There are many trading strategies that you can choose from to find the one that suits you. Traders build a cryptocurrency trading strategy based on technical and fundamental analysis. Strategies may include setting stop losses and take profits, limiting trade sizes, and having an asset balance. While there is no single best cryptocurrency to trade, speculating on the crypto markets with a solid trading strategy can help you decide which one suits your trading goals and limit your risks.

Day Trading                                                                                                                   

One of the most popular active trading strategies is day trading, which involves constant portfolio management and position monitoring. Day trading involves entering and exiting positions within a single day and speculating on the intraday price movements of an asset.

When it comes to the crypto market, which operates 24 hours a day, day trading has a slightly different meaning than traditional day trading. It usually refers to a short-term approach to trading, where traders open and close their positions within 24 hours or less.

Swing Trading                                                                                                             

Swing trading is a long-term trading strategy. Traders typically hold positions for longer than a day, but not longer than a month. Swing traders try to profit from waves of price volatility, which can often last for days or weeks. They use a combination of fundamental and technical analysis to make informed trading decisions.

Trend Trading

A trend trading strategy, also called position trading, involves traders holding positions for a fairly long period of time, usually several months. Trend traders try to profit from changes in the direction of cryptocurrency trends. They usually go long on an uptrend and short on a downtrend. They mainly rely on the fundamental factors that underlie the price movement of an asset.

Scalping

Scalping is one of the fastest trading strategies that does not involve waiting for strong price movements or clear trends. Traders who use scalping do not hold their trades open for long and focus on repetitive small price movements. They open and close their positions within minutes or seconds, usually multiple trades at once. Scalping is considered an advanced trading strategy and is not recommended for beginners.

Arbitrage Trading

Arbitrage trading means buying an asset in one market and selling it in another with the aim of taking advantage of the price differences between the two markets to make a profit. In the crypto market, you can buy a coin or token on one exchange and transfer it to another to sell it at a higher price.

For example, if the price of Bitcoin on cryptocurrency exchange A is $24,000 and on cryptocurrency exchange B it is $24,400, you can buy BTC on A, transfer it to B, and sell it for a profit of $400. There are already hundreds of crypto exchanges in the world, which opens up many potential arbitrage trading opportunities.

Note that unexpected price movements can wipe out potential profits and lead to losses.

Range Trading

Range trading is when traders use technical analysis to identify support and resistance levels for the price of a cryptocurrency. They assume that the price trend is likely to remain in this range for a certain period of time. Range traders buy when the price of a cryptocurrency approaches a support level and sell when it approaches a resistance level.

High-Frequency Trading

High-frequency trading (HFT) is an advanced trading strategy that uses algorithms and bots to automatically enter and exit trades. HFT involves computer science, complex market concepts and mathematics. This strategy is not suitable for beginners.

Dollar Cost Averaging                                                                                                   

Even with the best technical analysis tools, it is impossible to accurately calculate when exactly the market will bottom to enter a position and peak to exit it. An alternative approach is dollar cost averaging. Like investing in stocks, dollar cost averaging in cryptocurrency trading involves buying at regular intervals. This way, you will be buying cryptocurrency constantly, regardless of whether the price is high or low, resulting in an average purchase cost that is lower than the highs but still gives you the opportunity to make a potential profit. This takes the stress out of deciding when to buy, although you will still need to analyze market trends to decide when to sell and take profits. 

We wish you successful trading with ArtCap !