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Most Effective Crypto Trading Strategies That Investors Should Know

Trade coin, also known as a form of buying and selling coins, is a term that has become so popular on major crypto exchanges these days. There are many investors who have made a lot of profits from trading coins by applying the tools/indicators or using suitable trading coin strategy, but there are also many people who have had to receive negative results when investing in trading coins without carefully understanding how to use, operate and use the strategy properly. Here, we will reveal top 9 effective crypto trading strategies to help investors earn huge profits. Let’s find out together!

1. Day Trading Strategy

Day trading is a strategy that takes advantage of small price fluctuations to buy and sell coins many times in the same day, and traders will usually have to settle their positions during the day and not hold them overnight to get the money. Unnecessary risks can be minimised. Coins on crypto exchanges can fluctuate up to 5% per day. Day trading is really an effective and suitable strategy. This strategy is intended for active investors, but in return, this strategy has a high level of risk. Investors will have to constantly grasp the cryptocurrency market to promptly make informed decisions in buying and selling coins. To implement this strategy, traders should choose exchanges with low commission and spread fees to maximise profits. Investors need to rely on technical indicators to find a good entry point for your trade such as: Moving Average (Ema), TBD Line, Relative Strength Index (RSI). 

2. Long Term Holding

Long term hold is a strategy that does not require much knowledge because sometimes your ignorance is a blessing. The rules for implementing this strategy are very simple, not as sophisticated as day trading: Buy a coin that you feel it will have full potential growth in the near future and hold it for a few months or a few years. You can use cost averaging (DCA) to improve your long term holding strategy. It is the most effective strategy among the 9 mentioned names, but it is also one of the strategies that investors should know and apply appropriately.

3. Swing Trading

Different from day trading, swing trading is done over a longer period of time usually a week or two weeks in order to get the most out of all the benefits based on the large volatility of the cryptocurrency market. Strategists using swing trading are usually interested in daily, weekly, or even monthly coin price increasing and decreasing charts and less having to stick to the coin market to make decisions like Day Trading. Currently, Swing is gradually becoming more and more popular. This makes it an ideal strategy for traders who use technical indicators skillfully combined with fundamental analysis to get great capital. Unlike Scalping, this strategy does not require a stop loss (SL) order. Strictly convenient for users’ transactions. Encouraging investors who understand the coin exchanges well to trade funds or use leverage. Swing Trading is more suitable for people with medium or low capital.

4. Scalping 

Scalping is a fast-paced trading strategy with the ability to generate a lot of profit from trading on crypto exchanges quickly. Scalping is quite similar to day trading strategy, but it is faster paced and also offers a higher level of risk for investors and should only be done on coins with high volume. With this strategy, the trader will open a position and then close it during that trading session and do not hold it. Leaving the position overnight to minimise risks. Scalping is an interesting strategy for investors to use to trade, but it also has the potential to be high-risk like a large drop that quickly wipes out profits. In addition, investors can use averaging the exact range of prices (ATR), Volatility Index (VIX) to optimize profits effectively.

5. Range Trading Strategy – Trading in Price Zones

A trading zone is an area that appears on the chart when a coin’s price is trading somewhere between two high and low prices for a given period of time. Traders will determine the confidence level of an effective trading zone based on it. trading volume. Price zone trading strategies include 2 types:

Support/resistance area trading: Traders buy coins when price hits support or sell when near resistance area

Breakout/break down trading: Traders can enter orders in the direction of the breakout up or down. Breakout occurs when the price breaks out of the trading area in the up direction and the breakdown is vice versa.Know more here how to work the  Crypto tax Calculator

6. Position Trading

Position trading is a special strategy for traders who pursue medium and long-term trading strategies. Unlike day trading, traders who pursue position trading style will usually not pay much attention to the short-term ups and downs of the coin. on the chart. This strategy is usually suitable for individuals and investors with a large amount of capital to facilitate buying and long-term holding of the coin.

7. Trading based on RSI Indicator

Relying on the relative strength index (RSI) is one of the popular strategies among novice traders. The RSI is a simple momentum indicator that measures the speed and variability of recent price movements. Most traders will usually set the RSI between 30-70. If the RSI drops below 30 it means the coin is oversold and vice versa. The RSI is not always as accurate as you think. To minimise risks you should set a stop loss order just below your entry price this allows you to exit the position when the RSI is continuously falling.

8. Avoid Pump-Dump Groups

When trading on the major exchanges, you are likely to come across something called Dump-Pump. Dump-pump which is known to provide viewers with their extraordinary profits based on false claims. Usually the pumps will try to organise a large number of orders on a specific amount of assets to increase the price of that coin. But when a certain point is reached, there will be a sell-off of the coin. Traders will lose a lot of money in the long run and Dump-Pump is also an illegal form of manipulation of the cryptocurrency market for big whales.

9. Buy and Sell based on Arbitrage

It is a strategy of buying and selling assets on 2 or more markets to profit through arbitrage. Take advantage of different prices for the same coin on two different crypto exchanges or you want to make a buy-sell contract for difference to make a profit both when the market goes up or down… Currently, this method is showing flexibility and has the opportunity to payback, earn a lot of profit in a short time that traders should apply.

Above are some effective crypto trading strategies that we have revealed. Thank you for taking the time to read and wish you much success when trading.

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