Popular Crypto Trading Strategies Explained
Crypto markets are known for being insanely volatile that has created and destroyed many fortunes. Unlike the stocks, where a 2% gain holds greater significance, crypto markets have generated returns as high as 10x within a few hours. And that’s exactly why millions of users have flocked to crypto trading with the hope to generate immediate profits.
At the same time, exchanges have an opportunity to regale a huge pool of users by introducing more trading choices. Since most white label bitcoin exchange software tools support all major trading techniques, new entrants can quickly learn and participate in mainstream markets.
First of all, let us understand — What is a trading strategy?
A trading plan that educates the traders to discipline their trading activities requires a thorough analysis is known as a trading strategy. A good trading strategy helps traders mitigate the financial risks of the highly volatile crypto market and hone their subject matter expertise with time and trends.
To begin with the basics, HODLing is a popular term that has gained traction over the years. It simply means holding your crypto assets regardless of market conditions.
- New investors tend to buy crypto when the price rally is going on and end up buying at higher prices. Then they get caught into the trap of buying a top and selling when the market tumbles.
- HODLers are not able to take advantage of the crypto market volatility. They wait for the market to reach the top but remain unsure when is the best time to sell.
A few points to consider while starting your trading stint -
- Which assets do the traders mostly trade in? — Some exchanges are more popular for bitcoin trading and others for altcoin trading.
- Buy Bitcoin trading Software that supports stop-loss placement
- Traders tend to use White Label Bitcoin Exchange that offers more tools and indicators for efficient trading
- Traders use White Label Bitcoin Exchange Software that provides you charts to measure your portfolio performance.
Most used trading strategies
Many of the new crypto traders attempt to day trade. Thus, to be a beginner’s exchange it becomes very important to have an intuitive interface.
As is evident from the name, it is a kind of trading that involves opening and closing a trade on the same day. In simple words, day traders try to make the most out of the crypto asset price movements within one trading day (for crypto space this means 24 hours).
A day trader studies the market watches the price action and conducts technical analysis of the market to build a trading strategy. This type of trading can turn out to be very profitable if strategies are well-devised thus this type of trading is suitable for seasoned traders.
The term is self-explanatory and the trend traders hold their positions till the directional trend continues. As a result, these trading positions are held for a longer time. When the asset is up-trending, the traders might long the position and when it’s down-trending, they might short the position. An exchange that offers a dedicated screen that keeps a track of the price movement patterns can help traders make an educated decision.
White Label Cryptocurrency Exchange Development services embed the exchanges with capabilities to create long/short positions. Unlike day trading, trend trading requires traders to stick to fundamental analysis rather than technical analysis. Along with that, they need to keep an eye on MA (moving averages), trend lines, and some technical indicators. It is more suitable for beginner traders.
Scalping is a trading strategy that allows traders to make gains by making small trades multiple times in a day. The scalpers might choose to hold the position for a long time or open/close their positions within minutes. It is also popularly known as high-frequency trading. It is more suitable for experienced traders.
A very important feature of an exchange that the users will prefer for scalping is that the exchange must be super-fast.
If someone is a beginner or tends to be a long-term trader, swing trading is for him. Generally, a swing trade goes beyond a day but is shorter than a month. This is where traders ride the waves of market volatility and make the most of it. They need to conduct both technical and fundamental analyses to build a robust strategy.
For beginners, swing trading is one of the most convenient strategies to pick up. This allows them to wait for the trade to unfold over some time. However, to attract swing traders, the exchange must ensure its security features are top-notch.
A crypto trading strategy is something that needs to be worked up after conducting fundamental and technical analysis. We tried to educate you about some of the most common crypto trading strategies and what kind of features your exchange must have to support the needs of different kinds of traders.
At Antier Solutions, we are a team of blockchain experts who build solutions like cryptocurrency exchanges, smart contract-based MLMs, and more such products. If you wish to buy bitcoin trading software contact us over call and talk to our experts.