7 Leading Crypto Trading Strategies You Need to Know!
Cryptocurrency has been flourishing non-stop these past years. Whether you’re a beginner or an experienced investor, you must understand the extremely volatile crypto market and search for all the tactics for maximizing your profits. One of the most important things to keep in mind is ‘strategic trading’ because losing your Bitcoins due to trading mistakes is no fun at all. Continue reading and you will eventually learn to avoid such mistakes and stay in the green!
1. DYOR — Do Your Own Research
The most important rule of any crypto trading is to always do your research first. Look into the features of cryptocurrency and consider the rise or fall of its price in the future. Moreover, read the founder’s goals and ask other traders about their thoughts to have a clear view.
2. Start Small and Diversify
You must’ve heard people saying, “Don’t put all your eggs in one basket.” The same expression applies to cryptocurrency too. Start by investing a little, and then spread your coin holdings gradually throughout your portfolio.
It is ideal to have a few other coins along with Bitcoin, like Litecoin, Dogecoin, and Ethereum. This will surely help you yield favorable results in the future.
3. Arbitrage
Arbitrage in the crypto world is just like bargain hunting. Traders look for differences in prices of the same coin on different platforms. Once they find a lower-priced coin on one platform and a higher-priced one on the other, they usually buy from the lower-priced platform. Then they sell on the latter, earning profit. It’s like earning more by less.
4. Don’t Trade Due to Hype
Relying totally on social media for updates about the crypto market is the biggest mistake new traders make. Since cryptocurrency is a hot topic, rumors, and false information tend to circulate very quickly on social media, so investment decisions should never be based on the hype created on online platforms.
5. Understand Coin Value
Usually, traders buy reputable cryptocurrencies like Bitcoin or Ethereum for the long term because of their high volatility. This is the reason why professional investors hold these coins for over a year to gain profits. The price of a coin is generally affected by others. For instance, if Bitcoin’s value increases, other altcoins will follow the same trend too.
6. Avoid Cashing Out Right Away
If you want to make something out of your investment, then don’t cash out the moment there is a major jump in the market price. With cryptocurrency’s high volatility levels, you can easily get quick profit by trading but there can be far more potential in the long term. Therefore, you should wait for a second or third jump because they are usually far more profitable than the initial jumps.
7. Understand the Trades Order
Understanding the structure of crypto trades is important too. Generally speaking, when there are more buyers than sellers, the price increases due to the demand for crypto. On the flip side, when more people sell, the price declines eventually. This can greatly help you decide the correct time to trade your coins.
Outlook
Summing it up, you should know these useful strategies before getting yourself involved in this crypto world. Now, we ask our readers to share their own experiences and thoughts with us. Have you found this article worth reading? Please let us know!
