- Different Types of Cryptocurrency Trading
- Requirements for Choosing a Specialized Crypto Platform
- Cryptocurrency Trading Advice
- Conclusion
Table of Contents
Different types of Crypto Trading
Long term Crypto trading
The first is long-term crypto trading which is known as ‘buy and hold.’ In this method, crypto traders study the price trends of an asset over an extended period and hope that the asset price will increase in the future.
This approach is based on an assumption.
Short term Crypto Trading
Day Trading
Transactions are completed within a day. A crypto trader buys a cryptocurrency and sells it in a short span of time. No transaction is held overnight.
Swing Trading
A cryptocurrency trader uses this method when an asset is most volatile. This method uses technical trading signals to look for the turning point in short-term trends.Traders make a profit on the daily swing of the price of BTC whether upward or downward. Swing trading can prove to be very profitable in a short span of time if a crypto trader learns to read the technical indicators.
Scalping
Here cryptocurrency traders attempt to profit from minute-to-minute moves, often capitalizing on imbalances in order-book to make a heap of minor gains. Traders tend to read charts of 5 minutes or less to make a profit using scalping.
Prerequisites For Choosing A Specialized Crypto Trading Platform
Regulation & Security
A trading platform should be regulated by the concerned authority then only it can be trustworthy. The security of the cryptocurrency platform should be the utmost priority
Fees
Fess generally expresses a percentage of the transaction amount and an average cap of around 0.30%. Most cryptocurrency exchanges offer a volume-based fee structure means if you buy or sell a large volume of altcoins you have to pay smaller fees. Some exchanges use the ‘maker-taker’ fee model. Because every transaction costs a fee so one has to find platforms which best fitted for a profitable trade.
The Number Of Altcoins
Higher the number of altcoins and fiat currency available to trade, the higher the legitimacy of a cryptocurrency exchange
Trading Volume
Trading volume is also a major factor in the verge of finding the right crypto trading platform.The high trading volume provides you with an insight into that crypto trading exchange, that people are willing to spend their money on that trading platform.This justifies the reliability and good business practices of that network.
Reputation And Longevity
Reputation and longevity of a trading platform help in building trust, especially for beginners.
Crypto Trading Advice
Trade Crypto with a Clear Strategy
Start a crypto trade with the right mindset and a clear strategy.
Trading is a zero-sum game i.e for everyone who benefits someone else loses from another side. This determines that not everybody makes fortunes by trading cryptocurrency.
The cryptocurrency market is driven by large investors, and they eagerly wait for new investors to make mistakes.
Stay up to date with Trending Cryptocurrency News
Buy the rumour, sell the news. If you want to make a consistent profit from cryptocurrency trading then it is very important to follow the recent Crypto-market news. Sometimes it allows crypto traders to predict the ups and downs of the Cryptocurrency market
For example, if a big country ban Cryptocurrency or a reputed crypto trading platform got hacked. It may make the price go down.
Fundamental Analytics of Crypto Trading Assets
Analyzing the critical data of Cryptocurrency which affects the price like the number of wallets, the number of active wallets, the number of transactions per day, crypto trading volume, number of supported exchanges, etc can help to predict the value of the coin.
Source: https://studio.glassnode.com/metrics?a=BTC&m=addresses.ActiveCount
Technical Analysis
Technical analysis means studying chart patterns to predict the future price of a cryptocurrency. Technical analysis is purely based on the past (price and volume pattern) and trends of the coin. A technical analyst will analyze the past patterns and trends which will indicate the direction of price movement. They will look for continuous patterns as well as repeated patterns of a coin to analyze whether the trend will be ongoing or it will reverse at this very point.
TradingView is one of the most popular crypto charting and technical analysis tools for crypto traders of all crypto markets. They have integrated with a few of the world’s best cryptocurrency exchange sites and the results are super impressive.Trading view online charting tools have both free and paid subscriptions and the free program is more than enough for beginners.
From TradingView:
Trading the trends
“Make the trend your friend until it ends”
If I explain it in simple words, here, you have to simply read the long-term price trend and then trade in that direction. Generally financial market has a long-term price trend in which the overall motion of price will be in one direction for weeks, months, and even years.Of course, the price will move up or down all the time, but an apparent trend will be visible.
Beginners should start with Minimal Investment
Only trade with funds you can afford to lose. If you are new to crypto trading then there are very good chances that you will lose. But with practice and time, you will eventually make a profit in the future. Gain as much experience as you can because there is no alternative to experience.
Be Stoic. Stop being emotional and think like a Professional. Target and Stop
You should set a clear target level for taking profit and stop loss level for cutting losses.It means before starting a crypto trade you should set a clear goal that at this profit level you will halt the trade. Stop-loss means setting the loss level when you will stop the trade.
Sometimes when a coin value is depleting then the crypto trader assumes the situation will turn around and he will come out with a minimum loss or even profit. But they fail to understand the high volatility of Cryptocurrency, in a matter of a few hours that coin can get dumped up to 100%.
Risk Management
Never put all your eggs in one basket.
Your trading capital should be broken into smaller lots for multiple positions at different price levels. Manage risk across your portfolio.
Go for Smaller Profits. Don’t become too avaricious.
“Pigs get fat and hogs get slaughtered”
It pays to be greedy, but not too greedy — or else you’ll get into trouble.
If you get too greedy like a hog, you can end up losing it all. Never look for the peak of the movement. Look for smaller profits that will accumulate into a big one.
Make the right choice when picking a cryptocurrency to trade for profit
Cryptocurrency is very volatile. Most altcoins lose their value over time, sometimes very rapidly. So always trade Cryptocurrency which has some weight behind them. Therefore it means choosing Altcoins which have high or medium daily trading volume and have a broad community with continuous development.
ICO: Avoid Initial Coin Offering
Many newly launched crypto coins or going to launch coins offer crowd sales for the investor, i.e., the opportunity to buy it at a discounted price for a day or two.
This is done to increase the trading volume of the coin from day one.
Sometimes it yields a good profit for the investors as currency value doubles or triples in respect to a crowd sale price. But many coins proved to be a scam, either they are traded for a day or two then they disappear, or they run away with your earned Bitcoin.
Use Hardware wallets to store your coins
After completion of the crypto trade never leave your Cryptocurrency on the trading platform for long. It will be more secure to store your coins in a hardware wallet.
Where you can leave them without the worry of losing them.
Avoid Trading Cryptocurrency as your Primary Source of Income
This is a quite significant point. Most traders are at their best when trading isn’t their main source of income.
This way, the emotional burden is easier to control and maintain if your day-to-day survival is not dependent on it. Otherwise, this can lead to some desperate and drastic decisions because eliminating emotion is significantly harder to do when one’s livelihood is at stake.
Conclusion:
Follow the above-mentioned tips and keep patience.
Cryptocurrencies are here to stay Even if you only buy and hold the top cryptocurrency 99% of the time you will be in profit.
Also Read: Win up to 40 BTC in Bitget’s Trading Competition.
