Cryptocurrency trading didn’t even exist a decade ago, but now it has become one of the favored markets for those who love the adrenaline rush brought on by high-risk, high-reward trading.
As is the case with any type of trading there’s no guarantee of profits with crypto trading, but you can help make them more likely by developing and following a cryptocurrency trading strategy. This will allow you to measure your success and failures and will help you improve your trading over time.
In this guide, you will discover four popular crypto trading strategies you can deploy today.
Most crypto trading strategies will include technical analysis, so if you aren’t familiar with this art form now you’d best start studying.
Technical analysis is used extensively in equity and forex trading, but it also works exceptionally well in analyzing cryptocurrency price movements. That said, keep in mind that cryptocurrencies are still quite volatile and prone to price manipulations.
Technical analysis can work in these markets, but you need to be quick in your analysis, and decisive in your trades. There’s no room for timid traders, but you also need to use solid risk management when trading the cryptocurrency markets.
I know it may sound risky, and it is, but when using technical analysis combined with an appropriate crypto trading strategy you can turn that risk to your advantage. Cryptocurrency markets are well-known as a hotbed for high-profit opportunities.
Basic Cryptocurrency Trading Strategies
Swing trading is a popular cryptocurrency trading strategy that depends heavily on technical analysis. If you want to become a successful swing trader you’ll need a good grasp of chart analysis. It will help you get a feel for market movements and can help you identify significant price movements before they happen.
Swing traders keep positions open for anywhere from an hour to several weeks, although several days is the most common. When you’re swing trading, it’s all about capturing short-term trends.
That’s true even if the trend is sideways, where it’s possible to buy at the bottom of a range-bound market, then sell at the top of the range several days later, and turn around to buy again in several more days as the market bounces between the two handles.
Another successful swing trading strategy is to look for breakout moves, and get into them after the breakout has occurred, but soon enough that part of the move can be captured for profits.
Swing traders need to have the discipline to determine entry and exit points and stick to them without getting caught up in emotions. If you employ a swing trading strategy you might only place several trades a week, but each trade should have the potential for great profits.
Day trading is a fast-paced and sometimes stressful trading strategy, where positions are held for no more than a single day. The day trader might use leverage when trading to amplify gains since they are closing out all of their trades by the end of each trading session.
One pitfall of day trading is that new traders can often suffer huge losses when they are inexperienced with the market they are trading. It isn’t unusual for new day traders to suffer losses for weeks or even months before finally becoming profitable.
Crypto day traders have to be especially vigilant in watching prices and chart setups since cryptocurrencies have a tendency to move rapidly and change directions just as rapidly. Continue reading…