Crypto trading strategy helps traders to organize their techniques of trading, in a coherent framework which they can follow. Through these strategy, they can continually monitor and optimize their trades and also make profit.
What is a Crypto Day Trading Strategy?
Crypto day trading strategy is a strategy for trading that involves entering and exiting positions on the day of trade. The goal of these strategies is to try and profit off of price changes and movement.
The Best Bitcoin Trading Strategy
This is a cryptocurrency trading strategy that can be used to trade bitcoin as well as other cryptocurrency. The best way to enhance your bitcoin trading strategy is to :
- Diversify your trades
Combine bitcoin, ripple, litecoin and other cryptocurrencies, this will help reduce the daily risk associated with a specific coin.
- Minimize trading costs
Opening multiple positions everyday affects your daily return on investment. To minimize cost of trade, you need to choose a trustworthy exchange that has low fees.
- Watch trading times
Plan out trading times that are compatible with your schedule.
- Follow bitcoin news
Pay attention to cryptocurrency news story to stay ahead of the market
- Use technical analysis
Use strong technical indicators like OBV
- Use stop losses
Set Stop loss orders on every trade, start with a profit loss ratio of 2:1
Beginner Crypto Trading Strategy
Crypto assets are high risk instrument and one need to have a plan in place before trading on them to prevent loss of invested capital. While analyst may agree that there is no trusted strategy to invest, there are three method that may suit beginners which are:
- Dollar cost averaging
- Golden cross/death cross
- RSI divergence crypto trading strategy
What Are The Best Ways to Create a Crypto Trading Strategy
When it comes to making a good strategy for trading in cryptocurrencies, you need to know the vital ingredients. You have to include several important features in your trading strategy because they will make it perfect and well-planned.
Planning is critical in trading, and you should do it before even starting a trade. Some of essential things that you must include in your trading strategy to make it solid and fruitful are :
- Daily targets
Trading aims to make small profits out of daily transactions, and this is something that you have to keep in mind. You need to make small targets that you can achieve daily.
- Right action plan
You need to decide if you want to go with the hedging or holding strategy. There are circumstances in which holding would be most preferred while other circumstances, you may go for hedging.
- Fear of missing out (FOMO)
You need to make sure that you never fear any missing price because that will come over again for you to take advantage of it.
- Exchange and wallet
There are a lot of cryptocurrency exchanges and wallets available on the internet, but you have to choose the best.
The Five Crypto Trading Strategy That You Can Make Money From
Many traders lose alot of money during trades. But, those that know what they are doing have the range of tools needed to make big profits during this time. Here are five of the best crypto trading strategy to make profit from:
Scalping is a strategy of taking advantage of small market movements, quickly entering and exiting positions during a day, or even an hour. The key is making as many successful small trades as possible while avoiding losses.
- Buy the dip and hold
A drop in any asset’s price is a great opportunity to buy. This is the perfect opportunity for investors with the available funds to buy the undervalued cryptocurrencies.
- Follow the trend
With this strategy, you trade with the trend rather than with the swings. If the market is trending up, only open long trades. If the market is falling, you only open short trades.
- Invest in staking coins
Staking coins and tokens are the crypto assets that perfectly align with the diversification goal, as they generate staking profits over time. You have to buy them, lock them and stake, becoming a validator node in their respective network.
- Invest in a tokenized crypto fund
If you want to easily profit from all of the strategies above without having to actively manage a portfolio, there is a fifth option: tokenized crypto funds.
These are pools of investor capital managed by a team of professional investors that use a range of strategies to earn returns on all of the capital within the fund.
Crypto trading strategies helps to enhance traders method of trading and make profit off the market. In times of panic, experienced investors usually come out on top with the right strategies. So its safe to say that having a trading strategy of your own will help to boast your trade success.
We hope this article will help to widen your knowledge on crypto trading strategies and also aid your choice of strategy to use in trading. For your reviews and recommendations, please drop your comment in the comment section.