Crypto strategies you should know

Over the last few years, cryptocurrency is making sound in the financial sector and its popularity is growing constantly. Trading and Investing are different terms. A trader always has in mind to get more money in a short time. But each trader has a different approach. The strategy they follow is always the active one. The uncertain nature of the trading with more risk will give them profit with the short-term volatility.  There should be some analysis before you invest or trade with all your hard-earned assets.

Without any cryptocurrency strategy, one can trade in it but might not be successful to get that much profit. So, what is the right way to trade or invest in cryptocurrency? You can see many claims to be rich with cryptocurrency and they give you many strategies. But all not good to be followed.

The best and the hot topic in the market is Crypto these days and most of them know only Bitcoin as cryptocurrency. Well, that’s quite obvious as it has made that impact on crypto trading. Bitcoin is purely under the decentralized system which is blockchain technology. This is so advanced that people are blindly investing to get profit from it and feel secure about their wealth.

Trading in Bitcoin is the best strategy, but you should know that there are many like over 800 cryptocurrencies in the market to be explored. If you come to know how you can trade into Bitcoin, your journey in crypto trading will be successful.

Risk tolerance is an important part of cryptocurrency trading. This is the degree of risk an investor is capable to hold in their trading activity. The risk tolerance is bound to change in the trading process. For short-term investment, traders should consider a time-based risk tolerance. Long-term investments have higher risk levels yet chances of more profit.

The fundamental analysis is for identifying the actual value which is hiding under the current value. The key measures you should follow are explained below:

  • RSI: The Relative Strength Index (RSI) is a momentum oscillator to measure the speed and change of price movements in any of the financial transactions. RSI is also used to identify the general trend. So in the case of cryptocurrency, it checks if the cryptocurrency is overbought or oversold.

Why do we need to consider the RSI in cryptocurrency?

The pace in RSI will increase as the asset price increases. The uptrend is considered weak when the speed decreases.

  • Moving Average(MA): The moving average is a technical analysis tool that untwists the price data by initiating a constant updated average price. Through Moving average, you can check the price of a cryptocurrency over time which makes it easy to track the trend. There are two types in it:
  1. Simple moving average: This calculates the average range of price (closing price) to the number of periods in the range. Since it is not so accurate, the other type is used in most cases.
  2. Exponential Moving Average (EMA): It is more or less than SMA, but it deals with the quick price fluctuation and price trend in cryptocurrency. Most of the traders find EMA is the better option for SMA.

Best crypto trade strategies

  • Day Trading: Day trading is the process of guesswork on financial assets over a single day. It means buying and selling cryptocurrencies within a day to make some profit. Day trading can be lucrative but can be dangerous for the one who is new to the crypto world. If you play it safe, the profit is yours. There are two ways a day trader can approach it.
  • Scalping: This is the most used method by traders. Through this approach, traders get profit in a single day with the movements of the cryptocurrencies.
  • Range Trading: This strategy requires you to identify trading ranges with the highest and lowest price points to trade within.
  • Swing Trading: It deals with the weekly trade which shows the short and medium terms of profit in cryptocurrency trading. The fundamental analysis can be used in this case to get your research done.
  • Position Trading: Trend followers usually go for this. They will identify the cryptocurrency from which they can invest for a longer term like, one year or so. It is the most stable and profitable crypto strategy. In this, the trader puts in the initial amount and once the trend is closed, he sells it for a profitable price.
  • Bot Trading: In this, traders take advantage of the cryptocurrency market which trades all over the time (24/7) globally. The design and training process is carried out under this trading for more profitable trades. This Bot trading is usually used by big investors or fund houses which includes huge investments in money, time, and effort. Daily traders may find it complex.

Trading is a continuous process where everyone has to keenly observe the things going on in the crypto market, make the analysis, and choose the best trading. Trading is not easy to understand but there is a lot to learn about it before we jump into this field. The techniques you use for trading decide the profit you gain. When you complete the learning process, trading could seem to be an easy process for you and you will understand the pitch of the market. Implement the things you learn and keep looking for new and effective strategies in the cryptocurrency world.

Cryptocurrencies have advanced blockchain technology that is doing a revolution in the financial market. Also, since these currencies can’t be seized or printed, it is considered to be secure to hold the asset. Cryptocurrencies are highly risk-based which is why we recommend you to learn the process completely and carefully invest with safety protocols. Since each individual and their situation is different, you should always consult before making any investments in the crypto field. No one can give you a warranty on the assets you put in cryptocurrency. Hence, it is the best practice to know more about the strategies and invest wisely.

Wishing everyone a safe investment in the crypto world!