Cryptocurrencies Trading is a high-risk, high-reward endeavor. Like anywhere else, there is no assurance of profit in cryptocurrency trading, and anyone who claims otherwise should be avoided at all costs.
Trading cryptocurrencies is a high-risk endeavor with significant rewards. Like everywhere else, there is no guarantee of profit in crypto trading; if somebody tells you otherwise, you should avoid them as much as possible. It is a tremendously lucrative way to earn a living since many people make living trading cryptocurrencies, but it may not be suitable for everyone.
Crypto trading is only viable for risk-tolerant, skilled, and level-headed traders who relish huge gains, especially during bull markets. You’ve probably heard their stories.
Even in bear markets, when the streets are flooded with “blood,” people are panic-selling, and prices are falling as quickly as the value of the Venezuelan Bolivar, a small number of highly skilled traders can generate gains.
This book will demonstrate the most prevalent cryptocurrency trading methods that you can immediately implement into your crypto transactions.
Technical analysis (TA) OF Cryptocurrency Trading Strategies
If you wish to engage in crypto trading, you should acquire at least a fundamental understanding of technical analysis. Looking at charts, drawing lines, and identifying significant price levels may appear dumb at first. Still, it’s one of the most useful tools you can have, and it’s certainly preferable to having nothing.
If you have prior knowledge of the Forex and stock markets, you will understand what we are discussing. In contrast to Forex and Stocks, where important levels and prices generally adhere to established technical analysis methods, the crypto trading frontier is substantially more defiant. The price fluctuations are significantly more volatile, the markets are moving rapidly, and they are more susceptible to price manipulation. The knowledge baggage you may bring from other markets must therefore be tailored to crypto by your own experience, lessons, swift and decisive actions, and suitable risk-management strategies.
Cryptocurrency Trading Strategies with suitable TA techniques can generate numerous high-profit opportunities, despite the seeming complexity of the activity. If you execute your trades and plan with intelligence and vigilance, you will likely enjoy a profitable and enjoyable trip.
The decision-making aids available to you include:
- Tradingview (charts and technical analysis)
- Prediction (market sentiment analysis service)
- Coinpaprika (coin index and research site)
- Coinmarketcal (a calendar of upcoming crypto events)
- Delta (portfolio tracking app)
Besides, a great place to kick off your trading career is eToro. Known for its social trading feature, eToro also offers you plenty of resources, tools, and guides to learn the ins and outs of both crypto and traditional trading.
Cryptocurrency trading strategies
Strategy #1: Hodl
The hold is an essential long-term Cryptocurrency Trading Strategies for beginners. It takes the fewest trading skills and experience, and anyone can do it.
Its famous moniker, Hodl, is derived from the misspelled word “household.” It was created in December 2013 after Game Kyuubi’s post on Bitcointalk.org.
The core tenet of the Hod Cryptocurrency Trading Strategies is to purchase a cryptocurrency with potential and hold it securely for an extended period to sell it for a profit in the future. The sale may occur after one year, many years, or even ten years.
For this technique to work, all you need to know is how to purchase and securely store cryptocurrency. The majority of holders utilize cold storage wallets like paper wallets or hardware wallets such as Ledger or Trezor.
The Hodl method has disadvantages, though. Initially, there is no assurance that the value of your assets will increase. The project may fail, the network will encounter challenges, or there will be superior alternatives in the future. Second, you may lose your private keys, making safe storage a must.
Lastly, there is no purpose in enduring bitcoin boom-and-bust cycles if you do not profit along the way. For example, if you purchased bitcoin in 2017 for around $2,000, held it until it hit $20,000, and didn’t sell any along the way, you’ve missed out on an opportunity to earn an additional $10,000+ since the price went all the way back down to retest $3,000.
It may be impossible to capture rapid, enthusiastic moves, but even if you sell for around $10,000, it is a terrific deal. Every significant crypto bull market has experienced a nearly 80% pullback, making it a no-brainer to avoid selling when the opportunity arises.
Moreover, you can always reinvest your earnings once the market reaches its bottom. Yes, the long-term game remains the primary focus, but don’t forget to collect profits whenever possible, or at least after significant price increases. It is a sensible strategy to maintain liquidity and reward yourself for making wise judgments. Simply holding and not taking profits tends to drive individuals to make unwarranted illogical decisions in the future.
Strategy #2: Swing trading
Charts and technical analysis (TA) come into play here. To be successful at swing trading, you must have at least a passing knowledge of technical analysis basics. Keeping an eye on the markets and developing a sixth sense for large price swings will be beneficial.
Swing trading is all about making the correct decision at the appropriate time. The objective is straightforward: to maximize profits amid crypto market fluctuations. Whether prices are increasing or decreasing, you constantly attempt to capture a portion of a prospective price shift.
If you have a $5,000 open position on bitcoin when the market is rising, you should hedge it at the peak (for example, exchange it to USDT) just before the market reverses so you may buy back in at the near-term bottom and increase your position size.
Successful swing traders try to capture a percentage of the predicted price movement before moving on to the next chance, which may be just a few trades per week.
The idea is to establish entry points, stop losses, and profit targets before every trade, and adhere to them. Aiming for a $100-$200 profit per move is acceptable so long as the benefits of time outweigh the hazards. In some instances, the market can signal $1,000 changes, but it is quite impossible to predict them with absolute precision. Securing earnings by moving stop losses higher in profitable swing trading should be a key goal.
Strategy #3: Daytrading
Daytraders trade cryptocurrencies full-time. They conduct a dozen deals per day to advantage of market changes, whether buying or selling assets, trading on leverage, or exchanging perpetual contracts. Beginners with inadequate technical and basic analysis skills or market experience may struggle. Before becoming a profitable day trader, you may lose months or years.
On the cryptocurrency market, day traders must adhere to charts and actively monitor price movements. Be willing to cut losses, execute break-even trades, and frequently alter biases to avoid bull or bear traps and losses. Day traders must live off cryptocurrency price variations regardless of market direction. Every price movement is accompanied by a counter-trade at its reversal point.
Day trading is all about making quick, calculated judgments designed to reduce risk exposure and increase rewards. No trader is correct 100% of the time, so be prepared to end positions with big losses. Learn to identify likely support and resistance levels, re-enter your trades at the proper time, create targets and tight stop losses, and you’ll graduate from the day trading university of cryptocurrency sooner or later.