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January 25th, 2023
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Expert Tips and Strategies for Crypto Trading
Allen Brown | Sep 15, 2020
Prices of the cryptocurrency market are extremely interchangeable. This is why many people easily turn away or give up crypto trading, however, there are well thought of ways available to make this kind of trading easier and to help you keep up with this volatile market.
Here are some of the expert strategies if you are interested in upping up your crypto trading game. While none of these strategies can guarantee you a sure gain, if executed correctly, they can bring you profit, and, if nothing else, prevent losses.
Tips to Start With
One tip that will help save your nerves is - learn to adapt. The most used word to describe all things related to cryptocurrency is “volatile” and for a good reason. To stay sane and be successful, you must be flexible enough to adapt to the frequent changes in the cryptocurrency market.
Try and focus on one strategy, as opposed to trying to shuffle more at once. You shouldn’t try to handle multiple stocks, instead, focus your attention on a single chart at a time. This will help you to concentrate better and thus prevent trading mistakes. Remember, apply a single strategy on a single chart.
Take a Moment Before You Go Any Further
As simple as these tips sound, they are usually the most overlooked and are usually lost in the sea of more complex strategies, being crucial nonetheless. The idea behind them is to help prepare you to make a great plan for crypto day trading because the rate in which the cryptocurrency market changes calls for many different and complex strategies.
These are especially helpful if you are completely new in crypto trading and want to hit the ground running. Here are some of the most important expert strategies.
See: Canadian Securities Regulators Publish Additional Guidance for Facilitating Crypto Asset Trading
Hedging
Cryptocurrency trading is notoriously volatile, and because of its unregulated nature doesn’t offer a lot of protection to traders. Even though this interchangeable nature can offer a different set of opportunities, it can be a problem for some of the traders on the riskier side of the spectrum.
Hedging is technically a risk management strategy. More than one position is held at the same time and the goal is to counterbalance losses from one with gains from the other position. It’s important to point out that hedging will not save you from any losses, but it can protect you if they happen. This kind of risk strategy is not particularly useful for long/term traders, as they are not affected by momentary shifts. Which brings us to our next strategy.
Range Trading
More often than not, there is a certain range inside which a cryptocurrency will trade for a relatively long time. This trading range can seem volatile at a first glance, but it is usually less so than more extreme fluctuations that happen in the crypto market.
Range traders are not interested if they are trading the range at the high or the bottom, because they are buying the bottom of the range with a stop that’s been set beforehand, and then they sell the top of it.
While range trading, you must keep in mind oversold and overbought zones. Oversold indicates that the traders haven’t met their expectations and the stock probably won’t sell. Overbought is the exact opposite. These zones can be found with chart indicators.
Long-term investing
In the world of crypto trading, long-term investing is better known as “HODLling”. This term was originally coined when an investor misspelled the word “holding” during a trade when the bitcoin price was taking a deep dive. This strategy is very straightforward as the user simply doesn’t trade in hope that the changes in the crypto market will skyrocket. In other words, HODLers hold their position no matter what the price is.
However, since these changes can’t be foreseen it could result in either no gains or in a loss. This is why it’s crucial to manage your risk with stop-loss orders, which automatically stop a trade if the market starts moving against you.
Scalp Trading
Scalp trading or scalping is oriented towards keeping the profits constant, however small they may be. If you want to be a successful scalper, you will need to use charts (5-second charts are recommended), and news releases. A review of bitcoin up, a bitcoin robot, shows that it can automatically analyze bitcoin-related information using a special AI algorithm that allows it to read and interpret the news. It is estimated to be a millisecond ahead of the market, therefore justifying the supposed win-rate of 99%. Trading frequently, up to 30 trades a minute, with a high win-rate will make these small profits add up very quickly.
The goal with scalping is to use the rising trading volume and not hold on to investment so you can make small and frequent profits. Of all the strategies for crypto trading, scalping is the one that requires the most accuracy and discipline.
Pick the Right Trading Strategy
There isn’t exactly “the right” trading strategy since different people will prefer different approaches. However, you can find some general tips here.
To find a strategy that works for you, don’t keep changing them if they don’t happen to work for you right away. Pick one strategy and keep doing it until you become good at it. Then refine your skills until you make a profit.
Don’t expect to make insane amounts of profit right away. Crypto trading is a tricky sport and it will leave you desperate for months until you get a hold of the game. Whatever the case, always be sure to have a risk management plan. These may differ from strategy to strategy, but the overall idea is the same - to minimize your losses. One way that may improve returns is to work with a crypto trading signals paid group.
See: Banks in US Can Now Offer Crypto Custody Services, Regulator Says
Crypto trading is a big concept. The reason why traders usually don’t succeed is that most of them aren’t good traders. Having this in mind, we can conclude that active work on finding and refining the style that works for is necessary if you want to have as little losses as possible and ideally make the most profits you can, regardless of the state of the cryptocurrency market.
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