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Unfiltered

4 Mistakes You Better Not Make While Trading Bitcoin

Institutional investors and high-net-worth individuals (HNI) use over-the-counter (OTC) trading when they want to sell or sell a huge amount of cryptocurrency. The OTC broker will give you the worse rate and concentrate on more the money they can easily make.

They use different strategies to view your market and profit from you. These are some of the mistakes you can save yourself from:

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Shopped Around or Not

Most people believe that while trying to execute an OTC trade, the best way is to call multiple brokers and ask about the rates. Now as much as this seems like the right option, it is not.  You may go with the cheapest rates but you’re also letting people know about your trade. They might use your information against you. The best that you can do is avoid shopping around for rates.

What happens is that if one of the brokers you called were an inter-dealer broker, it will talk to the counter party for the trade, which will help remove their buy orders and appear the price of bitcoin lower. However, this is not the case and you will fall into the wrong hands. Better watch out! The only way you can play it safe is by calling not more than two OTC brokers, only when you are ready to trade.

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Don’t Be Predictable

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Consider brokers to be the masters. They aren’t but they can even exploit you with your behaving patterns. If you are behaving predictably with your OTC, you’re making a mistake. If you are trading every week, you will call the same few brokers and ask for the rate. As you do that, they are taking notes of your every move and they also know your very next move.

The same broker who gave you a good price rate which you might consider the cheapest of all, will gain your trust and exploit as you are more likely to execute your trade their the next time too. So don’t be so predictable and don’t be stupid. Always be ahead of others.

Buying or Selling the Full Amount

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Now as idiotic as this sounds, most people do this, and its nowhere near doing it the right way. If you’re trying to sell or buy 1,000 BT OTC, don’t stuff the full amount into a single trade. You’re more likely to earn a better rate if you sell 10 BTC, instead of 10,000 BTC. This also helps you get out of the risk, that is the price going way down and will lead to a loss.

So make sure you split your order into several smaller trades of 10 BTC each. It will be a slow process but it’s better than losing a good amount of money.

 

OTC Trading in a Volatile Market

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Now trading in a market which is volatile with high fluctuations in price is foolish. Don’t do it. We know you’re tempted because, during the periods of high volatility, there’s also a high level of activity. But the OTC brokers aren’t that easy to play with. They will charge a risk premium when they price a trade.

So if the market is volatile, you don’t know the brokers will charge a higher risk premium according or execute the trade as it is. This will only harm you so make sure you wait for the prices to stabilize before trying to execute your trade. Play it safe, kids.

Maira Zaheer

I love to write and channel my feelings into words. I'd like to quote my favorite author and poet. Who has taught me every word matters. “let me live, love, and say it well in good sentences” - Sylvia Plath. I'm here to fill your lives with some crypto-gossip. Contact the editor at editor.unfiltered@blockpublisher.com

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