Cryptocurrency is one of the most popular forms of trading as it can be quite rewarding. There are many ways you can trade in the crypto market, knowing which one is best for you is important.
Crypto is considered a high-risk investment. With so many cryptocurrencies in the market, understanding the industry and setting a strong trade strategy will mitigate loss.
A trading strategy is a well-established plan that covers all your trading actions in advance and helps reduce financial loss. As a beginner, a trading plan will help you become a successful trader by making informed decisions and not act hastily or compulsively.
A trading plan also prepares you for possible outcomes which help you enter and exit the market without a big loss. Having a trading plan is not a necessity as there are many people who have profits without any certainty.
With crypto being volatile, it is important that you learn how to securely invest in cryptocurrency. A trading plan will help you last longer with higher margins and move forward smoothly.
If you are looking for a crypto exchange? Here’s a list of the Best Crypto Exchange Australia that can enhance your trading experience that is easy and safe to use.
In this article, we will focus on the common strategies that can help crypto newbies trade wisely:
Day trading is the most common type of trading as it involves an individual entering and exits the market at the end of the day. Similar to traditional markets, you learn to monitor the market and capitalize on the price movements within a day.
Keep in mind that crypto markets are open 24/7, and considering the volatility of the market you need to plan your strategy accordingly. It is much more demanding and often used by seasoned or experienced traders.
Technical analysis is the key in a successful day trade, but you may use other techniques as well to make the most out of your investments.
A very simple trading strategy that is great for crypto newbies. This type of trading is focused on particular trends that can either be a short or long position in the market. With the help of fundamental analysis, you can get top of your particular trend and increase the chance of your success.
Unlike day trading, you invest in a trend that will continue to move in a specific direction which allows you to capitilze on the asset’s price in the future. Moving averages and trend lines are certain indicators that will enhance the chances of success.
It is important to note that not every trend will give you a profit. Even though it is the easiest form of investing for newbies, you much do your research and analysis so that you can avoid any major loss and manage risks effectively.
Buy and Hold
Another great strategy for beginners is buy and hold as it is simple and easy. You basically purchase and hold your investment for a long time, whether for a few months or years. By holding a large sum of assets for a long duration, as the prices increase you will be able to get massive gains.
Regardless of market fluctuations, you must intend to hold your investment as it can reduce financial loss and also enhance your investment portfolio. To make the most of holding investment, you must choose a trustworthy asset.
As long as the prices increase, your investment will be safe. Beginners who are interested in this strategy will have to use fundamental analysis before they purchase and hold.
Swing trading is another long term investment strategy that is suitable for beginners. In this strategy you hold your position for a few days or weeks but not longer a month. This trading strategy allows you to capitalize on the volatile crypto market and plan your decisions accordingly.
While it may a convenient trading strategy, you must learn to use hold technical and fundamental analysis to their advantage. Since swing trading can take a few weeks to play out, traders have enough time to consider their decisions and execute them accordingly.
If you are planning to enter the crypto market, swing trading is perfect for you. Whether you plan to hold your position for a few days or weeks, you can make rational decisions based on analysis and factors that may influence your crypto-asset.
The last trading strategy in this list is scalping which is often used by seasoned traders. Sleeping traders are often called hight frequency traders (HFT) as they focus on small moves multiple time in a day. Some traders will enter and exit the crypto market in a matter of seconds.
Scaling requires a lot of risk management and research, that’s why it can be difficult to master. By taking advantage of the inefficiencies of the crypto market, scaplers can exploit the gaps and make small profits. With multiple small profits every day, they can add up to a higher percentage of profit over time.
Getting in and out of the market isn’t recommended for beginners but it is important that you understand the benefits of this trading strategy. Overtime, you too can make the most of this strategy and exploit the crypto market effectively and smoothly.
Crypto trading is not an easy task as it requires a lot of patience and skills to smoothly navigate the market. Make sure that you do all the necessary research required before investing in any asset in the market. If you are looking for ways to improve your trading? These tips will help you become successful in your crypto trading.