Cryptocurrency Trading Strategies

Every day there is someone who gets tired of sitting at his / her work table and decides to become a trader. Many people think that the cryptocurrency market is a very easy niche to start with. This is the first and main reason for its failure.

However, there are many who learn to operate . After receiving basic knowledge, they understand that strategies are necessary. Traders don't just win from technical analysis or fundamental analysis. It is essential to learn different tactics and how to implement them.

A cryptocurrency trading strategy is a set of actions aimed at creating interest in the crypto market. No one can guarantee 100% that you will always earn income. However, a trading strategy will ensure that you don't fail.

Cryptotrading Strategy

Why is trading so popular, but the world only knows of a few brokers or traders who really succeeded? This is due to the large amount of information that you have to absorb. Also, you should use all this material when choosing the strategy.

Don't follow someone else's ideas. Follow the market situation and try to understand its signals

First of all, when using or creating a cryptocurrency trading strategy, you must understand that this is the most unstable market. In just a few days, you can see price fluctuations between 20-30%. For example, if you were to sell stocks on NASDAQ, it is almost impossible for indices to change in one day. However, the cryptocurrency index can change by 100% or even more.

Second, Bitcoin is "the father". Therefore, prices often follow their trend. If you are going to trade altcoins, the most important part of your strategy should be to "check the Bitcoin situation."

Cryptocurrency traders generally don't mine coins. However, they are always aware of the cost of mining. For example, Bitcoin Cash got a lot of value from the forks (Aug 1, 2017), due to miners needing a lot of resources to find new blocks. If the mining cost increases, the price ratio also increases.

Finally, you must follow all the news about politics and economics. This news has a great influence on the crypto market. For example, when Iran attacked the US military bases in Iraq, the Bitcoin price ratio increased from $ 8,000 to $ 8,300. This situation created an uptrend for the entire market. You cannot be a successful trader if you don't follow the news.

These are the three fundamental principles of crypto trading. Traders have created various strategies based on these aspects.

1. Buy & Hold . It has more to do with investing than trading . People buy an asset and hold it for a long time. They try to predict prices for months and consult charts for long periods of time. This strategy is primarily based on fundamental analysis.
2. Swing trading. This crypto trading strategy consists of using correction during the formation of a trend. Traders must enter the trend at the time of correction. Swing trading means swinging after the trend.
3. Day trading. The style of this strategy refers to its designation. It means to trade the exchange within a one-day trading session. Positions opened on that day are not carried over to the next session overnight.
4. Scalping. This is "high speed" and "high frequency" trading. A trader opens and closes positions in periods of 1 to 15 minutes. Ideally, each deal brings a small profit. In short, a small profit from each transaction generates great income.

Day Trading Strategy

Most "day traders" spend their lives making a profit from cryptocurrency transactions. They do dozens of exchanges and transactions every day. You can earn huge rewards, but it takes a long time (months or even years) to become a successful day trader.

The first thing you should find is an exchange with many distinctive cryptocurrency pairs.

A pair indicates two coins or tokens that are being exchanged. For example, if you think that the price of Monero could increase against the price of Litecoin, you should find an XMR / LTC pairing

The next requirement is a highly liquid platform. It is your guarantee for a permanent connection with the buyer / seller. Otherwise, you won't be able to close the deal when the price is dropping.

Very often, day trading is associated with a simple path to wealth. In fact, this rarely happens. Until you get a billion dollars in your bank account, the road is long and difficult. The SEC warns: "Day traders tend to face serious financial losses in the first month of trading."

You have to analyze a lot of information and be ready to connect each trap with downtrend or bullish trends. As a trader, you must deepen your understanding of price fluctuations and use them for personal gain.

Tips for Day Trading with Cryptocurrencies

Day trading can provide great income and losses. If you are interested in the first one, you must remember that it is not "free money". You must know how to manage stress and have a cool head, in addition to following all your tactics.

Before day trading, you should check the high volatility of the cryptocurrencies traded. This provides more opportunities to make deals, allowing you to make higher profits.

The cryptocurrency traded must be liquid. Therefore, you must verify this on the exchange platform and the currency (token). How do you do this? You can go to Coinmarketcap and search for 24 hour cryptocurrency volume.

Trading Strategy for Beginners

The beginning is the most difficult stage in every niche. On the other hand, it is also the easiest stage, because you have to do very little to get your first achievements. Traders say that "HODL" is the easiest scheme for beginners. "HODL" holds long-term assets in the belief that the price will increase in the future.

Its simplicity is based on the fact that the trader only needs a little knowledge to make it rewarding. Why? It's also straightforward because all cryptocurrencies have tremendous long-term growth. Besides, you can also invest in popular coins or tokens to minimize risks.

So what should be done? Buy a cryptocurrency in perspective and keep it for months. For example, you could buy 100 Ethereum and simply check the index 3 years from now. The probability that it is higher is almost 100%.

You don't have to check prices very often. In fact, you should avoid checking it, since you can sell your assets too soon.

This strategy is one of the least effective. There is no guarantee that all cryptocurrencies will increase over the years. However, all trading is statistics. The charts show that all the people who bought cryptocurrencies during the downtrend in early 2018 show an income increase of 100-200% today.

The best trading strategies for cryptocurrencies in 2020

One of the most popular strategies among traders is statistical arbitrage . It seems very complex, but after several offers, you will find that it is quite simple. The way this strategy works is to buy coins on one exchange, then sell them on another platform, and finally sell for fiat money. The logic of this trading strategy is to abuse the delay in price correction between these exchanges.

The only difficulty is related to the rate. You have to use low commission platforms to make a profit. You should be careful when using statistical arbitrage, because a fee can be even higher than the potential income.

Following the bears in the market for the past 2 years, many investors abandoned cryptocurrencies. Therefore, its volatility fell. This is good for banks, but not for traders. However, they will continue to operate. Most of them are of the opinion that the HODL strategy will be more popular in 2020 than in previous years.

Bitcoin Trading Strategy

Most of the people start their trading journey with BTC, because it is the most traded and valuable cryptocurrency. That is why you must be fluent with the crypto trading methodology. When choosing a trading strategy for Bitcoin, you must rely on your own experience and style.

If your character is hotheaded and you tend to make mistakes, you must use an algorithmic strategy. This means using formulas to identify points where different orders need to be done. Today, such strategies are connected with the use of trading robots, but you have to configure them properly to be successful.

If you are disciplined and manage risks easily, you can try trading on margin. This allows you to deposit less, but get the same benefit. However, each order needs to be done very carefully or you could get into debt.

Trading Strategy for Bitcoin in 2020

Your trading strategy for Bitcoin will be the same strategy used for alternative cryptocurrencies, such as swing, day trading, scalping and others. Most of your tactics will be similar, but you will have more opportunities, because Bitcoin is the most popular digital currency.

However, if you have already invested in BTC, you may want to diversify your risks with a hedging strategy. This is the practice of placing tactical orders to decrease the risks of existing positions.

In this case, you will open a short to BTC, which implies the sale of the asset for the real market value, under the pretext that it could decrease. If it really falls, you would buy it again for a lower cost and make a difference. This means that any loss in your first BTC position would be offset by the earnings from this short.

Day Trading Strategy for Bitcoin

Day trading has the same principles for each cryptocurrency. However, there are a few day trading benefits for Bitcoin:

• high supply and demand;
• many exchanges allow the leverage of trading with BTC;
• universal access: all exchanges have added BTC to their lists;
• BTC-based exchanges provide lower fees and minimum deposits for BTC.

There are two very popular day trading tactics for BTC:

1. Breakout This opportunity arises when the currency passes a certain level of support or resistance. Once the level is broken, the cryptocurrency trades in the same trend. The moment you see the potential breakout, you should open the position. The "stop-loss" should be placed below the 1st resistance zone.
2. Breakout test. There may be an uptrend after the first breakout, but then the bulls will return to this level to check for resistance. If the volume is higher at this stage, it means that prices will reach a new high.

How to become a successful cryptocurrency trader?

There is a simple answer: you must be fully prepared. Some aspects have already been mentioned:

• understand the market;
• controls risks;
• read the news;
• look at BTC charts;
• take into account the cost of mining.

A more important step is to build a trading plan. This should include your goals for each trading period, your style (how often you will trade), and your attitude to risk.

Take a look at the Twitter of other cryptocurrency traders. They give useful information very often. But use it only for your analysis, not to make deals.

Avoid all pump and dump groups. Many newbies to this market think they can

benefit from connecting with such groups. In fact, they are strategies based on incorrect statements and analysis. Therefore, there is a greater chance of losing all your money.

Lastly, learn as much as possible. This market is very new, so there are many unknown "hacks" and traps. To be successful, you must follow all the news about this market.

Choose a reliable crypto exchange

One of the most important rules that every trader has is to use only proven exchanges. This will provide fast offers, high security, and easy withdrawals. In addition, your personal data will not be used for external purposes. How do you choose an exchange?

• check the daily volume;
• read documentation;
• find out information about their headquarters and equipment;
• checks for secure 'http' connections (web address must start with "HTTPS").

Also, try to use an exchange in your country. This can simplify compliance with regulatory changes. Please note that some platforms only support a limited number of countries.

Use a reliable platform for cryptocurrency trading

Today, you can find many exchanges with different conditions. However, as mentioned above, you should choose a trusted crypto exchange. Here is a list of some popular platforms that provide good customer service:

• Binance
• Crack
• Poloniex
• StormGain

Remember this: if you choose a treacherous platform, you may lose not only your trading budget, but also personal data, including billing information.