5 Beginner Crypto Trading Strategies to Master

Crypto trading bots can streamline the process of looking at price movements, exchange fees, and opportunities to make short-term profits on trades. For decades, bot trading software has been a staple of brokerages trading on stock exchanges. Traders with an understanding of software programming and APIs should definitely consider using this to their advantage as a day trader. For prospective day traders, certain websites allow users to track and copy the most successful traders on the platform. Below are some of the most popular trading strategies in the crypto day trading game.

• Most of the trading strategies we will mention also work in financial markets like forex, stocks, ETFs, etc.
• HTX plans to expand business globally by venturing into new markets with promising prospects across various countries and regions while maintaining a balanced growth.
• It’s a framework you create to guide you in all your trading endeavors.
• Trading strategies are devised using technical analysis by day traders, but it is a time-consuming and risky strategy that is mainly suitable for advanced traders.
• The expected return is simply the mean of our excess returns, which is the difference between the assets return and a risk-free asset.
• You can invest in Bitcoin directly by using one of the major cryptocurrency exchanges, such as Coinbase or Binance.

The difference between those prices is slippage, and in the crypto markets, a few minutes can mean the difference between a big profit or a big loss. Although crypto is a new and exciting industry, it has its risks for those who are interested in investing in it. Quant traders utilize HFT, which is an algorithmic trading approach to benefit from bid-ask price discrepancy to sell/buy assets in microseconds using latency. However, short-term price differences are spotted by trading following momentum strategies to act on anticipated reactions to the volatile crypto market. Demo trading is a great way to learn cryptocurrency trading with zero risk.

Bot trading

Although the discrepancy will not usually be this large, the low barrier to entry for new exchanges brings new arbitrage opportunities more often than in traditional asset markets. Whilst in day trading and scalping, traders typically open and close positions multiple times within a day. Scalping (a trading strategy in which traders profit off small price changes) is a part of day trading but typically involves concise trading periods.

• Notably, a smart trading strategy offers two types of trading options, i.e. short and long.
• It will also not hurt to watch crypto trading videos to discover the tricks and strategies that advanced traders utilize.
• You can use the crossover strategy on shorter timeframes, but it is more effective on higher timeframes.
• Another way to gain investment exposure to Bitcoin is to buy shares in a company with significant Bitcoin exposure, such as a Bitcoin mining company.
• The same market condition that scares away buy-and-hold investors is the chaos that makes opportunities for day traders to make profit.

Our goal is to help you understand the different trading strategies you need for consistent results. The prices of cryptocurrencies can be volatile, which makes this type of investing likely a poor choice for conservative investors. If you are willing to assume greater risk as an investor, then investing in one or more cryptocurrencies may be right for you. However, those traders who want to step up to manual trading can choose Binance for low fees, a variety of order types and payment options. Whatsmore, Binance caters to experienced users with comprehensive charting options, with an abundance of advanced indicators and overlays.

Stoicism and Crypto Trading

The idea behind this strategy is that on a long enough time frame, the timing or entry price won’t matter much. All the investment strategies are suitable and profitable for you as they come with several pros and cons. For the best results, you should research and understand all the potential strategies and tactfully choose the most suitable one. If you rely on your preferences, allocate your funds using at least three of the above-listed strategies. Choosing the lowest risk strategy will be more favorable for you to adapt.

In fact, it may be worth considering a hybrid approach by combining multiple strategies. Trading strategies help you organize those techniques into a coherent framework that you can follow. This way, you can continually monitor and optimize your cryptocurrency strategy. HTX plans to expand business globally by venturing into new markets with promising prospects across various countries and regions while maintaining a balanced growth.

How to trade cryptocurrency: selling

Consider moving a portion of your trading profits out of the exchange wallet and into a non-custodial wallet. This could be an option if you don’t want to return all your gains to a trade and risk losing them. It’s also suitable for traders that want to store their crypto in the medium or long term. You can trade the crypto you own or enter into futures, options, or contracts for differences (CFDs) agreements. These financial derivatives allow a crypto trader to speculate on the price movements of a cryptocurrency without owning it.

• In terms of value and the best cryptocurrencies to invest in, it’s worth noting that a lot of crypto assets tend to fluctuate in value.
• Installing CoinGecko’s API with python can be done by typing “pip install pycoingecko” into your computer’s terminal or command line.
• This way, you can track the individual performance of each strategy while exercising proper risk management.

After identity verification, deposit fiat to your account or connect your bank account (if that’s an option) to purchase the cryptocurrency you want to trade. Alternatively, you can transfer crypto to the exchange if you already own some. Think of long-term holding as planting a seed and waiting for it to grow into a strong tree. It requires patience and the ability to withstand short-term volatility while focusing on the long-term vision. If you’re interested in decentralised finance (DeFi), DefiLlama is a specialised tool that offers comprehensive data and analytics on multiple blockchain networks and DeFi protocols.

Current Price

On the other hand, X is the Roman numeral for 10, which pays tributes to HTX’s 10th anniversary. It is a new era for the platform with synergy between HTX, TRON, and Poloniex. As shown above, this 20-day SMA crossover strategy ultimately yielded negative returns over the course of a year.

Market structure and the relative strength index can help you spot reversals early, providing you with timely entries and exits, and helping you make the most of each move in the market. Dollar-cost average strategies can be used for a longer period, building a long-term portfolio for the next bull market. To sum up, moving averages can help you understand the overall trend direction or give you extra confidence when the price corrects into a support level. When using multiple moving averages, crosses of these moving averages can serve as warning signals or as confirmation of a newly-formed trend. Another popular – and easy to master – strategy revolves around understanding the market direction, without using any indicators. With a solid understanding of the market structure, traders can get the feel of the chart in the blink of an eye.

Join our Work Crypto community on Telegram

Crypto asset investing is highly volatile and unregulated in some EU countries. One that is defined not only by the technical aspects but also the business behind trading; a proper structured trade that is in line with the overall trading plan that has been proven to work. In contrast to what most new traders think, trading is not just about strategies, but the system – itself also contributes greatly to becoming a successful trader. Traders should also take trading fees into account when attempting arbitrage. The fees to make a trade on an exchange may wipe out the gains from the trading spread. Their goal is to help investors achieve financial freedom through cryptocurrencies and successfully guide them through the current markets.

• The proposed spot bitcoin ETF would be Coinbase-custodied and would trade on Cboe BZX Exchange, according to an SEC filing.
• Dollar-cost average strategies can be used for a longer period, building a long-term portfolio for the next bull market.
• This means that you can implement your day trading Strategy right away, or you can develop that strategy over time.

HTX selects premium new assets worldwide by focusing on quality and timeliness. We wishes to empower the community to choose which assets they want to list. After the rebranding, HTX’s listing strategy will start a new phase by expanding its ecosystem with new assets listings. We will select premium and popular assets from around the world by introducing all-star projects that come with volume, popularity, and new trends. Additionally, HTX will deepen collaborations with mainstream ecosystems, including but not limited to public chain, Layer 2, and memecoins. At the same time, we will continue to enhance core products such as PrimeVote and PrimePool and will do whatever it takes to empower the community to decide which assets to list.

What is leverage trading?

It’s a framework you create to guide you in all your trading endeavors. Crypto-exposed stocks gapped up in Tuesday morning trading as bitcoin (BTC-USD) rebounded from a correction to the lowest level since mid-June. To reiterate, we will generate our signals by adding a new ‘Signal’ series to our dataframe, where 1 implies a long signal and -1 a short.

• Now notice here how the lows are going in clearly different directions.
• Then, you’ll need to consider which assets you want to trade and how you plan on doing it.
• While HODLing may not offer the excitement of day-trading or short-term strategies, it has several advantages that make it appealing to both beginner and experienced traders.
• With one of these factors, a trader could provide substantial returns to the group and help improve their trading strategy.

Let’s take a look at the X-factor in this gumbo, that is, the best crypto day trading strategies you can use. When an individual invests a fixed amount of money at regular intervals (e.g., states monthly) in a specific asset, regardless of its price fluctuations it is considered dollar cost averaging. Scalping is also a popular trading strategy in the cryptocurrency market.

Crypto futures trading

If the perp price is above the underlying asset spot price, traders who are long pay a fee to traders who are short – this is a positive funding rate. In contrast, if the funding rate is negative, traders who are short pay the traders who are long. This mechanism keeps the perp price inline with the spot price, as it becomes more expensive for traders to hold the – contract the more it diverges. Technical indicators are used by most market participants and remain prevalent today. For example, if you aim to comprehend the direction of public interest, consider examining the Relative Strength Index (RSI). The RSI is widely recognized and utilized by retail traders for its popularity in capturing trends and market sentiment.

• When using multiple moving averages, crosses of these moving averages can serve as warning signals or as confirmation of a newly-formed trend.
• Since it is a long-term strategy, you have to pay more fees while trading your crypto assets.
• The fast-paced nature of this strategy requires traders to stay updated with market news, technical analysis indicators, and patterns.
• Other notable cryptocurrencies include Litecoin, Bitcoin Cash, and Binance Coin.

If they can show other successful projects they have worked on, all the better. If you cannot determine the main names and faces behind a project, this could potentially be a huge red flag. Read the whitepaper, see what people are saying, and ask yourself if you understand what kind of asset this is and if there is a real demand for it. Some coins have companies behind them, offer utilities, and are structured at least similarly to legacy stocks, while others are closer to commodities like gold or fiat currencies. Analyzing cryptocurrencies can be a bit different, but there are parallels. There is a more advanced version of DCA in which it is combined with other strategies, including the ones below, so that you still make regular purchases but only when certain conditions are met.

Understand the crypto market

They do, however, have to consider possible changes in the trend and risks it may pose. Advanced crypto traders usually use Fundamental Analysis, which is an overall look at the health, value, and growth patterns of a crypto asset to predict trends. Moving averages, projected trend lines, and technical indicators can be additional indexes that can assist on this front. The best crypto trading strategy spread is actually a combination of effective trading methods. A lot of these strategies are derived from methods used in forex and stock exchange, with a few tweaks to make them suitable for use in crypto markets.

• Looking at the chart below, we can see that there were three key RSI divergences on the recent bitcoin/U.S.
• Even developmental news about coins can be profitable if you use them wisely.
• Crypto trading offers lucrative opportunities, but it also comes with its fair share of risks.
• Start trading the cryptocurrency of your choice using your preferred trading strategy.

There are plenty of trading strategies out there and several platforms that some of the most popular day trading strategies are range trading, scalping, and arbitrage. If you want to save time, you can instantly copy professional traders plays with eToro, and learn as you go. The Relative Strength Index (RSI) is a technical indicator used in financial markets to assess the momentum and strength of price movements of an asset. RSI is calculated based on the ratio of the average gains to average losses over a specified period, typically 14 days. Your crypto trading strategy is a fixed plan that you design to achieve profitable returns when buying or selling in the crypto markets. This plan employs various analytical tools to identify predefined market conditions and price levels, including important resistance and support areas.