Trading Strategies for Cryptocurrency Traders to Follow

Like trading in commodities and equities, crypto trading has its own pitfalls and risks. But earning long-term benefits is also possible. To earn long-term benefits from trading in digital currencies, market enthusiasts have to develop such strategies that make trading safe and fun at the same time. On that note, let’s go through a couple of strategies that are helpful in getting favorable returns.

Day trading

This particular trading strategy involves taking up positions and exiting on the exact same day. The aim of the traders while going for trades is booking profits in the intraday price movements in any of the chosen cryptocurrency. For any successful trade, investors tend to depend on technical indicators to find out the exit and entry points for a specific crypto.

Range trading

Market players tend to depend on expert analysts, who offer support and give out resistance levels every day. Here, ‘resistance’ is the point to which the prices might rise and thus, resistance levels refer to prices over the present price. On the other hand, ‘support’ refers to the level below which the crypto prices aren’t supposed to fall. Thus, the support level always remains below the present price.

Scalping

It involves the use of higher trading volumes to book the profits. Though there are risks involved, the smart traders take care of the margin requirements and other crucial rules to avoid any bad trading experience. As such, scalpers look at the crypto assets, volumes, past trends, and select an entry and exit point in a day.

High-Frequency Trading

High-Frequency Trading is the type of algorithmic trading strategy that quant traders use. It involves developing trading bots and algorithms that help in faster entry and exit of crypto assets. Development of such bots is all about understanding the complicated market concepts, with a good knowledge of computer science and mathematics. Thus, it suits the advanced traders more than the beginners.

Dollar-Cost Averaging

In terms of finding the right entry and exit points in crypto markets, keep in mind that it’s almost impossible to time the market. Thus, a good idea for crypto investments is the DCA (Dollar Cost Averaging) route. DCA is all about investing a particular amount at a specific interval. The strategy lets investors deal with the tiring job of building wealth and timing the markets on a long-term basis.

Building a balanced portfolio

Crypto trading remains at an evolving stage at present. Though several countries are starting to welcome crypto trading, many continue to be skeptical regarding it. In fact, central banks all over the world are looking for effective ways to regulate the digital currencies. Thus, crypto trading using something trustworthy like Quantumai App is no longer such a risky affair. Investors can steer clear of volatility if they take the right steps.

The bottom line

You need to develop strategies if you want crypto trading to be more fun and less risky. Hopefully, the ideas and tips given above will give you some direction in this regard.