Launch into crypto trading with a trading strategy first.
You need a proven strategy to consistently make money in the cryptocurrency market.
Having a strategy allows you to keep your focus amidst the constant flow of news, economic data, and market events that can interfere with your analysis.
Why Do You Need a Crypto Trading Strategy?
It would be wrong for you to see the happenings in the crypto markets as random and trade based on your intuition alone. Trades executed based on your gut can indeed result in a large profit. However, such an accomplishment is only a result of chance—you can’t be sure of replicating such results consistently even if you try so hard.
Expert traders rely on well-thought-out strategies for their success. They know that even though crypto prices fluctuate, they tend to follow predictable patterns. As a result, a strategic approach to trading is required. Our goal is to help you understand the different trading strategies you need for consistent results.
You can also read: How to Learn the Basics of Currency Trading
What Is a Crypto Trading Strategy?
A crypto trading strategy is an established method of planning and making trades that you follow. Trading strategies typically set out specifications for which trades to make, when to make them, when to exit them, and how much capital you should risk on each position.
Your crypto trading strategy is a fixed plan that you design to achieve profitable returns when buying or selling in the crypto markets. This plan employs various analytical tools to identify predefined market conditions and price levels, including important resistance and support areas.
Popular cryptocurrency trading strategies include; day trading, buy and hold and scalping. More a follow away.
1. Day Trading
Day trading involves entering and exiting positions on the same day. As such, day traders aim to capitalize on intraday price movements, i.e., price moves that happen within one trading day. Day traders trade on timeframes higher than that scalpers but still close their positions within a day. The point of day trading cryptocurrency is to profit from tiny market movements and volatile bear and bull market activities.
2. Buy and Hold (Position Trading)
Position trading allows traders to hold trading positions for a long time. It could be months or even years. Traders using this strategy usually ignore short-term price movement and focus more on long-term trends. To make this type of trade, traders usually focus on the daily, weekly, and monthly timeframes. Position traders also use fundamental analysis to evaluate potential market price trends and consider other factors such as market trends and historical patterns.
Scalping is also a popular trading strategy in the cryptocurrency market. This trading strategy allows traders to profit from little price movement at frequent intervals. The goal is to add up small profits each day to generate a substantial amount over time.
Scalpers often use leverage to open more trades and tight stop losses to manage risk. They trade using one-minute, 15-minute, and 30-minute time frames. Their trades usually last for a couple of seconds or minutes but typically less than one hour.
Learn how you can master and use these two and other strategies. Earn profits at your leisure