Best Cryptocurrency Trading Strategies | IFCM (2024)

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The best trading strategies often come from years of experience investing in the cryptocurrency market, and in this article, we will introduce you to the most proven crypto trading strategies.

Before we get started, here are a few obvious but important steps that should not be skipped.

If and when you decide to trade crypto, start by having strategies, for God's sake. Manage risk, set the limits on how much you invest in particular cryptocurrency and don’t forget to usestop-loss orders. Diversify crypto portfolio; don’t put all your eggs in one basket.

Consider long term investment (crypto market is not going to disappear, it’s here). Leaving your money in the crypto market for months at a time could offer you the best rewards. That’s enough for the basics. Now let’s check out thecrypto trading strategies.

KEY TAKEAWAYS

• Having a well-designed and proven strategy when trading cryptocurrencies is a very important thing to make a profit in the crypto market.
• Cryptocurrency day trading strategy involves entering and exiting a position in the market within the same day.
• If you are more interested in stable and regular daily profits from cryptocurrency trading, then automated trading may suit you.

Crypto Trading Strategies

If you are here because you are thinking that investing in cryptocurrency is a shortcut to wealth, don’t, it’s much harder than you think.

Having a well-designed and proven strategy when trading cryptocurrencies is a very important thing to make a profit in the cryptocurrency market.

Depending on your risk tolerance and ultimate trading goals, you can choose the strategy that best suits your trading ventures and goals. Profiting with crypto trading is about making correct predictions about price fluctuations in themarket. For this, a strict set of rules and principles can be a good help.

Crypto Day Trading

Cryptocurrency day trading strategy involves entering and exiting a position in the market within the same day. It is also referred to as "intraday trading",reflecting the fact that trades are typically opened and closed within the same day.

Day trading in the cryptocurrency market is especially profitable as cryptocurrencies are quite volatile. Day trading strategy, of course, goes beyond mere guesswork.

You must have the right cryptocurrency day trading strategy and understanding of fundamental and technical analysis. Most intraday traders rely on technical analysis to build the right trading ideas.

They use price action, volumes, chart patterns, and other indicators to determine entry and exit opportunities for investment decisions. They also keep an eye on fundamental news and other developer-related updates that could affectdigital asset prices, especially in the short term.

Here are strategies that may help you increase your profits from day trading in the market:

1. Scalping Crypto Strategy

Scalping is a cryptocurrency intraday trading strategy in which traders seek to capitalize on increased trading volume. They can exit trades a few minutes after entering, while making a small profit.

Ideally, the scalper is aimed at making small profits. They scalp the market looking for small opportunities. Scalpers need huge capital to make a profit because the profit from this strategy is usually very small.

2. Arbitrage Crypto Strategy

Arbitrage is one of the most popular strategies on the market. It involves buying a coin on one platform and selling it on another using the difference in price between the two platforms. Like scalping, arbitrage tends to generate smallprofits. Thus, the larger your order size, the more profit you can make.

Crypto Range Trading

In many cases, the cryptocurrency will trade in a certain range for a long time. In some cases, big players will systematically manipulate the price of a coin up and down to make range profits. If you notice these patterns, you can alsotake advantage of them. Thus, you should pay attention to the overbought and oversold zones.

To sum up

Overbought means that buyers have satisfied their needs and the stock is likely to sell; oversold means the opposite. Charting indicators included in any reputable charting program can help you find these zones. Common indicators usedfor this purpose include the Stochastic Oscillator and the Relative Strength Index.

Cryptocurrency day trading can be quite lucrative, especially for short-term traders. If you have the right cryptocurrency day trading strategy, you should have no problem. Remember about technical and fundamental analysis, with anemphasis on technical analysis, since historical price analysis can tell a lot about when to enter and exit a position.

Smart Trading

This one is quite popular too, it’s a mix of different smart orders such as Stop-Limit and Trailing Stop-Loss. This strategy offers a good risk and return control, helps to better plan positions you’re entering and exiting. With thisstrategy, you only need to place 2 orders. Stop loss is used to limit losses if something goes wrong.

On the other hand, take profit is used to make sure that you make a profit whenever the market reaches the given conditions. You can also combine multiple take profits with stop losses which are used to take your strategy to the nextlevel.

When you use 2 or more take profits, you can spread the risk of trading, which will maximize your chances of making good profits. Although it is very similar to the previous method, it just simplifies everything and makes it less risky.

You will need to test them out and see which one of these strategies are working for you.

Automated Trading

If you are more interested in stable and regular daily profits from cryptocurrency trading, then automated trading may suit you. There are many cryptocurrency trading robots available on the market.

Cryptocurrency trading robots are able to analyze the market 24/7 and look for the best trading opportunities.

It is also possible to enable smart trading orders, which will further increase its efficiency. This one will help you easily invest in the cryptocurrency market. This way, you can go on with your day and let the robot make profits foryou.

HODL

HODL is used daily by many crypto traders. With this strategy, both the risks and the possibilities are endless. With this strategy, you can end up losing everything or making huge profits. One of the best things about HOLD is that allyou need to do is simply buy digital currencies without setting the take profit or stop-loss.

This trading strategy can either make or break you, because of which, it is very important to really think about the risks before deciding to use it. Let’s say that you buy BTC,and the price of it increases 15 percent on the second or third day after buying.

You will be making good profits even in this little time. But if the price falls drastically then, you’ll be losing. But, the majority of the crypto traders using the HODL strategy are investing when the price is very low and take theirprofits once the price increases drastically.

Because it is so risky, it is very important for traders to have a special mindset while trading. Basically, you are required to be able to trust your instincts and decisions, otherwise, it will be hard to make good profits with thisstrategy.

Note: invest the amount of money that you can afford to lose when using the HODL strategy.

With this strategy you will be able to avoid the volatility of the market and survive the short-term price movements in crypto trading.

While all these strategies are really good, they all have their advantages and disadvantages. For best results, it would be better to use all of these strategies once you have gained enough experience.

Diversification is a very important step towards success in any market, and crypto trading is no exception. You can allocate funds to each strategy according to your personal preferences.