According to recent news reports, more than 100 million Indians own cryptocurrencies. In this festive season, that number is likely to be even higher.
However, similar to trading stocks and commodities, cryptocurrency trading is fraught with risks and pitfalls. To reap the long-term benefits of trading cryptocurrencies, market enthusiasts need to develop strategies that make trading fun and safe. Let's start by looking at strategies that can help you achieve profitable profits.
DAY TRADING
This trading strategy involves opening a position and exiting on the same day. The trader's goal in adopting this type of trading is to profit from the intraday price movements of his chosen cryptocurrency. To trade successfully, investors often rely on technical indicators to understand the entry and exit points for a particular cryptocurrency.
LONG-DISTANCE/RANGE TRADING
Market participants also rely on experienced analysts who provide daily support and resistance levels. The " resistance level" is the point at which the price may rise, so the resistance level is the price above the current price. On the contrary, "support" is the level at which the price of a cryptocurrency should not fall below it, so the support level is always lower than the current price.
SCALPING STRATEGI
perdagangan ini melibatkan penggunaan volume yang meningkat untuk mencatat keuntungan. Meskipun ada risiko, trader cerdas memperhatikan persyaratan margin dan aturan penting lainnya untuk menghindari pengalaman trading yang buruk. Scalper menganalisis aset crypto, tren masa lalu, volume, dan memilih titik masuk dan keluar di siang hari.
HIGH-FREQUENCY TRADING (HFT)
High-frequency trading is an algorithmic trading strategy used by quantitative traders. It involves developing algorithms and trading bots that help get in and out of crypto assets quickly. Developing such a bot requires an understanding of complex market concepts as well as a solid knowledge of mathematics and computer science. Therefore, it is more suitable for advanced traders than beginners.
DOLLAR-COST AVERAGING
When it comes to finding the perfect entry and exit points in the crypto market, it's best to assume that market timing is next to impossible. A very smart way to invest in cryptocurrencies is Dollar Cost Averaging (DCA). DCA refers to investing a fixed amount at regular intervals. This strategy helps investors avoid the tedious market timing and long-term work of building wealth.
However, even with a DCA style, exit strategies can be difficult. Market trends need to be studied to understand market cycles. Reading technical charts can also help you time your exits. Cryptocurrency investors should monitor oversold and overbought areas before taking the call. You can refer to WazirX real-time charts to better understand the technical charts of different currencies.
BUILD A BALANCED PORTFOLIO
Crypto trading is still in its developmental stages. While several countries welcome cryptocurrency transactions, some remain sceptical. Central banks around the world are working on better ways to regulate digital currencies, so trading cryptocurrencies is often a risky proposition. However, some strategies can help investors stay away from extreme volatility.
Building a balanced portfolio that includes different cryptocurrencies such as Bitcoin, Dogecoin, and Ethereum can go a long way in combating volatility.
In addition, investors can also make regular investments in fixed amounts in different cryptocurrencies. This systematically increases the willingness to take a risk and helps your portfolio achieve strong long-term returns.
MAIN RESEARCH
One of the most important trading strategies is preliminary research. You don't have to be a trading expert to primarily research the value of the asset you want to buy. This includes keeping you up to date with all the news about the crypto industry. WazirX helps you do this quickly by compiling all the messages you need to read before your day starts.
Additionally, you need to assess your financial situation and set investment goals before betting on volatile asset classes like cryptocurrencies. You can research Bitcoin, Ethereum, TRON, Ripple, Litecoin, and more.
ARBITRAGE
Arbitrage refers to the strategy in which traders buy cryptocurrencies in one market and sell them in another. The difference between the bid price and the asking price is called the "spread". Due to the difference in liquidity and trading volume, traders can find a way to lock in profits. To take advantage of this opportunity, you will need to open an account on an exchange where the prices of the cryptocurrencies you trade vary widely.
BETTING ON BITCOIN VOLATILITY
It's no news that cryptocurrencies are one of the most volatile asset classes currently being traded. Recently, the price of Bitcoin has risen by nearly 30% in a single day. You can bet on volatility by trading Bitcoin futures. The way to do this is to buy calls and puts at the same time. The strike price and expiration date must also be similar. To get out when the price of a cryptocurrency falls sharply or rises sharply, you need to sell both calls and puts.
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