Crypto trading has become an increasingly popular way for people to make money. But crypto trading can be daunting, especially if you are new to crypto trading. The crypto market is volatile and complicated, so it’s important that you have a strategy before jumping in head first.
Crypto trading can have risks. To do crypto-trading well, you must make sure to be safe and get good returns. So let us start by talking about how to be safe in crypto-trading and how to get good returns.
Crypto Trading Strategies For Beginners
1. Day Trading
Day trading is when you take a crypto and trade it at the same day. The crypto trader wants to make money from the crypto’s price movement during the day. You can buy or sell by analyzing charts that show prices. It is risky, because if the chart has no price movement, then there’s no profit for you.
2. Range Trading
Range trading is when crypto prices go up and then down. People who do this work with crypto analysts. They study the crypto market to find levels that are not supposed to be crossed. One of these levels is called ‘support’, which is below the current price of crypto, and one is called ‘resistance’, which is above the current price of crypto.
Scalping is a trading strategy that uses increased volumes to book profit. This trading strategy is risky but can be profitable if the trader follows the margin requirement and other important rules. Scalpers analyse crypto assets, past trends, volumes and choose an entry and exit point within a day.
4. High-Frequency Trading (HFT)
HFT is a crypto trading strategy that uses algorithms to help quickly enter and exit crypto assets. This involves understanding complex market concepts and having a strong knowledge of mathematics and computer science. Therefore, it is more suited for advanced traders than beginners.
5. Dollar-Cost Averaging
Dollar Cost Averaging is a crypto trading strategy that involves investing money in crypto assets at regular intervals. This strategy helps investors do away with the need to time the crypto market and allows them to invest in crypto assets for the long-term.
DCA strategies are tricky because the exit is dependent on understanding market trends and cycles. Technical charts can help you forecast when an asset will peak or trough, but it’s important not to wait until someone else tells your time! Monitoring oversold/overbought regions before making any decisions could give traders more confidence in their investment strategy.
6. Build Balanced Portfolio
Cryptocurrency trading is still in its early stages, and as a result, it can be quite volatile. Despite this, there are strategies investors can use to keep their portfolios balanced and limit their exposure to risk. For example, they can diversify their holdings by including a variety of different cryptos, rather than just investing in one. They can also keep an eye on global trends and be prepared to sell when the market starts to decline.
Building a crypto portfolio that consists of crypto like Bitcoin, Dogecoin and Ethereum could go a long way in beating volatility.
It allows Investors to maintain a fixed amount of investments in various cryptos. This will help to increase the risk appetite in a systematic manner and will yield favorable returns over the long term.
7. Don’t Make Decisions Based On Hype
When it comes to crypto trading, don’t make decisions based on hype. Instead, focus on reliable sources of news. Taking investment advice from social media is a mistake that new crypto traders often make. Since digital currencies are such a hot topic, there is a lot of false information circulating online. So it’s important to be vigilant about verifying information before making any trades.
8. Do Primary Research Work
Primary research is a trading strategy which can be conducted even if you do not have any specialized knowledge about the crypto industry. One of the most important parts of this strategy is to know what happens in crypto before it happens so you can be an informed trader. Crypto trading is one of the most volatile markets that exist today. In addition to thta, you should also evaluate finances and set an investment goal before placing a bet on crypto.
Arbitrage is a trading strategy. If crypto that you buy in one market is worth more money in another then you can make a lot of money. You will need to open crypto accounts on exchanges where crypto prices are different. The crypto that you buy will need to be sold in the other crypto market. The difference between the crypto prices is known as ‘spread’.
10. Betting on Bitcoin Volatility
Bitcoin has been very volatile. Recently, it went up or down by 30% in one day. You can bet on the price of crypto to go up or down by buying a call and put option at the same time. The strike price should be similar too. The way to make money with crypto is to buy a call and put options at the same time. The strike price and expiration date must be similar. One more thing, if you want to exit, you will have to sell put and call options simultaneously.