7 Strategies for Crypto Trading Every Investor Should Know
Cryptocurrency trading is on the rise all over the world. Many investors/traders are actively participating in cryptocurrency trading and earning good money. Similar to other financial market securities, cryptocurrency assets are risky and depend upon the prevailing market conditions. There is no guarantee of returns when you trade in crypto markets. While many crypto trading software is available in the market, it becomes difficult for traders in picking a reliable one. When you open an account with fast, well-known trading software such as Immediate Edge, you get customized parameters built into the app to set tolerance risk and trading goals.
Many investors/traders have become experts in crypto trading and are suggesting strategies and safe bets for beginners and existing investors. These market enthusiasts have developed new trading strategies to make trading more interesting and safer. Such strategies can offer you great returns.
Best Strategies for Crypto Trading
- Day trading– Day traders are known as intraday traders. Day trading is only recommended when you have adequate knowledge about the market and are aware of technical indicators. Day trading means when traders enter and exit a trade on the same day. Traders/investors who carry trade to the next day or more are known as positional traders. Intraday traders pick a day trade strategically to book good profit on the same day.
- Range trading– Range trading is performed between support and resistance levels. The support level is a price below which crypto security will not fall whereas the resistance level is a price above which the crypto security does not cross. Range trading is a little less risky than day trading.
- Scalping– Scalping is a risky strategy where trades use high volumes to pick a trade, enter and book profit. Scalping is volumes based strategy to trade and earn profits. A smart trader is an expert in picking high volumes trade in a day when to enter and exit and make good profits.
- High-frequency trading– High-frequency trading (HFT) is an algorithm-based strategy where advanced traders use bots to enter and exit crypto trades. Crypto bots are developed using expert knowledge about the crypto market and computer science. Before using bots, you should have good knowledge about crypto assets, financial markets, global news, and the macro-environment.
- Dollar-cost averaging (DCA) – Dollar-cost averaging is a good technique for beginners and even for advanced traders. It suggests investing in a fixed amount at regular intervals. If trades follow this technique, they need not worry about timing the markets. With investing at regular intervals, investors hold crypto assets at a fair average price. Investors/traders must have adequate knowledge about technical charts and market trends to exit a trade.
- Do not make trading calls on hype– Do not rely on trading calls based on social media tips or virtual forums. You can find a lot of false information being circulated on crypto topics. Hence, you may get misled and lose your capital.
- Create a balanced portfolio– It is always said not to put all your eggs in one basket. This statement suggests that diversification of portfolio is imperative to manage risks and save your capital. A smart investor always diversifies its risk and spreads its investments in various financial securities. Avoid greed and do not put all your savings in crypto markets. It is advisable to approach an expert financial advisor before entering securities or crypto markets.