In the world of Bitcoin and other cryptocurrencies, trading strategies play an integral role in the process. Even though there are numerous ways to make or lose money in quick succession, some of the common strategies tend to yield the most positive results in the long run. The following strategies are ranked in terms of popularity, with the latter one appearing to be the most popular strategy to follow.
#4 Position Trading
There is some confusion as to whether or not one can effectively consider position trading as an actual strategy in the first place. Since it seemingly mainly relies on buying and holding until an opportunity presents itself, it is often considered to be the most “boring” option of this entire list. That doesn’t mean position traders cannot make good money by executing their strategy to perfection.
This type of trading can lend itself to both novice and experienced traders alike. It remains to be seen how all of this will play out when dipping one’s toes in position trading, as it will require a lot of patience, knowledge, and luck alike. Especially when it comes to Bitcoin, position trading can be a wait-and-see game more often than not, but it still remains a more than valid option regardless.
#3 Swing Trading
Trends are ever present in the world of cryptocurrencies. Not all trends will make sense, but there is a gap in between different price trends where massive volatility can occur. Those traders seeking out those exact spells of changing momentum can make a lot of money quickly, although swing trades can still take over a full day to be executed.
For those seeking to make quick money with Bitcoin or other cryptocurrencies, scalping can be a more than valid approach first and foremost. It is very commonly used among active traders, which revolves around exploiting every little opportunity or price gap. As the spread between bid and sell orders tends to spread on a regular basis, it is evident this method can help one make a lot of money.
Moreover, it is important to note that scalping does not require large orders whatsoever. Instead, it can be done by taking advantage of very small moves which occur on a frequent basis. Scalping requires a lot of attention and patience to be even remotely successful, a 0% trading fee on an exchange is definitely a must if you decide to go this route.
#1 Day Trading
One of the more accessible forms of exploiting cryptocurrency market momentum comes in the form of day trading. It is something most traditional financial markets do not allow, even though things are a bit different where Bitcoin and altcoins are concerned. Buying and selling within the same day is the main name of the game, and it can occur several times per day as well.
Day trading can also be extremely dangerous, if emotions come into play it is an easy way to lose one’s bag. If you are going to day trade get ready for one hell of a ride.
What is your favorite trading strategy? Let us know in the comment section!