Crypto Trading Strategies You Need To Know
Crypto Trading Strategies
Modified Date:- Published Date:-Categories: Cryptocurrency
Crypto trading strategies you need to know
Let us start by going through strategies that can help you get favourable returns.
Day trading
This trading strategy involves taking positions and exiting on the same day. The aim of a trader while adopting such a trade is to book profits amid intraday price movements in a cryptocurrency of his choice.
Range trading
Market players also rely on experienced analysts, who give out support and resistance levels each day. ‘Resistance’ refers to the point up to which the price may rise and therefore a resistance level is a price above the current price.
Scalping
This involves using increased trading volumes to book profit. Although there is risk involved, a smart trader takes care of the margin requirement and other important rules to avoid bad trading experiences.
High-Frequency Trading (HFT)
HFT is a kind of algorithmic trading strategy used by quant traders. This involves developing algorithms and trading bots that help quickly enter and exit a crypto asset.
Dollar-Cost Averaging
DCA refers to investing a fixed amount at a regular interval. This strategy helps investors do away with the cumbersome job of timing the markets and building wealth in the long term.
Build balanced portfolio
Crypto trading is still at an evolving stage. While several countries welcome trading in the cryptos, some are still skeptical about it.
Avoid making trading calls based on hype
Relying on social media for news on cryptocurrencies is among the mistakes that new investors tend to make. Investment decisions should never be based on hype created on social media.
Primary Research
One of the most important trading strategies is to do primary research. You need not be an expert at trading to conduct primary research on the value of the asset you wish to purchase.
Arbitrage
Arbitrage refers to the strategy under which a trader buys crypto in one market and sell sit in another. The difference between the buy and sell price is known as ‘spread’.
Betting on Bitcoin Volatility
It's not news that Crypto is among the most volatile asset classes being traded currently. Recently, Bitcoin prices had fluctuated nearly 30% in a single session.
Crypto trading is a highly volatile, fast-paced market. The best traders in the world aren’t just good at trading with their eyes closed, they are well-versed in Crypto Trading Strategies and have mastered the art of profitable trading.