5 Crypto Trading Strategies You Can Use Today!
Investing in cryptocurrency is one of the popular forms of investment in the market. Even though cryptocurrency is highly volatile and considered a high-risk investment, there are countless ways to thicken your wallets.
Before investing in any market, it is important to have a trading plan. Your trading plan will define your every move and mitigate financial risks. Most beginners get excited and make hasty, impulsive decisions that can lead to financial loss. Crypto trading needs practice, it also requires patience and skills to know when to enter and exit the market.
Having a solid plan will ensure that you won’t lose your investment capital but trade cryptocurrencies for your benefit. If you are keen on signing up with a crypto exchange, here are the Best Crypto Exchange Australia that can work great according to your financial requirements
In this article, we will focus on certain crypto trading strategies that can help you make the most out of your investments.
It is one of the most well-known forms of trading as it involves opening and closing a trade at the end of the day. Since crypto markets are open 24/7, 365 days a year, day trading is a bit different compared to regular markets.
Often called the short-term trading style, by strategically monitoring price movements in the day, you can capitalize on profits.
Through a careful technical analysis of the market, day trading in cryptocurrency can be quite rewarding and profitable. However, since it requires certain skills in a highly demanding environment that come with high risks, it is best recommended for seasoned or advanced traders.
This type of trading is ideal for beginners as it involves positioning yourself according to a particular trend. Now, this does not mean that you invest in the first trend that you find. There are several factors you must take into consideration before investing in a crypto trading trend such as trend reversals.
Since directional trends can be either a long position or a short position, you must prepare yourself for every possibility.
The fact is that trends change and being on the wrong side of the trend won’t do you any good but also affect your wallet. For you to be successful, you must incorporate technical indicators such as moving averages, trend lines which are said to increase the chances of your success and mitigate risks.
While technical analysis helps in day trading, fundamental analysis is a must for trend trading.
Scalping is known as high-frequency trading as it focuses on making smaller gains, multiples times a day. As a scalper, you must learn to take advantage of inefficiencies in the crypto market and exploit them. These gaps allow traders to profit over a short period of time and sometimes even in seconds.
In order for you to make the most of this quick trading strategy, you must be well-versed with the cryptocurrency market. Exploiting these gaps in liquidity requires a certain amount of skill, knowledge, and the ability to predict outcomes.
That’s why it is more suitable for an experienced trader. Due to its complexity, these small profits can add up to a higher percentage of profit over time.
Swing trading is an excellent strategy for beginners as it allows traders to conduct both technical and fundamental factors of the crypto market. This strategy allows traders to ride the volatility of the crypto market and swing prices to their advantage.
While most people are long-term traders who swing, it is important to execute the right decisions at the right time.
Since the market is unpredictable and unsure at times, you can use both technical and fundamentals such as technical indicators which can help make an informed decision. A great benefit of swing trading is that you do not have to make quick decisions. In fact, you can watch the trade unfolding and plan your decision accordingly.
You can even consider using automated trading which allows beginners to use this strategy successfully. And if you want to know more about swing trading and scalping differences then check out VectorVest.
Buy and Hold
Buy and hold trading is exactly how it sounds. This strategy is great for beginners as traders can purchase and hold their investments regardless of the fluctuations of the market. The objective of this strategy is to just enter the crypto market and hold a large sum of assets for a long time.
People who use this strategy are focused on long-term investment portfolios. Similar to day trading, you won’t have to dwell on technical indicators but you also don’t have to react quickly or hastily as it is a long-term investment.
Keep in mind, cryptocurrencies are risky, and choosing the right platform is necessary to mitigate any financial risk. The easiest solution is to choose a trustworthy and credible crypto-asset such as Bitcoin so that your investment will be safe.
Understanding the crypto market is essential before you make any kind of investment. By using the aforementioned strategies, you can gain some trading knowledge and experience which can help you in the future.
Keep in mind that these trading strategies keep evolving so you must learn to adapt to the crypto space as well as your trading methods to make the most of your investment. If you are new to cryptocurrency, this guide will help you get started in crypto trading.