Are you tired of the same old crypto trading strategies? Are you ready to take your trading game to the next level and become a true crypto maverick? Look no further, my friends, for we have compiled a list of the 7 best crypto trading strategies for the modern trader looking to shake things up.
But that’s not all! In this article, we’ll also explain how to do research and which coins to focus on. After reading, you’ll be able to get started and earn those coins, so let’s now waste time and begin!
Doing crypto trading research
Remember, past performance is not an indicator of future performance and that crypto-assets are highly volatile and risky investments. Still, high-quality research will put you in a more comfortable position so it’s imperative to do it. In that name, here’s what to do:
- Get to know the crypto’s backstory: Before you invest in any crypto, you gotta know its origin story like Batman knows Gotham. Understand the technology behind it, its purpose and the team behind it. This will give you a sense of its potential and future prospects, like a crystal ball. To find the info you need, we suggest browsing reliable and trustworthy crypto media outlets such as tradecrypto.com, that maintain daily coverage of the latest crypto trading events.
- Keep an eye on market trends: Keep an eye on the market trends like a hawk. Look for patterns and trends in the price movements and identify key resistance and support levels. It’s like reading a book, once you know the ending, you know the story.
- Analyze the charts: Look at the charts like a detective, searching for clues. Identify patterns and trends in the price movements, like head and shoulders, triangles, and trend lines. It’s like solving a puzzle, piece by piece.
- Follow the news: Keep up to date with the latest news and announcements like a paparazzi. This can include updates on new partnerships, developments, and regulations. It’s like keeping tabs on your favorite celebrity.
- Learn from the experts: Learn from experienced traders and market analysts like a student. Follow their analysis and insights and try to understand their reasoning behind their trades. It’s like learning from a mentor.
- Diversify your portfolio: Diversify your portfolio like a chef, by investing in multiple cryptos instead of putting all your eggs in one basket. This will help to spread out the risk, like spreading peanut butter on toast.
7 Best crypto trading strategies
The moment we’ve all been waiting for. Here are the seven strategies that rest on sound fundamentals. It’s up to you to use them wisely. They won’t get you profits every time, but they’ll certainly steer you in the right direction.
The “HODL” Strategy
This strategy is for the true believers in the crypto world. “HODL” is a term that originated in a Bitcoin forum and stands for “hold on for dear life.” Buying and holding onto a cryptocurrency for a long period of time, weathering the market fluctuations and waiting for the value to increase. This is a great strategy for beginners who, while learning crypto trading for beginners, need only wait and then later take on the more advanced strategies. It’s a long-term strategy and requires a high level of patience and faith in the cryptocurrency’s potential.
The “FOMO” Strategy
FOMO stands for “fear of missing out.” This strategy involves jumping on the bandwagon of a cryptocurrency that is experiencing rapid growth and high demand. It can be a high-risk strategy as the rapid growth may be temporary and the value of the cryptocurrency may drop just as quickly. However, it can also be highly profitable if executed correctly.
The “Arbitrage” Strategy
This strategy is taking advantage of price differences between different crypto exchanges. A trader can buy a cryptocurrency on one exchange at a lower price and then sell it on another exchange for a higher price. This strategy requires a good understanding of different crypto exchanges and their prices, as well as the ability to move funds quickly between them.
The “Scalping” Strategy
You’ll need great nerves for this strategy, but if you can remain cool under pressure, this strategy is for you. It’s about making multiple trades in a short period of time, usually within minutes or hours. The goal is to make small profits on each trade, which can add up to significant returns over time. This strategy requires a quick decision-making ability and the ability to handle a high volume of trades.
The “Breakout” Strategy
This strategy involves identifying key levels at which a cryptocurrency’s price has previously been resistant to falling below or rising above. When the price breaks through these levels, it can indicate a significant move in the market, which can be used to make profitable trades. This strategy requires a good understanding of technical analysis and chart patterns.
The “Position Trading” Strategy
You find a position and you stick to it – it’s all about long-term commitment with position trading. It means holding onto a cryptocurrency for a medium to long-term period, usually several weeks to several months. The goal is to capitalize on the overall trend of the market, rather than trying to make quick profits on small price movements. This strategy requires a good understanding of market trends and the ability to hold onto a position for an extended period of time.
The “Algorithmic Trading” Strategy
With AT, you’ll be using a set of algorithms and computer programs to execute trades automatically. This can include utilizing complex mathematical models to analyze market data, as well as executing trades based on predefined rules and conditions. This strategy requires a good understanding of programming and the ability to design and test trading algorithms.
5 Crypto coins to invest in
After choosing a strategy, it’s time to also choose a coin. These five coins have all shown great stability so they represent sound investments. It’s also important to diversify your portfolio and not to invest more than you can afford to lose, so don’t stick to just one coin.
- Binance Coin (BNB): The world’s largest crypto exchange is like a respected king presiding over his kingdom from the fairytale, all noble and taking care of its people’s (crypto) needs. Binance Coin is the native token of the Binance cryptocurrency exchange. It has a wide range of use cases, including being used as a medium of exchange on the Binance platform and also as a way to reduce trading fees on the platform.
- Cardano (ADA): Cardano is a smart contract platform that aims to provide a more secure and sustainable ecosystem for dApps and smart contracts. It is built on a proof-of-stake consensus algorithm and has a strong team of developers and researchers.
- Solana (SOL): Solana is a high-performance blockchain platform. Its aim is great – to provide fast and low-cost transactions. It has been gaining popularity in the decentralized finance space, that is also known by its abbreviation DeFi, and has a growing ecosystem of dApps and projects built on top of it.
- Chainlink (LINK): Chainlink is a decentralized oracle network that connects smart contracts to real-world data. It is considered to be a key infrastructure layer in the growing DeFi ecosystem and has partnerships with some of the largest companies in the industry.
- Litecoin (LTC): Litecoin is a decentralized cryptocurrency that is based on the Bitcoin protocol. It takes care of some of the issues that Bitcoin has, such as slow transaction speeds and high fees, and was actually designed to be more advanced than old Bitcoin in this regard. Litecoin is considered to be a more accessible and user-friendly version of Bitcoin and has a strong community and development team.
Each of these strategies has its own set of pros and cons, and what works for one trader may not work for another. It’s important to do your own research, understand the risks and rewards, and test out different strategies before committing to one. The same goes for crypto coins.
Remember, the key to success in the crypto trading game is to always stay informed, stay adaptable and never stop learning. Happy trading, crypto mavericks!