Although cryptocurrency is marked by high volatility its appeal continues to draw investors big and small alike all over the globe.
And while crypto markets follow more or less the same rules as stock trading and Forex, there are 3 strategies and methods that stand out.
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Trend Trading
Trend trading is a slow and cautious approach to cryptocurrency, with most of the movement indicators defined by that particular crypto’s trend.
Traders must be willing to stick with their assets for a long period of time, only making an action if the trend is in their favor. It’s worthy to note that trends can change quickly, and they can swing from one to the other in days, weeks or months.
Discipline is the central characteristic of a trend trader. Aside from that, you will need to be familiar and comfortable with technical indicators to detect trends. You will need the proper tools as well as keep a finger on the pulse with news and economic events.
Bitcoin code software is a good app that pairs well with trend trading. It will show you the trend and analysis on Bitcoin so you can time the trade right and make maximum profits.
Scalping
Scalping may take the rap as being one of the most unsavory practices, but it simply works. In trading, the term means the trader successfully makes a number of trades that make him or her a significant amount of money.
The volume and actions in a scalping strategy will be unprecedented. Usually, the trader will use all of his or her assets to ‘cash in’, or exchange the crypto to fiat. Then, they will look for the next cryptocurrency with a vigorous movement and start the cycle again.
Scalping is different from day trading in that they anticipate the market movement and trade not just a part, but all of the assets they have. It goes the same in losses- when the value dips they usually sell all of their assets to minimize the loss.
If you’re confident with your ability to predict a trend ahead of everyone else then scalping might be for you.
Day Trading
Day trading is currently one of the most favorite methods employed by cryptocurrency traders.
In a typical day trading scenario the trader will look for movement and possible opportunities regarding his or her assets. Intraday fluctuations are bound to happen in a highly volatile environment like crypto. It only takes an hour or two before you see a crypto’s value moving up or down. Then, you complete actions, e.g., buy or sell to make a profit in the end.
All these things will usually happen everyday. Day trading is a rewarding strategy since you’ll be given immediate feedback on how well you did during the day. If you take home a profit then you can say that it’s a huge success. However, like most investments there are still risks involved, and you should still come up with stop loss strategies and exercise general caution.
