Friday, January 21, 2022
Home Ultimate Crypto Trading Guide-Chapter 3-Trading Strategies

Ultimate Crypto Trading Guide-Chapter 3-Trading Strategies

- Advertisement -

Table of Content:


Trading Strategies

What is a trading strategy?

A trading strategy is simply a plan you follow when executing trades. There’s no single correct approach to trading, so each strategy will largely depend on the trader’s profile and preferences.

Regardless of your approach to trading, establishing a plan is crucial – it outlines clear goals and can prevent you from going off course due to emotion. Typically, you’ll want to decide what you’re trading, how you’re going to trade it, and the points at which you’ll enter and exit.

What is day trading?

Day trading is a strategy that involves entering and exiting positions within the same day. The term comes from legacy markets, referencing the fact that they’re only open for set periods during the day. Outside of those periods, day traders are not expected to keep any of their positions open.

Cryptocurrency markets, as you probably know, are not subject to opening or closing times. You can trade around the clock every day of the year. Still, day trading in the context of cryptocurrency tends to refer to a trading style where the trader enters and exits positions within 24 hours.
In day trading, you’ll often rely on technical analysis to determine which assets to trade. Because profits in such a short period can be minimal, you may opt to trade across a wide range of assets to try and maximize your returns. That said, some might exclusively trade the same pair for years.
This style is obviously a very active trading strategy. It can be highly profitable, but it carries with it a significant amount of risk. As such, day trading is generally better suited to experienced traders.



What is swing trading?

Swing trading is a style of trading that attempts to capture short- to medium-term gains in a stock (or any financial instrument) over a period of a few days to several weeks. Swing traders primarily use technical analysis to look for trading opportunities. These traders may utilize fundamental analysis in addition to analyzing price trends and patterns.

  • Swing trading involves taking trades that last a couple of days up to several months in order to profit from an anticipated price move.
  • Swing trading exposes a trader to overnight and weekend risk, where the price could gap and open the following session at a substantially different price.
  • Swing traders can take profits utilizing an established risk/reward ratio based on a stop loss and profit target, or they can take profits or losses based on a technical indicator or price action movements.

 

Swing Trading In Urdu/Hindi




What is scalping?

Of all of the strategies discussed, scalping takes place across the smallest time frames. Scalpers attempt to game small fluctuations in price, often entering and exiting positions within minutes (or even seconds).
Due to the short time frames, scalping trades often give a small percentage of profits – usually lower than 1%. But scalping is a numbers game, so repeated small profits can add up over time.
Scalping is by no means a beginner’s strategy. An in-depth understanding of the markets, the platforms you’re trading on, and technical analysis are vital to success. That said, for traders that know what they’re doing, identifying the right patterns and taking advantage of short-term fluctuations can be highly profitable.

What is buy and hold?

The “buy and hold” strategy, perhaps unsurprisingly, involves buying and holding an asset. It’s a long-term passive play where investors purchase the asset and then leave it alone, regardless of market conditions. A good example of this in the crypto space is Holding, which typically refers to investors that prefer to buy and hold for years instead of actively trading.
This can be an advantageous approach for those that prefer “hands-off” investing as they don’t need to worry about short-term fluctuations or capital gains taxes. On the other hand, it requires patience on the investor’s part and assumes that the asset won’t end up totally worthless.

What is paper trading?

A paper trade is a simulated trade that allows an investor to practice buying and selling without risking real money. The term dates back to a time when (before the proliferation of online trading platforms) aspiring traders would practice on paper before risking money in live markets.

  • Paper trading is simulated trading that allows investors to practice buying and selling securities.
  • Paper trading can test a new investment strategy before employing it in a live account.
  • Many online brokers offer clients paper trade accounts.
  • Paper trades teach novices how to navigate platforms and make trades, but may not represent the true emotions that occur during real market condition.

 

- Advertisement -
Jakkkhttps://thecryptobasic.com/
Owner of TheCryptoBasic. Involved in cryptocurrencies for more than five years, Love to trade and write on cryptocurrencies. My primary aim is to provide genuine information to cryptocurrency readers because crypto is filled with frauds and scams. Accurate information is scarce to get. So We at TheCryptoBasic will be providing accurate information about cryptocurrencies topics that users can trust.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisment -

Recent News & Articles

Polkadex Joins Second Round of Parachain Auctions with Community Crowdloan

Tortola, British Virgin Islands,, 21st January, 2022,  — Polkadex Inc., the DeFi order-book exchange built on Substrate, has announced its parachain bid, aiming to...

Former VK.com CEO Andrew Rogozov Joins TON Foundation as Founding Member to Oversee Product Efforts at Successor of Telegram’s Blockchain Project

Abu Dhabi, UAE, 21st January, 2022, ChainwireAfter years of building, The Open Network (TON) is excited to announce an exclusive addition to its team:...

FTX Exchange Launches FTX Visa Cards That Will Enable Users To Spend Their Balances At Merchants Worldwide

FTX launches debit cards in collaboration with Visa. window.coinzilla_display = window.coinzilla_display || ; var...

Has The Time Come For Shiba Inu To Get Listed On Robinhood, As The Exchange Launch Public Beta Crypto Wallets

Online broker Robinhood has launched a cryptocurrency wallet beta program for 1,000 selected clients on a waiting list. ...

Ethereum Co-Founder Vitalik Buterin Comes Up With His Guess About Satoshi Nakamoto

During a conversation with UpOnlyTV, Vitalik Buterin, founder of Ethereum, spoke about the current challenges of his project and its use cases.

Top 5 Leading Crypto Firms

The blockchain sector is still in its infancy, but it is expanding rapidly. Blockchains are decentralized databases that are shared across computer network nodes...

Heroes of Mavia Closes $5.5 Million Seed Round Led by Binance Labs, Genblock Capital

Hanoi, Vietnam, 21st January, 2022, ChainwireHeroes of Mavia, a blockchain-based play-to-earn massively multiplayer online (MMO) strategy game developed by Skrice Studios, is thrilled to...

Subscribe To Our Newsletter

Get Updated with All The latest Crypto News, Articles, Reviews, Analysis and much more. Delivered Every Monday.