Crypto trading, in its simplest sense, is the buying and selling of digital currencies with the intent to make a profit from such a sale. Unlike the buying and selling of common goods, crypto trading has a twist; it involves predicting the changing value of the coin to target the rise and fall of cash prices for one’s benefit or profit.
Recently, crypto trading has become the in-thing, but it is a volatile trade and can lead to huge losses if adequate care is not taken. Fortunately, this article is an all-you-need-to-know diet on the best crypto trading strategies for beginners’ traders.
How Do Crypto Trading Strategies Work?
One of the existing criticisms of cryptocurrencies is that they can be pretty volatile for all their financial buoyancy. However, with core strategies like arbitrage, scalping, HODL, and Day Trading, you can rest assured in your success rate as a crypto trader.
Also read : 3 Best Crypto Trading Tools in 2024
Scalping
Crypto scalping is one of the quickest ways for a crypto trader to make money. It is the process of making small but consistent profits from the price movement of cryptocurrencies at intervals. Over time, the small gains add up to a substantial sum. Scalping requires quick thinking and consistency, as a trade may last only for one minute to thirty minutes. It takes consistency and perseverance to hit big.
Arbitrage
Arbitrage crypto strategy involves buying cryptocurrency in one market and selling it in a different market at a higher price. This technique plays on crypto’s feature as an unregulated market to buy and sell on as many platforms as possible. The differences in the buying and selling prices are often called a spread. Unlike scalping, it is possible to make a chunk of spread through arbitrage. However, a seller must consider the trading fee on each market as sometimes the price may overshadow the spread.
HODL
HODL is a popular term for ‘Hold,’ where a crypto trader continues to hold a coin despite the price increase, decrease, or general market volatility. The rationale is for a trader to keep o to the currency as a retailer until they get the right window for trade, possibly when the coin has gained enough insight. However, with the HODL strategy, a trader must have a goal in mind, howbeit a long-term plan, after which the coin can be sold off.
Also read : Crypto Trading VS Crypto Investing
Day Trading
Day trading is a crypto trading strategy involving investing and exiting a market within the same day. Like scalping, it is used to make bit-sized profits before the close of the markets daily. This trade is quite suitable for crypto trading as a crypto jump can be as high as 10%, which is very rare in traditional stock markets, equating to significant profits.
Conclusion
There is indeed a great deal of profit from crypto trading. However, contrary to popular opinion, these strategies are not a get-rich-quick scheme; they require consistency and tenacity. These strategies are not limited to the four below. Be sure to do adequate research before delving into the crypto trading field
