Best cryptocurrency trading strategies? The cryptocurrency craze has become the talk of this year. More and more people are finding the Blockchain technology exciting and profitable. In order to become successful in the crypto-world, understanding what the market is about and adhering to a skill set of trading strategies is necessary. If you need you may start in our first guide on what is Bitcoin.
Trading strategies are there to provide objectives for traders to earn more with lesser capital, its just like how a successful business should operate. Real trading strategies should be based on quantifiable specifications that can be analyzed based on old data which can be used for future trading scenes. Also you can find more information about us here.
When it comes to trading and investment of digital currencies, there are a few straightforward things an investor needs to understand first, they are mentioned below; Start trading today – free account.
- Understand blockchain – You don’t need to understand the technical complexities, but a basic understanding will help you respond to news and announcements that may help you predict future price movements.
- Find out what’s growing – Bitcoin, Ethereum and Litecoin top the list for tradability and ease of use. However, there are also Zcash, Das, Ripple, Monero and several more to keep an eye on, so do your homework, take your time and perform an understudy, find out which is more profitable to you and focus your attention there.
- Embrace volatility – Cryptocurrencies are famously volatile. This invariably means the risk is high, it also means the potential for profit is great too. It’s always sensible to check the volatility of the exchange you decide to go with.
Moving forward, one of the best cryptocurrency trading strategies ways to approach the trading world is with an open mind, be ready to learn as no knowledge is lost and being grounded in all there is to know in the crypto world would help investors minimize risk while trading. A good strategy is to find arbitrage on different exchanges. Ignore the trollbox, it’s called troll for a reason. Enjoy the best cryptocurrency trading strategies.
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- Learn as much as possible; knowledge is power, investors should take the time out to learn about all the crypto jargons like HODL and dynamics like “pump and dump” also get an understanding of the blockchain technology.
- Trading bots; If you are not able to understand the difficult technology behind Blockchain technology, you should start using a trading bot with API enabled will help do the trading for you. This is one of the best cryptocurrency trading strategy for amateur traders.
- Long/Short; When a trader is in a “Long” trade this means that they have bought something and are hoping that the price will go up to make a profit. On the other hand, when a trader is doing “Short” trades this means that the trader sells what they have in hand.
- Swing Trading Strategy – Swing trading is somewhere in the middle of Day Trading and Trend Trading. This is because Day Trading is holding an asset from a couple of seconds to a few hours but never more than a day while Trend Trading is when the trader looks for a longer timetable and keeps the asset for weeks running to months, Swing traders however hold an asset for a couple of days up to a few weeks.
- Scalping; is trading strategy that is the most active one to date, here a trader that follows scalping takes advantage of smaller gains but on a larger scale. Thus multiple entries and exists will pile up and make a hefty sum.
- Day Trading; this is a strategy that involves the buying/selling of assets within the same day. Day trading cryptocurrency has boomed in recent months, high volatility and trading volume in cryptocurrencies suit day trading very well. Day traders try to utilize special short-term course fluctuations, in the crypto space this brings them profits between one and three percent.
- Trading on the News; trading on the news simply means trading in times where something “happens” like a natural disaster or even a terrorist attack that forces the asset to plummet. Buying at this time is the cheapest since everything goes down so fast but would also have a greater risk of not going up again due to involved instances.
- Diversifying your portfolio; the most effective strategy for minimizing risk in trading cryptocurrencies is diversification. A well-diversified portfolio consists of different types of securities from diverse industries, with varying degrees of risk, even though diversification can’t guarantee against a loss, it is the most important component to helping you reach your long-range financial goals, while minimizing your risk.
- The HODL; HODL in the crypto world means holding onto your cryptocurrencies when things are not going as planned.
- Buying at the right time; one of the basic strategies that you can look into is buying at the right time. It is natural to buy cheap when there’s a surplus of assets lying around, the challenge here is to know when the supply is greatly ahead of the demand. Understanding this means that profit can be easily made with the gap between the cheap purchases an expensive sell.
- Perform Technical Analysis; history has a habit of repeating itself, so if you can get acquainted with a pattern you may be able to predict future price movements, giving you the edge you need to turn an intraday profit. So analyze historical price charts to identify telling patterns.
- Study Metrics; this is another very important cryptocurrency strategy where looking at the number of wallets vs the number of active wallets and the current trading volume, you can attempt to give a specific currency a current value in which you can then make informed decisions based on today’s market price. The more accurate your predictions, the greater your chances for profit.
- Install a price ticker; a price ticker will alert you whenever the price fluctuates. So, it’s better to install on your phone and depending on the price, you can make wise investment decisions. Always observe the market capitalization as that is an eminent factor, this is one of the common day to day cryptocurrency trading strategy. Find best cryptocurrency trading strategies.
There are also a few mistakes investors tend to make which could lead to great loss, having knowledge of these mistakes would help beginners and even experts to learn from previous mistakes as we look at them below:
- Chasing pump and dump schemes; Pump and dump is a scheme that boosts the price through recommendations based on false, misleading or greatly exaggerated statements. Investors are adviced to avoid such schemes.
- Falling for phishing scams; Falling for an email scam is something that can happen to anyone no matter how careful one gets sometimes a simple distraction or even anxiety can lead to one falling for such scams. Phishing scam involves using email and fraudulent websites to steal sensitive information such as passwords, credit card numbers, account data, addresses, and more.
- Losing your private key; this may be the greatest mistake in the crypto community till date. Losing private keys will waste all your money as you can’t do anything if you have forgotten the password. An investor should never lose their keys.
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best cryptocurrency trading strategies
These are the cryptocurrencies tricks which should help you become an informed investor. It will save you from making silly decisions and at the same time, never ever dare to commit any of the crypto blunders as mentioned above. Find the best cryptocurrency trading strategies.
Conclusively, trading strategies have been practiced since the first human civilizations was formed. This means that even though we have converted them to our current trading market, the basis of everything is still bartered trade. What this invariably means is that no matter the number of trading strategies out there the basic idea is to adopt the one that you understand and helps you maximize profit as well as manage risk. Best to learn best cryptocurrency trading strategies with STS Crypto.
Refer to this as your guide to day trading cryptocurrency and you’ll avoid most of the hurdles many traders fall down at, when choosing your broker and platform, consider ease of use, security and their fee structure these are very important. And whichever trading strategy you opt for, make sure technical analysis and the news play important roles. Finally, keep aware of regional differences in rules and taxes, you don’t want to lose profit to unforeseen regulations.