Becoming successful in cryptocurrency trading is a matter of trying different things and seeing what works best for you. A single strategy might work for one person and not another. That is why you need a variety of trading strategies to take your game to the next level.
In most advice regarding cryptocurrencies, people will often tell you what the problem is rather than giving you the exact solution. The few that are caring enough to give some kind of guidance do it at a fee. The Internet world literally becomes a man eat man society.
But that should not be the case. You should be able to freely access vital information about cryptocurrency trading. You need to know the right strategies that will make profit. That is the main purpose of this article.
Detailed research has been conducted on these 5 cryptocurrency strategies that are sure to take your trading game to the next level. One thing you must know is that becoming successful is all about the willingness to pay attention. It has nothing to do with gambling and neither should it.
Use any of the following 5 cryptocurrency trading strategies to make immense profits:
Strategy 1: Swing Trading
Most traders complain of the market always appearing to move lower immediately they hit the Trade Button. With swing trading strategy, your focus is to capture a swing (a single move). It is based on the idea that you can exit a trade and endure the most minimal pain in doing so.
When doing the swing trading strategy, it is important to implement some good practices. The 20% price change is one such strategy. Here, if your altcoin increases by 20% and the other coins seem to be headed in an unfavorable direction, it is about time to sell. That’s because the coin is more likely to decline by 10% the next day.
If the market is expecting an important announcement the next day, the best practice is to close one day to the announcement. This should be done not just for your altcoins but for any other coins. You have to watch out for news events in altcoin platforms, adult sites, and cryptocurrency companies.
Swing trading is a useful strategy for a number of reasons. First, this is an easy-to-automate strategy. You do not require a lot of time to learn and execute it using trading bots. Therefore, you end up executing more trades much faster than you would have had you gone manual.
However, as you begin using it, trade with the understanding that there are times when you shall make money and lose some other times. Most beginners are particularly the biggest culprits here.
Strategy 2: Cryptocurrency scalp trading
Whereas swing trading entails holding an asset for some time with the aim of making big profits, scalp trading takes a different perspective. Scalp traders will be happy to make some money, even though it is slightly less. They are focused on making many small trades from which they make small amounts of money that they can combine to scale up.
Patience is a crucial part of cryptocurrency scalp trading. That’s because you have to wait for your many small trades to bring in the profits they generated and then merge them to something bigger. Speed also matters here. You are not only required to be fast but also laser focused.
Now, how do you go about scalping? Basically, a scalp trader takes a look at charts and big news events to decide on which investment to make within the shortest time possible. The idea is not to hold onto an investment. All that you want is to make use of a growing trading volume, generate your little gain and get out safely.
Strategy 3: Pairs Trade
Pairs Trade strategy involves comparing the cost of one crypto against another. Bitcoin is mostly used as the point of comparison in this strategy but you can also use many other trading pairs! When you do so, you get to establish a value.
You could look at it in the same way as a person would walk into a local supermarket and determine the price of a product in fiat currency. The only difference here is that there would be no multiple fiat currencies as is the case with cryptocurrency. Pairs Trade establishes an asset’s value when traded for a different asset.
Before selecting a pair, a cryptocurrency trader would make sure that it is one that gives them an advantage. The trade is supposed to make you money rather than lose it.
It is also vital to keep into consideration the current trading volume. If it has a low trading volume, you would have to wait for a long time before it goes through.
Bitcoin and Ethereum are typically used as the base currency. However, exchanges can use a variety of other options including own base currencies. Make a personal decision as to which base currencies you prefer before proceeding. This can easily be done in your account.
Strategy 4: Breakouts
In this cryptocurrency breakout trading, you begin by defining what you are looking for. The idea would be to buy low and sell higher. You then set the timeframe to several days if not weeks and get at least 2 charts. The weekly or daily chart will give you a clear picture of how low the price for an altcoin can be.
Once all of these have been established, you move on to determine entry. Your focus here is to determine extreme low areas in the altcoin charts.
The overall focus of the breakout cryptocurrency trading strategy is to identify resistance or support areas, the point at which price shifts to a new direction. If it breaks upwards from a low price area, this is the support area. If it breaks downward, this is the resistance zone.
Make sure you get clear breakouts from the low price area. If you fail to do so, you might have to wait for a couple of weeks or months hoping the price will become favorable once again (might not even happen).
With a clear breakout above resistance, trade and wait for a bounce off which becomes your new support. Volatility often sets in at the point when the coin begins trading past the new support. The price then follows through the breakout.
Strategy 5: Buy and Hold
This is the kind of strategy best explained by the phrase ‘hold on for dear life’. Here, you simply buy Bitcoin and sell it after 1 or 5 years. As you wait for the selling time, you keep on buying more when the price is at its lowest.
The fact that you have no control over Bitcoin means you can choose when to buy and when to sell. However, it is one of the riskiest trading strategies and is best left to professionals. Do not just do it because friends and family are doing it. Also, do not be convinced by untold riches.
Before you begin cryptocurrency trading, you need a plan. That is why you have to choose a strategy that best works for you. Conduct detailed research on the strategy and implement it.
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