People tend to make very stupid mistakes while trading Bitcoin OTC, which means over the counter trading. OTC Bitcoin trading is done when you want to place a very large order, having that said most of the people trade directly over OTC when placing large orders and place largely over the exchange can be a very expensive process. Though your objective is very clear and you want to save huge bucks by over the counter trading (OTC), but if not careful in this process, you may end up getting ripped off by the traders!
Here in this article, I am going to talk about the mistakes that you should avoid while Bitcoin OTC Trading! What are they? Let’s find out!
Mistake number 1: you go shopping around!
Ok, guys, this is Bitcoin trading. This is no vegetable or cloth shopping that you go around asking for the rates from the different traders to settle for the best one. In the case of Bitcoin trading, it may be used against you by the traders and they may interfere with the market value of Bitcoin and make it appear lower.
When you call the OTC traders asking about the rates, they may interact with the other traders and use this information against you. The other counterparty traders will remove their shares from the market making the market appear low so that can secure a more favorable price.
What to do instead?
Instead of shopping around, call maximum one or two OTC traders and that also when you are ready to execute the trade. Interested in Bitcoin trading? Visit the Bitcoin era today!
Mistake number 2: you showed broker your hand!
The thing is that you can never trust a trader. It so happens that when you call the trader and tells him that you want to sell your 1000 Bitcoins; you have already provided the trader with enough information to manipulate the market. As soon as you keep the phone, the trader will run to sell his Bitcoin. In such a situation if you go with the broker or any other broker, still the trader you spilled beans to will get an upper hand. In any situation, he will either buy bitcoins at cheaper rates either from you or from the market.
What to do instead?
Instead of telling how many Bitcoins you want to sell, ask the trader both the buying and selling price of 1000, 500 and 100 Bitcoins. This way not you but the trader will be forced to show his hands and you will also get to know what profit margins have the trader kept for himself.
Mistake number 3: Being too predictable!
OTC traders are clever people and they notice the pattern of the other trader’s behavior and use it for their advantage. After all, they are traders for earning a profit, right?
Say for example that you call the same trader every week 4 days in a month to enquire about the rate; they note your behavior and know that you are also in touch with other brokers for the best rate and so they give you the most attractive rate and try to bluff you.
What to do?
Never be predictable with your OTC trader, if the trader tries to bluff you by offering a price that is too good to be true, act smart and ask them to lock that price for you.
Mistake number 4: OTC Trading in a slow market day
Just because the OTC trader provides you with a price guarantee that does not mean that your investment is protected. The lesser active market can lead to a lower price for your investment.
Say, you want to make an OTC trade on Halloween day, there is going to be less activity in the market due to the festival, you may end up losing your money.
What to do?
Make sure that there is a decent level of activity before placing an OTC Trade.
L. M.