It’s been said that cryptocurrency trading is much like stock trading, but those who are new to the scene won’t find that information useful.
When talking about cryptocurrency trading strategy here are 4 you can try.
Table of Contents
Trading with Leverage
Often referred to as ‘margin trading’, it’s a technique lifted straight out of the stock market rulebook.
The simplest explanation of trading with leverage is that the investor doesn’t use his or her own money. Instead, they borrow capital to get their journey into cryptocurrency trading started.
There’s a definite sense of urgency in margin trading since the borrowed money has to be paid back. If you gain enough to make a profit you can quickly pay back the loan and the interest. It’s the best possible outcome- you don’t have to save up to gain capital and you can jump in the crypto market sooner.
Margin trading is a good solution especially when paired with a tool that can help you succeed. Bitcoin affiliate network can give you the edge and amplify your earnings through cryptocurrency trading.
Position Trading
Position trading has many names- HODL, following trend or trend following. Typically, it involves keeping the cryptocurrency you bought with you for a long time, hence the term ‘hold on for dear life’.
The same principles will still apply in position trading. You only make an action if the conditions are preferable- buy when the crypto asset is low in value and sell it when it’s sky-high. Position traders will typically assign a value to when they want it before they sell their assets.
The strategy is fairly simple- you buy the cryptocurrency you want, then hold it until you want to sell.
Swing Trading
Swing trading is more erratic compared to position trading and involves working with different time periods. The actions you take here only take days compared to months or even years with HODLing.
This method requires careful planning and prediction from the trader. You can make an assumption that say, Bitcoin will double in value next month and make your moves according to this trend. In this case, the trader will try to buy as much Bitcoin as possible, then wait until the conditions are right to sell them. The action is usually only one- sell all assets and gain a huge profit.
Day Trading
Day trading is a better fit for cryptocurrency trading than the stock market. Due to its volatile nature prices of crypto coins fluctuate on almost a daily basis, making it the perfect condition for someone who wants to make a profit in micro-amounts.
The method employs quick buys, followed by sells when the price is slightly above the value and there’s a profit to be gained (no matter how small). It may be a bit tricky since exchanges will have transaction fees and costs but with the right timing and strategy you’ll have gained enough by the day’s end.
Most day traders will complete several actions in hours so they could take advantage of ‘swings’ in the crypto market.
