How To Choose Your Cryptocurrency Strategy - #CryptoTrading

Published in Crypto trading 101 · Labeled as Trading 101 ·

Intro 101 post summarising the three basic cryptocurrency strategies, and how to choose yours if you are just starting out with cryptocurrencies.

Trading digital currencies is becoming an increasingly popular way of generating additional income.

This is primarily due to large potential returns that can be achieved if you know what you are doing, as well as the low barrier to entry to begin trading cryptocurrencies.

The high volatility of digital currencies when compared to traditional assets is what makes the unusually high returns possible. However, it can also result in large losses.

That is why it is important to always have a trading strategy in place.

In this guide, I will walk you through some of the basic crypto strategies that you can use even as a novice traders.

Arbitrage

This strategy is for you, if you prefer short-term trading.

One of the popular short-term trading strategies is arbitrage trading.

The strategy is simple and takes advantage of the price discrepancies that typically exist between cryptocurrency exchanges.

For example, a trader is able to buy bitcoin on Coinbase, send it to Binance and sell it for a higher price. This small variation in the price is what traders are able to take advantage of and is the key idea behind arbitrage trading.

To illustrate further, consider that Amy buys one bitcoin on Coinbase which is currently trading at $10,000. The price of one bitcoin is currently $10,100 on Binance. In order to take advantage of this, Amy sends her bitcoin from Coinbase to Binance and sells it for the higher price. The risk Amy takes is that the bitcoin price on Binance might change before she is able to sell.

There are techniques to minimize this risk, such as leaving money on both exchanges to eliminate the need of the transfer. You can also look for more stable arbitrage opportunities between mainstream exchanges and smaller local platforms such as those based in Australia, as long as they are open to international customers.

Swing Trading

This strategy is for you, if you prefer long-term trading.

Swing trading attempts to take advantage of the volatility that is rampant in the crypto space.

The idea behind swing trading is to capture the price movement of a cryptocurrency in a particular direction.

With swing trading, you are really trying to get into a position at the exact point a reversal in price occurs. This method of trading is usually most effective using automatic tools such as crypto bots and crypto signals (e.g. Binance signals).

The key for being a successful swing trader is to use these tools to help you identify when the price will reverse and will move up or down for an extended period of time.

Fundamental Analysis

This strategy is for you, if you prefer investment rather than trading.

Whilst not exactly a trading strategy, fundamental analysis must be used by any serious trader attempting to extract a profit from the crypto market. The legacy market counterpart of crypto fundamental analysis would be stock picking.

The key to this method of investing is to find cryptocurrencies that are undervalued and buying them with the expectation of a price increase in order to make a profit.

This concept has been borrowed from stock trading which uses metrics such as Price to Earnings Ratio and Earnings Per Share Ratio to help value a stock. However, for the crypto markets, these metrics differ.

The most important cryptocurrency value metrics are network activity statistics, transaction counts, active wallet addresses and competence of the development team behind the cryptocurrency and the size of the market it is disrupting.

Conclusion

To conclude, these have been some of the top strategies on how to approach cryptocurrency investing or trading. These three are being used right now to generate attractive returns by traders and investors in the crypto space.

It is critical to find a strategy and style that fits your goals as this will be important in determining how successful you are trading crypto.

Category: Crypto trading 101 · Label: Trading 101 · Author: (contact author)

 

Last added to Crypto Airdrops, Bounties & Opportunities
Airdropped Token or Opportunity Airdrop Date About the airdrop Link
$DOT Polka Drop NFT Raffle Live Polka City is a contract-based Polkadot, DeFİ and, NFT cryptocurrency investment platform. They are running a raffle now where purchasing a ticket gets you chance to win an NFT art gallery that pays weekly yield and other commission-generating prizes. Cost of the ticket is 1000 POLC, the main prize generates 1041 POLC per week (50% APY). join
Searching for PIZZA MAN on Phemex Until 22 May (The BTC Pizza Day) To promote their new asset management service, Phemex is opening a quest to search for the og guy who spent 10K BTC on a pizza (Laszlo Hanyecz). They are going to offer him, and 100 winners, to get 1 day of interests on 10k BTC in the Phemex Earn Crypto asset management program. Earn Crypto promises up to 10% APY. Yearly compound rate of 10% translates to about 0.03% daily rate, which could earn up to 3 BTC during that single day. make account on phemex and submit gleam form
Binance to launch NFT marketplace June 2021 If you have not already, join Binance with referral code atnet10perc for 10% lifetime kickback. join
CoinBurp NFT Airdrop Until 7 May Coinburp drops BURP NFT tokens for easy social media follows. It is a governance and utility token and non-custodial NFT app. You gain 10 $BURP tokens for joining our community. gleam form
$ARN token airdrop Until 9 May ARN tokens up for grabs for a set of 8 easy social media tasks. join
$XYM Token giveaway on Latoken Until 10 May Complete simple social media tasks and get a chance to win 1000 XYM tokens ($230) in the giveaway on LATOKEN. join
SafeCovid huge marketing bounty Live SafeCovid is running a vast campaign for all types of content marketing. Blogs, videos, social media - there are categories for all types of content. Submissions need to be posted in bitcointalk thread and recorded into Google Spreadsheets. bitcointalk
Trade tokenized shares of Coinbase on FTX Open The FTX crypto derivative exchange, quickly gaining recognition in the crypto community, added tokenized trading of Coinbase IPO. Loads of other tokenized legacy assets already available. FTX does not require KYC until your total lifetime withdrawals reach 1000 USD. (More about FTX here). see the markets
PYR social media campaign March 14, 2021 for 6 Months till August 14 2021. PYR runs a long social media campaign. You need to engage in various social media channels without mentioning the bounty. Rules in the sign up form. form
Opportunity: Zero fees on DeFi tokens on Bitstamp Until end of May 2021 You can now trade ZRX, MKR, KNC, DAI and GUSD at Bitstamp. Aa a bonus this DeFi-focused batch of cryptocurrencies comes with zero trading fees until the end of May. If you have an old Bitstamp account laying about, might be worth a shot to trade or arbitrage there for a few weeks now. Bitstamp
Blockchain Space Telegram Bounty Until June 2021 Blockchain Space runs a Telegram activity bounty. The most active users will be paid 50 USDT every 15 days. info