Cryptocurrency is considered as digital currency or asset that is used for online trading and transactions.
One of the goals at NewsCrypto is to guide newcomers and help them to become profitable traders in the shortest time possible
Here are a few trading strategies that a freshman or even experienced trader can adopt to become a pro in the trading field...
This strategy involves making a profit by using market fluctuation. The trader who follows this strategy can make a profit or gains when the prices of the assets fluctuate. This strategy is fast growingand requires a lot of attention from the trader and by following this strategythe trader can earn high profits.
The trader purchases the assets at a low price and sells the assets at a higher price. They use the fluctuating or volatile nature of the assets in the market to earn their profit. However the trader must be well aware of the market, factors that affect the price of the assets, and are willing to take risks since slipping can incur a high loss.
Day Trading Strategy
This strategy is much alike scalping strategy. However unlike Scalping, with more numbers of transactions, the day trading strategy involves fewer numbers of transactions.
Basically, it involves purchasing and selling an asset, token, or coin with the goal of making a maximum profit by taking advantage of the market fluctuation in a single day. Many people quit high paying jobs and follow it in the stock market. While using this strategy, a trader must consider three things...
- How much the price of the asset fluctuates around its original price (Volatility)
- How easily the asset can be converted into hard cash (Liquidity)
- Trading volume
The prime goal of the trader following this strategy is to sell the asset in value twice to the original one.
It is one of the simplest procedures that needs no prior knowledge. Following this strategy requires the trader to invest 50% on Bitcoins and the rest 50% on the next 9 cryptocurrencies in the top 10 list.
Then the trader has to simply check and sell the currencies with dropped value and invest the money on some other currency. It comprises of a lower risk of incurring a loss - and don't forget to set up the stop-losses!
Click here to see NewsCrypto Watchlist with detailed information about Top 10 cryptos!
This strategy is the longer version of the day trading strategy. Unlike the day trading strategy where the trader can hold the assets for a maximum duration of 4-5 hours, the swing trading strategy involves holding the assets for a duration of 6 days to a few weeks.
Following this strategy requires a detailed study and technical analysis before jumping into a market. The trader must consider recent market trends and calculate risks accordingly. Following this strategy, include analyzing the market trend, waiting for the price to fall, purchasing and entering into the market, and sell the assets when the price is at the peak.
It involves checking the background of the assets or token before investing. The trader must check the company and the business model before purchasing and must invest in tokens of companies with a history of higher success rate.
It is meant for long term investment and does not make a profit from small fluctuations. This strategy requires less attention from the trader. The trader following this strategy hardly makes two or three transactions in a year and only considers making transactions in case of an emergency.
In the cryptocurrency market, this strategy is also known as HODLING where the investors hold their assets for a long duration of time without selling it.
Copy Trading Strategy
In this strategy, the copy trading feature offered by various trading sites is used by a newbie. The new traders copy the trading strategies from experienced traders making it easier for them to make trading decisions. It eliminates the need oflearning the trading policies or building experience in the trading field.
Trading by taking advantage of the current situation
This strategy entails taking advantage of an emergency like a natural disaster to make a profit. The trader following this strategy buys the assets as the price fall in such urgency and selling the assets when the price rises.
The trading field has developed hugely since prehistoric times. Most of the modern trading strategies are derived and developed from historic ones but the basis of most of the strategies remains the same that is using common sense, intelligence, and taking advantage of the current situation and trend.