Did you know that there are over 5,000 different cryptocurrencies?
In the past decade, crypto has become one of the most popular assets to own. And now, people are starting to trade crypto as part of their passive income.
Trading cryptocurrency may seem hard, but there are a few easy ways to do it. Anyone can trade crypto and be successful at it if they learn the right methods.
If you’re interested in learning the 3 best crypto trading strategies, keep reading!
1. Crypto Day Trading
When you invest in crypto, you can either hold onto your investment for short or long term. Day trading involves making a purchase and selling it the same day.
Though it has a higher risk factor, day trading can earn you great profit. But to be successful at day trading, there are a few resources you’ll need:
- Trading simulator
- Investing platform
- Automated trading strategy
With a trading simulator, you’re able to find stocks and study how they may react to market changes. This is a useful resource for beginners and pros alike.
Once you’ve decided on which cryptocurrencies you’d like to invest in, it’s time to find an investing platform. When choosing your investing platform, you must consider transaction fees, supported cryptos, deposit methods, and more.
You don’t want to spend all of your profit on transaction fees. And make sure you have an idea of when you want your profit to deposit into your account. Some platforms take longer than others.
And though it’s not necessary, having an automated trading strategy helps lessen your responsibilities so that you can focus on your profit. Backtesting is a strategy many traders use to test their methods.
Companies like Tradestation make backtesting easy to accomplish. Tradestation backtesting is another useful tool to use along with automated trading.
While day trading can be completed within a few hours, scalping involves no less than 10 trades a day. This strategy involves making small profits that add up over time.
But this method involves a strict exit strategy. The entire purpose of scalping is to make a quick trade, and you can’t do that if you hold on for too long.
Scalping is considered an advanced crypto trading strategy, but once you get the hang of it, it’s easy to earn profit.
3. HODL (Buy and Hold)
This is by far the easiest method of trading because it requires the least amount of effort. HODL is a technique where people buy crypto and hold their investments for a long period of time.
This is only a profitable crypto trading strategy if you do research beforehand. No matter how long you hold on, certain cryptocurrencies may never bring you as much profit as you were hoping for.
The Best Crypto Trading Strategies
It’s important to keep a diverse crypto portfolio to maximize your chance for profit. But implementing the best crypto trading strategies is even more important.
Now that you know three different strategies, it’s time for you to start investing.
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