Some believe that cryptos are a shortcut to fortune, but it isn't always easy to make money. The volatile nature of the crypto market necessitates steely nerves, a winning strategy, and an intuitive trading platform to succeed. A lot of research will lead you to the steely nerves and intuitive trading platform you need. If you want to be a fantastic trader, here are some of the best Crypto Trading Strategies you may apply.
Taking positions and exiting on the same trading day is called day trading strategy. Intraday price changes in a cryptocurrency of a trader's choice are the goal of such a transaction. Traders typically use technical indicators to determine the best time to buy and sell a specific cryptocurrency. Day trading is one of the oldest Crypto Trading Strategies that many use.
For the most part, a cryptocurrency will trade inside a narrow range for a long time. For 30 days, Bitcoin fluctuated (we meant two or three years ago) between $8,601.40 and $10,210. This 9.4% range appears erratic until you understand that Bitcoin may vary by a whopping 42% in 24 hours.
The small size of the crypto market caps makes it possible for a single significant player to control it. To profit from a price range, some major movers may deliberately influence the price of a coin. You can also benefit from these patterns if you are aware of them.
The overbought and oversold zones are important for range trading. Overbought suggests that purchasers have exhausted their supply, and the stock is likely to decline, while oversold indicates the reverse and indicates that the stock is likely to rise. These zones may be found using chart indicators, which can be found in any credible stock chart program. The well-known Stochastic Oscillator and the relative strength index, known as RSI, are two of the most commonly utilized indicators for this purpose.
Pionex allows you to employ custom-built trading bots to automate your crypto investments. Whether or not you desire to trade manually, it's up to you, but there are 18 bots to pick from that can handle it all.
The bots available for trade include:
- Trades can be made in a defined price range using Grid Trading Bot.
- The Leveraged Grid Bot gives up to five times the leverage of a standard Grid Bot.
- With the help of the Spot-Futures Arbitrage bot, ordinary investors can generate passive income with minimal risk. This technique is expected to return between 15% and 50% APR.
- The Martingale bot conducts DCA buy and one-time sell to capture the fluctuation profit.
- A rebalancing bot allows you to keep your funds safe.
- The Dollar-Cost Averaging (DCA) Bot sets up regular purchases to counteract the effects of volatility.
- Traders can create stop-loss, take profit, and trail orders all in one transaction using the Smart Trade terminal.
Scalping can be profitable
Scalpers exploit increased trading volume for their own financial gain. Scalpers can leave a deal within seconds of entering it, and many employs automated bots to boost their trading frequency. The goal of a scalper is to get out of trade as soon as the market's perception of a coin changes due to news or a brief fluctuation. It’s one of the best Crypto Trading Strategies, but you need a lot of practice to understand it fully.
With a high bankroll, you may take advantage of this short-term day trading approach in the cryptocurrency market. Staking a huge amount ensures that the scalp returns a substantial amount of money (0.5 percent of $100,000 is $500, enough for a luxury automobile payment) despite the low ROI of each trade. Small gains build up quickly when you regularly trade, which can be as fast as 10-20 trades per minute.
High-Frequency Trading (HFT)
Quantitative traders utilize HFT, one of the algorithmic Crypto Trading Strategies. This entails the creation of trading bots and algorithmic tools to facilitate the rapid entry and exit of a crypto asset. It is very important to have a solid foundation in mathematics and computer science to build these bots. So HFT is one of the Crypto Trading Strategies suited to more experienced traders than those just starting.
It's best to believe that timing the crypto market is next to impossible when locating the optimum entry and exit points. As a result, 'Dollar Cost Averaging' is a smart choice among other Crypto Trading Strategies for investing in bitcoin (DCA). DCA is considered an investment strategy in which a set amount is invested regularly. It is a method that enables investors to avoid the time-consuming task of timing the markets and accumulating long-term riches.
However, the DCA kind of departure plan can be a challenge. It necessitates a thorough knowledge of market trends and cycles. Exiting at the right time is made easier by studying technical charts. Before deciding, crypto investors should keep an eye out for oversold and overbought areas. WazirX live charts will help you better comprehend the technical charts of different cryptocurrencies.
Build balanced portfolio
Cryptocurrency trading is still in its infancy. Some governments are open to cryptocurrency trade, but others are wary of it. With so many central banks attempting to improve regulation of digital currencies, trading in cryptocurrencies is often a risky business. Investors can, however, avoid being caught off guard by high volatility by using certain Crypto Trading Strategies.
Investing in a diversified cryptocurrency portfolio, such as Bitcoin, Dogecoin, and Ethereum can go a long way toward reducing volatility.
In addition, investors can choose to make monthly investments in various other cryptos. In the long run, this will enhance your risk tolerance systematically, which will benefit your portfolio.
Arbitrage, one of the most profitable Crypto Trading Strategies
Arbitrage is one of the Crypto Trading Strategies in which a trader buys and sells crypto on different markets. The spread is the main difference between the purchase and sale prices. Because of the disparity in liquidity and trading volume, traders have the potential to make money. To use this opportunity and benefit from it, you'll need to sign up for trading accounts on exchanges where the price of the cryptocurrency you're trading at differs widely.
It's no secret that cryptocurrency is a highly volatile investment. Previously, the price of Bitcoin had fluctuated by more than 30 percent in a single session. Bitcoin futures trading is a way to bet on the market's volatility. Buying both a call and a put option simultaneously is one of the best Crypto Trading Strategies. The strike price and maturity date should also be comparable. To get out of a position when the value of a cryptocurrency plummets or soars, you must simultaneously sell both the call and the put option.