Despite that cryptocurrency is new and full of promising opportunities, it has its risks and pitfalls as well for those who are rushing to invest in it. Since the pandemic hit the world in 2019, thousands of new cryptocurrencies have emerged on exchanges and trading platforms, each crypto has its own volatility and feature.
However, if you like to invest in cryptos, you shall consider applying strategies and tactics like the strategy of mathematical calculations in blackjack that is used by casino players. Moreover, to learn recent strategies, join platforms with the help of coupons like celsius promo code to help you save and get updated with news.
There are many strategies to use when trading with cryptocurrencies, but what are the best strategies to use?
Best strategies to use when trading in cryptocurrencies
Scalping
This strategy refers to trading in high volumes in order to gain profits from the small changes of a certain currency. This strategy requires a lot of concentration from the trader, because one big loss may eliminate all the previous gains that you have made during the day. To master this technique, you have to analyze the crypto assets, the previous trends, and volumes, then determine an entry and exit point within a trading day.
Day trading
Day trading It’s the process of buying and selling cryptos within a single trading day, the purpose of this process is to make small profits amid the small changes of a certain cryptocurrency. This strategy requires the trader to study technical indicators to know the points in which he shall buy or sell a certain cryptocurrency, also it requires the trader to purchase and sell as much as he can, so he can achieve his daily profits.
Range trading
It’s the difference between the high and low prices of a certain cryptocurrency during a specified trading period. Traders rely on experienced analysts, who study the market and provide support and resistance levels, those levels are provided daily and help the traders to know when to buy and when to sell. The Resistance level is a point above the current price, and it’s supposed that the price won’t go higher than this level, while support is a level below which the crypto price is not supposed to fall under.
High-Frequency Trading
This strategy requires strong knowledge of mathematics and computer science; it’s limited to those experienced traders who know how to use it. It involves computer programs that are specially designed to place multiple orders in milliseconds. The key factor to succeed in this strategy is the program’s ability to process huge volumes of information.
Dollar-Cost Averaging
If you are searching for the best period of time to enter and exit the crypto market, you have to stop and change your strategy, because you are looking for something that does not exist, but still, you can use the Dollar-Cost Averaging strategy, which aims to invest a fixed amount of money in a regular interval for a long period of time. It’s believed that this strategy is most effective when the markets are on a downward trend, while in a rising mode or when the trend is bullish, it’s recommended to avoid this strategy.
Build a balanced portfolio
It’s essential to build a balanced portfolio that includes a variety of cryptocurrencies. If you buy ETH in Australia along with other cryptocurrencies such as Bitcoin, Ethereum, and litecoin, this portfolio will help you overcome the volatility over time. It will also help traders to maintain investments in different cryptos, which will increase their gains in the long term.
Don’t make trading decisions based on hype
Many Beginners fall for the same mistake, which is to rely on social media for news on cryptocurrencies. Since digital currency is an important topic, false information may spread fast, hence may affect your decision if you are using social media as a source for news. Remember social media is full of fake pages and resources, so when you want to make an investment decision, this decision shall never be based on the hype created by someone on social media.
Do some research
Trading cryptos is similar to trading commodities and securities, thus it’s advisable to do some primary research on the value of the asset you want to buy. This research involves following the news of the asset you want to buy and knowing all the aspects that may affect its price.
Bet on Bitcoin Volatility
Bitcoin is one of the most volatile cryptos nowadays. You can bet on the volatility of the bitcoin by trading in the bitcoin futures, this can be made by buying a call and put option at the same time. When the prices fall or rise vigorously, you must sell the call and the put option at the same time.
Arbitrage
This strategy is about buying cryptos in one market and selling it in another market. To be able to do so, you must have accounts in different exchanges. Those exchanges must have huge differences between the prices of the cryptos that you are trading with.
