The crypto market is picking up speed again and it’s now as good a time as ever to start trading. According to reports, the market will grow by 12.5% by 2030, meaning there is potential for significant profit. If you enter now, you could take advantage of this growth.
However, if you are new to cryptocurrency, trading can feel confusing. The market is indeed complex, and there are real risks involved. This is why understanding how to trade properly is so important.
In this guide, we will explain simple crypto trading strategies that beginners can use. These strategies are easy to follow, and some even offer shortcuts. By using these methods, you can start trading with more confidence and reduce some of the risks.
Before we explain the best ways to trade in cryptocurrencies, let us first explain what this type of trading entails.
What Is Cryptocurrency Trading?
Crypto trading means buying and selling coins with the intention to buy at a low price and sell at a higher price to earn a profit. Essentially, it is a trade on price changes. In this way, it resembles foreign exchange or stock and bond trading, except the market is open all day and more volatile.
Top Strategies for Investing in Cryptocurrency
To effectively trade in cryptocurrencies, you will need to either buy and sell coins manually or use a bot that operates on specific rules. The following strategies will enable you to start building wealth with cryptocurrencies:
1. Scalping Trading
Scalping is a popular crypto trading strategy. This strategy requires you to make frequent coin exchanges within a day. With each exchange, you will take advantage of small price changes. This is especially profitable if there are frequent price fluctuations. Nonetheless, this strategy can be risky and requires a high amount of effort and time. You would need to plan your trades carefully and study the cryptocurrencies to manage your risks.
2. Swing Trading
Swing trading is a long-term strategy that uses moving averages. After tracking the average maximum and minimum value of a cryptocurrency for months, you can buy coins at their lowest value and sell them at their peak value. As a novice, you should use trading bots to do this. They can quickly make the trades, freeing you to focus on other activities.
3. HODLing
Another crypto investment strategy is HODLing. This is a long-term strategy that relies on simply holding onto coins for a long time, allowing the coin to change value. This strategy avoids the risk of daily price fluctuation but ties up your assets for a long time with no guarantee that they will increase in value. Nevertheless, with the right investment, you can make a profit. For instance, reports demonstrate that Bitcoin gained over $38,000 in value in the past year.
4. Arbitrage Trading
Lastly, arbitrage is one of the most suitable crypto strategies for beginners. To use this strategy, you will need to observe a cryptocurrency in multiple markets. Then, you will buy coins in the cheaper market and sell them in an expensive market. Although this strategy has a low risk, the profit is minimal because of transaction and withdrawal fees and requires a lot of research.
Best Tips to Optimize Your Crypto Trading Strategies
As a beginner, you may not know the common pitfalls of this type of trading. Even if you have experience in trading, cryptocurrency markets operate differently. So, here are the best tips to minimize your risks as you implement your trading strategy:
- Outline a trading plan: You should list your investment goals for the near and distant future. This may require using a blend of strategies.
- Research cryptocurrencies: Before you make a trade, you will need to gather data on cryptocurrencies, use trend indicators, and watch the news. Then, you should make your decisions based on the results of your research.
- Trade well-known coins: You should buy and sell well-known cryptocurrencies such as Bitcoin and Ethereum. These currencies are less volatile and data on their performance is more readily available.
- Avoid margin trades: As a novice, you should avoid using borrowed funds in your trades. Otherwise, if your investment fails, you may incur large losses.
Simplify Your Cryptocurrency Trading Strategy with CryptoCracker
Trading cryptocurrencies effectively requires good planning and real-time data. While you could watch the news and track currency values on your own, it can take a lot of time—time you could use to earn more.
With CryptoCracker, you have all the data you need at your fingertips. Our reports are detailed yet simple to understand, helping you make smart, data-driven decisions. You can also track your portfolio right on our platform, so you always know how your investments are doing. Plus, our recommendation tool and savings services will tell you what coins you should trade based on your individual portfolio to optimize your wins and minimize your losses.
The Bottom Line
Now you know the best crypto trading strategies for beginners, such as Scalping, Swing, HODLing, and Arbitrage. If you are comfortable with some risk, you can use Scalping to quickly earn a profit. Meanwhile, Swing trading and HODLing are more long-term strategies perfect for the risk-averse trader.
When you find yourself struggling to trade in cryptocurrencies, CryptoCracker is your go-to solution. On our platform, you will find the data you need to make sound decisions. After the fact, you will also be able to see how well your trades have performed over time.
Frequently Asked Questions
What is the most profitable crypto trading strategy?
The most profitable crypto trading strategy is range trading. To use this strategy, you need to note the highest and lowest value of a coin within a time frame. Once you have identified this range, you can buy cryptocurrencies when their values are low and sell them when they are high. You should use this strategy with a cryptocurrency that is relatively stable.
What is the best time to trade cryptocurrency?
The best time to trade is 6:00 am – 9:00 am UTC. At this time, many traders are starting their day, and the market is volatile. Therefore, you can take advantage of the dips and peaks in the value of cryptocurrencies.
What is a good amount to start trading crypto?
$200 – $500 is a good amount to start trading crypto. In general, you should start trading less than 10% of the value of your easily liquidated assets. This will minimize your risks and enable you to return to trading even if you make a loss.