Crypto trading: Beginner Strategies
February 22, 2021
It is not only profitable to trade in cryptocurrencies but is a life changing opportunity for people willing to risk their money. Such risk often ends up discouraging a lot of beginners even before getting started. Here are a few basic strategies which can be implemented, without much knowledge, to have a profitable trade.
- Long term holding: This is the simplest strategy which is more of a common sense to people and thus requires no special knowledge. Cryptocurrencies have seen a considerable growth over a period of time. Thus a cryptocurrency bought a few years back, would yield a very good return today. It is quite simple to follow. You just have to buy a cryptocurrency and wait over time for its price to rise. But it is not always best to buy the currency today. Its price history and expected trends must be checked beforehand to ensure that you don’t buy it at its peak.
- Crypto signals: This is a relatively new tool of the trade which has grown into a market trend in the crypto world. For beginners, it is always suggested to use crypto signals to do their trades. This is also a smart strategy to follow for those who are not full time traders. MyCryptoParadise is becoming a market leader in providing such signals. Their signals have already helped a lot of beginners to take advantage of their expert team of veteran traders.
- Day Trading: In day trading, the traders trade multiple times a day, even the same currency to gain through the regular market fluctuations. To make some real profit, the amount of money you risk needs to be higher. It is a riskier option than longer holdings. Thus, you should double check that your stop losses have been calibrated properly to prevent you from any abrupt losses. This form of trading depends on the volatility of the crypto market and is much more exhausting for the new traders.
- Scalping: Scalping can be termed as day trading taken to its extreme. In this form of crypto trading, the traders take advantage of the minutest of the fluctuations and thus, it is even faster and riskier than the day trading option. It turns beneficial only when a large number or value of coins are traded. This further increases its risk. This strategy depends on speculations, and feeds on as well as feeds the market volatility of cryptocurrencies. Cryptocurrencies which are backed by physical assets are less volatile and thus can’t be scalped upon.
- Swing trading: This is somewhat a sweet spot for the beginner traders who don’t want to lock in their money in Long term holdings, but also don’t like the exhaustion and risk brought by day trading and scalping. These work in a timeframe of a week or two. Thus, short term fluctuations are of lower concern to such trades. However, it is important for such traders to keep an eye on news around the cryptocurrency as well general international events which are likely to affect the investment behavior of people. Such effects are reflected very fast in the crypto market.
- RSI Trading: Beginners often use RSI or Relative Strength Index to make their trading decisions. This technical analysis indicator indicates if a cryptocurrency has been overbought or oversold. There are two thresholds of 30 and 70. If RSI falls below 30, it denotes that the price of the currency is likely to bounce back as it has been oversold. If the index is above 70, it indicates that there is going to be a haste selling of the currency as it has been overbought. This might result in its price crashing.