Understanding Different Crypto Trading Strategies

Right from the beginning, cryptocurrency markets have exhibited insane volatility. In stock markets 2% gains are a big deal, however, in cryptocurrency markets, traders can book heavy profits within minutes. While there are lots of profit-making opportunities, it’s pretty easy to book losses too and that is why many cryptocurrency enthusiasts turn into HODLers. But the path of hodling is equally challenging. Here are the hodling pitfalls:

New investors tend to buy crypto when the price rally is going on and end up buying at higher prices. Then they get caught into the trap of buying at top and selling when the market tumbles.

Hodlers are not able to take advantage of the crypto market volatility. They wait for the market to reach the top but remain unsure about the best time to sell.

Is crypto trading the right way to maximize gains?

A non-seasoned crypto trader has good chances to outperform a HODLer’s profits. However, he needs to strategize how he trades and must employ proper risk management tactics. Certain white Label bitcoin Exchange Software support different kinds of trading strategies to help traders maximize their profits.

First of all, let us understand – What is a trading strategy?

A trading plan that helps you discipline your trading activities is known as a trading strategy. A good trading strategy helps traders mitigate the financial risks of the highly volatile crypto market. Here are some of the points one must consider while creating a strategy:

       Which assets should do you trade?
       What setups should do you take to maximize the profits?
       Buy Bitcoin trading Software that supports stop-loss placement
       Use White Label bitcoin Exchange that offers more tools and indicators for efficient trading
       Use White Label bitcoin Exchange Software that provides you charts to measure your portfolio performance.

Most used trading strategies

Remember while you are trading crypto, you must constantly monitor the market and manage your portfolio:
 
1. Day trading
As is evident from the name, it is a kind of trading that involves opening and closing a trade on the same day. In simple word, day traders try to make the most out of the crypto asset price movements within one trading day (for crypto space this means 24 hours).
A day trader studies the market watches the price action, and conducts a technical analysis of the market to build a trading strategy. This type of trading can turn out to be very profitable if strategies are well-devised thus this type of trading is suitable for seasoned traders.  

2. Trend trading
The term is self-explanatory and the trend traders hold their positions till the directional trend continues. As a result, these trading positions are held for a longer time. When the asset is up-trending, the traders might long the position and when it’s down-trending, they might short the position.
White Label Cryptocurrency Exchange Development services embed the exchanges with capabilities to create long/short positions. Unlike day trading, trend trading requires traders to stick to fundamental analysis rather than technical analysis. Along with that, they need to keep an eye on MA (moving averages), trend lines, and some technical indicators. It is more suitable for beginner traders.

3. Scalping
Scalping is a trading strategy that allows traders to make gains by making small trades multiple times in a day.  The scalpers might choose to hold the position for a long time or open/close their positions within minutes. It is also popularly known as high-frequency trading. It is more suitable for experienced traders.
 
4. Swing trading
If someone is a beginner or tends to be a long-term trader, swing trading is for him. Generally, a swing trade goes beyond a day but is shorter than a month. This is where traders ride the waves of market volatility and make the most of it. They need to conduct both technical and fundamental analysis to build a robust strategy.

For beginners, swing trading is one of the most convenient strategies to pick up. This allows them to wait for the trade to unfold over a span of time.
Closing thoughts

A crypto trading strategy is something that needs to be worked up after conducting fundamental and technical analysis. We tried to educate you about some of the most common crypto trading strategies, however, there are many more like position trading, intraday trading, range trading, and more. Along with this, many other factors like financial aspects and risk capacity help traders determine the crypto trading strategy.

At Antier Solutions, we are a team of blockchain experts who build solutions like cryptocurrency exchanges, smart contract-based MLMs, and more such products. If you wish to buy bitcoin trading software contact us over call and talk to our experts.