The top 10 Crypto trading strategies one must know that can make trading exciting and secure
About 10 crore Indians, according to a recent news article, are cryptocurrency owners. In all likelihood, the number will increase throughout this holiday season. Yet cryptocurrency trading is just as risky as investing in stocks and commodities. Market aficionados must create tactics that can make trading exciting and secure at the same time if they want to reap the long-term rewards of cryptocurrency trading. Let’s start by going over some methods that can provide you with favorable results.
Daily Trading: Using this trading method, positions are opened and closed on the same day. By engaging in such a transaction, a trader’s goal is to book profits during intraday price fluctuations in the cryptocurrency of his choice. Investors frequently use technical indicators to determine the best times to enter and exit a trade for a certain cryptocurrency.
Using A Range: Market participants also rely on seasoned experts, who daily provide support and resistance levels. A resistance level is a price that is higher than the present price since “resistance” alludes to the limit where the price may rise. Being a level below which a cryptocurrency price is not expected to fall, a “Support” level is always lower than the present price.
Scalping: Increased trading volume is used in this trading approach to generate profits. Even though there is danger, a wise trader observes the margin requirement and other key regulations to prevent negative trading outcomes. Scalpers examine the cryptocurrency asset, historical trends, and volume before deciding on an entrance and exit point within a day.
Trading at a High Frequency (HFT): Quant traders utilize a type of algorithmic trading approach called HFT. This entails creating trading bots and algorithms that facilitate speedy entry and exit from a cryptocurrency asset. Such bots require the development of complicated market concepts as well as a solid foundation in mathematics and computer science. As a result, experienced traders would benefit from it more than newbies.
Average Cost in Dollars: It is important to understand that timing the market is nearly difficult when trying to discover the ideal entry and exit points in a crypto market. Dollar Cost Averaging is a sensible strategy to invest in cryptocurrencies (DCA). DCA is the term for recurring, fixed-amount investments. By using this method, investors can avoid the laborious task of market timing and create long-term riches.
The volatility might be greatly reduced by creating a balanced portfolio that comprises several cryptocurrencies including Bitcoin, Dogecoin, and Ethereum. Also, investors can keep a certain amount of regular investments in a variety of cryptocurrencies. In doing so, you’ll gradually build your appetite for risk, which will benefit your portfolio’s long-term results.
Do Not Base Trading Decisions on Hype: One of the pitfalls new investors frequently make is relying solely on social media for cryptocurrency news. Never base investment choices on the hype generated on social media. Since the subject of digital currency is so popular, erroneous information tends to spread quickly.
Primary Study: Primary research is one of the most crucial trading tactics. To carry out primary research on the worth of the item you want to buy, you don’t need to be an expert trader. This entails staying current on all news about the cryptocurrency business. WazirX facilitates this by compiling all the news stories you must read before beginning your day.
Arbitrage: The trading approach known as arbitrage involves buying cryptocurrency on one exchange and selling it on another. Spread is the term for the difference between the buy and sell prices. Trading volume and liquidity differences present opportunities for traders to make a profit. To take advantage of this opportunity, you must create accounts on exchanges where there is a significant price spread for the cryptocurrency you are trading.
Banking on the Volatility of Bitcoin: It is well known that one of the most volatile asset types being traded is cryptocurrency. Recently, the price of bitcoin changed by around 30% in a single session. Trading Bitcoin futures allow you to place a bet on volatility. The best course of action is to purchase both a call and a put option at the same time. Moreover, the strike price and expiration date must be comparable. You must sell both the call and put options at the same time if you want to get out when cryptocurrency prices fall or climb sharply.