advisors are not allocating client portfolios to cryptos for lack of regulatory structure. So, it may be some time before advisors recommend cryptos as something more than simply speculative investments. Crypto traders must choose the best crypto exchange to trade. The reliability of the exchange will assure the safety for the assets. Traders may check the Bitpanda exchange to find the best features they offer for trading.

Cryptocurrency is seen as investment, but whether it is passive or not remains to be decided. Most financial planners feel it is not since you cannot predict its growth and liquidity. For instance, when China declared a crackdown on crypto activities, values of almost all cryptos tanked.
MACD or Moving Average Convergence Divergence is unarguably one of the best-known indicators used by the tech community. Investors who make trade decisions on technical analysis use this indicator. The idea behind MACD is that it allows traders to find momentum in trends. For investors who are not familiar with equations, understanding this indicator may be hard. It is mainly described as a relationship between prices of two moving averages.
The kind of moving average an investor will use decides the final profit and loss. Usually settings are calculated when you subtract a 26-day EMA from the 12-day EMA. The signal line refers to the 9-day EMA of MACD; when this crosses the MACD from top it indicates a sell signal. If it crosses MACD line from below, it indicates a buy signal. However, this may not be true for every investor because everyone has different sizes. The trick is to customize technical indicators which work best. Your job is to identify a time frame that suits you best. You must then choose a trading strategy which has proven to work best for that time frame. Following this, you need to keep tweaking and fine-tuning that strategy further. Along with choosing the right strategy, the traders must also find the right opportunity to execute trades. Trading bots can help traders to monitor the market to find trading signals. Take the Bitcoin 360 AI test to find out how trading bots use AI technology to improve trading.

Types of Strategies that Passive Investors Choose:
- Portfolio Rebalancing: This portfolio strategy has been around for years and rebalancing a portfolio implies maintaining a preferred set of allocations. Rebalancing lowers risks by accepting profits from well-performing assets and then distributing this across the remaining portfolio.
- Periodic Rebalancing refers to a strategy for re-aligning the portfolio with target allocations across a set time-interval. This may include portfolio allocation, asset deviation, scheduled rebalance, etc.
- Threshold Rebalancing makes use of deviation bands to identify when rebalance must be done for a portfolio.
- Dollar-Cost Averaging refers to injecting new funds periodically into the portfolio. This is continuous investment rather than trying to time markets right by reading charts.
- Portfolio Stop-Loss helps investors prevent downside risks. Portfolios may suddenly drop value in a volatile market. So, if you use a stop-loss you can control the loss.
- Buy & Hold: Finally, passive investors use this strategy to buy coins and hold onto these for the long haul. This simple exercise is called hodling and it does not involve active trading.