Cryptocurrency trading strategy: The Best 5 Crypto Trading Strategies IG International

Cryptocurrency trading strategy

Cryptocurrency trading strategy

This content is for informational purposes only and should not be construed as investment advice. Nothing mentioned in this article constitutes any type of solicitation, recommendation, offer or endorsement to buy and sell any crypto asset. Trading in any financial market involves risk and can result in loss of funds.

Cryptocurrency trading strategy

A day trader will make multiple trades within a day, buying low and selling high within little gains that compound to large sums by the end of the day. Typically, sometimes it gets hard to perform this manually. For day trading crypto and to succeed in this strategy, you will need to consider automating your trades using crypto trading apps or crypto trading bots like Coinrule.

Former TradFi Executives Launch Crypto High-Frequency Trading Firm For Institutions

Firstly, we need to make the distinction between investing and trading – the biggest difference being the time horizon. With trading in any asset, the time horizon tends to be short-term and often more speculative in nature. It is not uncommon for traders to execute dozens of trades a day to take advantage of intra-day price fluctuations. Most day traders spend their life making profit from cryptocurrency trades.

Don’t follow the hot tips crowd; invest only in coins that you actually believe in — even for just the day. The hot tips crowd is often selfishly motivated and is not giving tips to make you money. The term “day trading” stems from the traditional markets, where trading is open only during specific hours of the day. So, in those markets, day traders never stay in positions overnight, when trading is halted.

They look for signs of an impending reversal in price direction using TA indicators to determine when to buy or sell. One of the most popular strategies among traders is statistical arbitrage. It seems very complex, but after several deals, you’ll see that it’s simple enough.

This strategy means trading on the exchange within one trading session during the day. Positions opened on this day are not transferred overnight to the next session. You can also use this strategy to find smaller changes in a trend – for instance, spotting a pullback in a downward trend. If we look at the circled area more closely on the 30-minute chart, we can see there was another divergence that showed momentum was changing back to bullish. Recommended for professionals.Binance supports the widest selection of deposit/withdrawal options of any exchange currently and the widest geographical coverage as well. You can also download a mobile application on either iOS or Android and trade on the go.

Benefits of cryptocurrency trading

Let’s say that you buy BTC, and the price of it increases 15 percent on the second or third day after buying. 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 for you. 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 strategy The strategy has many more big gains than big losses – it’s the opposite of a negatively skewed distribution. Bitcoin is still a relatively new asset class and we can safely say it has become more and more “mainstream” after the first boom and bust cycle from 2016 to 2018. Even famous traders and investors like Paul Tudor Jones and Ray Dalio have invested in Bitcoin.

The Best Bitcoin Trading Strategy – 5 Easy Steps to Profit

Trading based on the Relative Strength Index is one of the most common beginner strategies and can be a powerful method, under the right conditions. The RSI is a simple momentum indicator that measuresthe speed and change of recent price movements to help identify overbought and oversold markets. The best method to learn nowadays is online, and I have specialized in recording online trading courses, which brings the traders what they need to start trading professionally. Pip, short for percentage in point, is a unit of measure used in the trading of currencies, cryptocurrencies, and other financial instruments. In the context of Bitcoin trading, a pip is a unit of measurement that represents the smallest change in value that a Bitcoin can experience. High volatility microcoins can gain price multiples in 1 day, providing exponential returns to lucky investors.

Day trading might be the most well-known active trading strategy. It’s a common misconception to think that all active traders are by definition day traders, but that isn’t true. This article will help you with the basics of how you should approach speculating on the crypto markets. With a solid trading strategy, you’re more likely to achieve your trading and investment goals. It is not an easy undertaking to develop a crypto trading strategy suitable for both your financial goals and personality type. After going over some of the most popular crypto trading techniques, we hope you will be able to determine which one will work best for you.

It also enables you to examine the levels of support and resistance through analysing previous price movements. With my team, we do our best to create high-quality education, review platforms, and brokers and help everyone to stay on the profitable side. I hope it is clear what is Pip in Cryptocurrency trading and you already know how to calculate Bitcoin pips, guys, thank you very much for reading. And for the Bitcoin pips, if there are 3 digits behind the crypto price only then we will have a point. This is one of the questions I get from the students very often.

Refers to a situation where you are unable to exit a position. Typically happens when you can’t find a buyer for your asset. Scalping is a part of day trading but typically involves concise trading periods. Luckily, with cryptocurrency, most of the networks are public such as Bitcoin and Ethereum making access to these on-chain factors easy. To track both Bitcoin and Ethereum on-chain metrics, you can use This website has loads of crypto-related data and is extremely simple to use and navigate.

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Before day trading, you should check for high volatility of cryptocurrency being traded. This provides more opportunities to make deals, allowing you to gain more profit. RSI stands for “Relative Strength Index,” which is a chart indicator that measures momentum by calculating the average number of gains and losses over a 14-day period. The indicator line oscillates between 0 and 100 and can be used to highlight when an asset is “overbought” or “oversold.” A channel between 30 and 70 is most commonly used to show this. When the indicator line breaks out of the channel above 70, the asset is considered “overbought” and the price will likely come back down. Conversely, when the asset breaks through the bottom of the channel below 30, the asset is considered “oversold,” which means the price will likely rise.

Exchange BTC

If you’re not comfortable with the idea of losing money, then cryptocurrency trading may not be for you. Always remember that you could end up losing everything you invest, so only put in what you’re willing to lose. Aim to create a portfolio over time rather than relying entirely on quick profits from each individual trade. Cryptocurrency is a volatile market, and prices can swing up and down quite a bit. This means that if you invest more money than you can afford to lose, you could end up losing everything. In addition, having a well-defined trading plan will help you to cope with the ups and downs of the crypto market much better.

For example, taking 0.10% from five different trades with a collective investment amount of $100,000 is a fair profit. Scalpers make several trades simultaneously, which means that these small gains result in large profits at the end of the day. We have also seen standardized futures markets pop up for Bitcoin and other more liquid cryptocurrencies, such as Ethereum. It’s very easy because a trader only needs a little knowledge for it to be rewarding. Almost all cryptocurrencies experience enormous growth over the long-term.

However, the denominations in the marketplace are still valued compared to fiat currencies similar to the stock market. The short moving average has values from 10 to 50 days with 10-day intervals. Sell at the close if the close breaks below the 20-day simple moving average. Buy at the close if the close breaks above the 20-day simple moving average. Maybe one day our fiat money system will go under and be completely replaced by cryptocurrencies. Pay attention to cryptocurrency news stories to stay ahead of the market.

Range trading, like the majority of other trading strategies, can work beyond the crypto space and is flexible for other markets. Crypto day traders favor range trading for its clearly defined entry and exit points, which can minimize losses. By making small profits over a short period of time, the range trader minimizes losses incurred by unfavorable news cycles or market conditions. HODL-ing is one of the most practiced crypto trading strategies used by traders. It involves holding certain asset for a long period of time, regardless of the fluctuation in price, to rip huge gains. One of the best aspects of HODL is that you only need to buy the coins without setting any stop-loss order.