You’ll win consistently at blackjack only if you count cards. Same in poker — you need to know all hands and think ahead to come out on top. And don’t even get us started on chess. What’s similar about those games? They all require planning. Trading is no different. Without a clear battle plan, you have to rely purely on luck, and that rarely works out in your favor.
Thankfully, that’s an easy fix.
We’ve collected 4 awesome crypto trading strategies that will help any beginner trader take their game to the next level.
A trading strategy is a framework that helps avoid rash decisions. It’s like a battle plan that dictates when to buy or sell assets, what tools and metrics to apply, and when to enter and leave the market.
There are well-known crypto trading strategies that everyone uses. Some traders modify them with personal rules like “never trade after drinking”. You can make your strategy as extensive or as concise as you wish.
Let us paint an example.
Imagine a trader who bought a hyped coin. After following the price for three months, waiting for the big break, he or she notices a shart drop. Panic forces our hero do sell the holdings. Hopefully, at least a part of the profits will be restored.
Two months go by and the price starts growing as predicted. Was it bad luck? Not really.
Traders without strategy are gamblers. Occasionally, they get lucky, like everyone else. But in the end, they risk losing everything on a bad day. Having a trading strategy is crucial because it takes the gambling element out of trading.
An effective crypto trading strategy:
But there’s a catch. Even a great trading strategy won’t work if you choose the wrong asset.
There are over 2,000 cryptocurrencies. If you choose the wrong one, no matter how good your strategy is, it won’t be of any help. So how do you pick an asset? Here are a few tips to narrow down the options.
After picking an asset you need to figure out how to trade it. Depending on your approach, you will have to base your strategy on different indicators to predict price trends.
Let’s take at 4 different strategies with advice on how to apply them to get you started.
Day traders enter and exit on the same day and make money on the daily price fluctuations.
Day trading is a very mainstream strategy. In fact, the pop-culture image of a guy staring at three giant, chart-filled monitors usually paints a typical day trader.
The term “day trading” comes from the traditional stock market schedule. Note that the crypto market never sleeps — it’s open 24/7, no holidays. So, you can be a night trader, if you wish.
A few tips for successful day trading:
This strategy focuses on micro price movements rather than on large trends and huge value jumps. Scalpers profit from tiny ups and downs that occur countless times during a day. How is this strategy different from day trading?
The simple answer is — scalpers buy and sell more frequently. They never hold assets for prolonged periods. Sometimes, a scalper buys and sells within a matter of minutes. Or even seconds.
A few tips for successful scalping:
As we know, сryptocurrency prices go in cycles. Swing trader’s task is to buy low when the swings go down and sell when the swings reach the highest point. So, swing traders take advantage of regular waves of volatility.
Sometimes, swing traders hold positions for up to several weeks, though, they rarely any longer. The high point is that while two previous strategies require a constant presence in from of the terminal, swing trading does not. You can go about your day and still trade successfully.
A few tips for successful scalping swing trading:
Position, or as they are sometimes called, trend traders try to predict and use an incipient price trend. Traders who use this strategy track events like major, value-adding blockchain updates to pick promising assets.
After buying, trend traders hold assets until the first signs of a downward trend. At this point, they sell their coins to make a profit. The buy-sell cycle can last for a few months, or even longer.
A few tips for successful position trading:
Reading about trading strategies is great, but the only sure way to find out what works for you is to actually give them all a go on the Nimera Exchange. The exchange features a user-friendly interface, a good choice of currencies and trading pairs, and best of all, you can learn the ins-and-outs with our free in-depth trading guide.