Eight (8) Cryptocurrency Trading Strategies Investors Need To Know

The cryptocurrency market is a volatile one, to say the least. That’s why you need to be ready to trade on any opportunity that presents itself. The goal of this article is to help you do just that by introducing some of the most important crypto trading strategies out there.

What is Crypto Trading

Other than crypto mining, which is a way to earn cryptocurrency by utilizing a cloud miner that performs mining cryptocurrency using cloud based solutions. Crypto trading is a method to earn crypto through mining and selling.

So, what is crypto trading? Crypto trading is the process of buying and selling cryptocurrencies. You can buy and sell different types of cryptocurrencies or you can trade one for another.

Cryptocurrencies are digital currencies that have no physical form but exist only online. They’re also decentralized, meaning there’s no central bank or government controlling them.

The benefits of crypto trading are: 

• no restrictions on who can use it
• fast transactions
• low fees; anonymity
• international availability

How to Trade Cryptocurrencies?

There are different ways to trade crypto-currencies. The most common way to trade them is through broker platforms which act as an intermediary between the buyers and sellers. However, this approach may not be suitable for a beginner because of the level of knowledge and experience needed to use those tools and platforms. 

Cryptocurrency exchanges do not require you to sign up or undergo any verification process before trading unlike stock investing where you have to create an account with a broker and provide your personal information before you can start trading. 

Trading crypto-currency on an exchange is much easier as it requires no extra registrations or information beyond what is required to send and receive Bitcoin payments.

Crypto Trading Strategies

Crypto trading strategies are a set of rules that you can follow to make a profit from trading cryptocurrencies. There are many different strategies, some more complex than others. 

• Crypto Day Trading

Let’s start with the basics. In cryptocurrency trading, it is possible to buy and sell cryptocurrencies on the same day. This is called ‘day trading’. The trader buys a cryptocurrency and sells it for a higher price. Then he/she would buy it back at the lower price and sell it for profit.

The trader makes money because of volatility in price movements within 24 hours or less (depending on how much time you spend looking at your charts). If you do this consistently over time, then there’s no doubt that you will make profits from crypto day trading.

• Scalping Crypto Strategy

Scalping is a short-term trading strategy that involves making small profits by buying and selling many times within a very short period of time. It’s called scalping because you’re trying to scalp (or grab) profits from each trade, instead of waiting for them over the long term.

Scalping is essentially a high-frequency trading strategy that involves multiple trades within a few minutes or even seconds. This type of trading requires very tight risk management skills, as well as good technical analysis skills so you can predict where markets are headed next–and get out before they move against you too much.

• Arbitrage Crypto Strategy

Arbitrage trading is one of the most popular strategies for cryptocurrency traders. In its simplest form, arbitrage trading is buying something at a lower price from one place, and then immediately selling it for a higher price somewhere else.

This strategy works best if you buy low and sell high – if you reverse these and buy high and sell low, you can actually lose money if the prices move against you.

• Dollar Cost Averaging

This strategy means that at fixed intervals (say once every week), you invest an equal amount of money in a particular coin. This way, you don’t put all your eggs in one basket, so to speak. If the price drops significantly after you purchase your coins, then at least some of them will be purchased at a lower price than they would have been had you purchased all of your coins at once and then had the value drop. 

Conversely, if the price rises after your purchase, then some of them will be purchased at a higher price than they would have been had you bought all of them at once and then had the value rise.

• Crypto Range Trading

This is a strategy that involves buying cryptocurrencies when they are at the lower end of their trading range, and selling them when they reach the upper end. The idea is to take advantage of price fluctuations within an established range, by buying low and selling high.

How To Trade It: You can do this by placing a buy order at around 50% below current prices, waiting for it to fill (or get canceled), then placing another order right above current prices with a limit order. Once your first buy order fills and you’ve acquired some coins at around 50% off their current value (or less), sell half those coins immediately using another limit order set just above where you got them cheap enough in step one–this will help ensure that you don’t lose money if there’s another dip before reaching full capacity.

• Automated Trading

Automated trading is a popular way to trade cryptocurrencies. It’s a method that many professional traders use, and it can be used for both long positions and short positions. There are many different types of automated trading strategies, but they all have the same basic premise: you enter an order with your broker, who then places it in the market on your behalf.

Here are some examples:

1. Scalping – This strategy involves placing small orders that get filled quickly so that you can make small profits before moving onto another position. Scalping requires fast execution speeds in order to be effective; however, this means there’s also more risk involved since any mistake could lead to losses instead of gains.
2. Market Making – A market maker buys low and sells high as often as possible (hopefully always at profit). They do this by placing orders directly into either side of an existing trade until one side wins out over time

• HODL

HODL is a strategy that is used by traders to buy and hold coins for long-term gains. It means holding on to your coins, and not selling them. You can use this strategy for short-term gains as well as long term.

HODL stands for Hold On For Dear Life, but it’s also an acronym for “Hold On For Dear Life.” The idea behind HODL is simple: buy something today with the intention of holding onto it until its value increases enough that you can sell at a profit. 

This strategy works best when you’re investing in something that has a high potential value increase over time (like Bitcoin or Ethereum), but there are other cryptocurrencies as well as pairs such as BTC/USDT out there which may be worth considering if they meet your criteria as well.

• High Frequency Trading

High frequency trading (HFT) is a strategy that provides a quick way to make money in the market. It’s easy enough to understand: HFT involves making rapid trades, usually within a matter of seconds or minutes, so that you have time to react quickly to fluctuations in the prices of certain assets. HFT takes advantage of the many advantages that cryptocurrency offers over more traditional forms of currency.

HFT is a type of algorithmic trading that uses computers to make thousands of trades per second. It’s done by analyzing market data and making rapid decisions based on that information. This can have a significant impact on not only your bottom line but also on market behavior in general.