Current Crypto Trading Strategies 2022

trading strategy crypto

Cryptocurrency trading has been in the market for a long time now, and while it has paved the way for some people to earn or increase their profits, crypto trading is easier said than done. The process is not about buying cryptos and selling them. There are many things that you need to prepare as well as ensure that you have a long term goal that you want to achieve with cryptocurrency.

Whether you are new to crypto trading or an experienced trader, you should know that there will never be a perfect crypto trading strategy for everyone . The various trading strategies that exist have only one purpose: to provide traders with a basis for minimizing losses due to the highly volatile nature of the market – which is an extremely risky place to spend large amounts of funds.

What is a trading strategy?

A trading strategy is a guide that helps traders come up with a perfect strategy for directions, movements and decisions for all crypto trading activity. Apart from engaging on platforms such as Immediate Edge in order to search for trusted brokers and utilize the best trading tools, some traders focus on a trading strategy as a scope and limitation that will indicate all resources and information gathered and analyzed under a certain set of tools for a particular digital currency.

You might be wondering why we need to use trading strategies? The main purpose of the strategies is to allow beginners and experienced traders to avoid impulsive decisions or bad moves that would lead to a big loss and put an end to their career. Trading strategies are general, so how you use them and how to incorporate them into your trading style is entirely up to you.

However, you don’t need to immediately choose a strategy and experiment on the market; There is a way to confirm whether your chosen plan is beneficial to your long-term goals – through forward testing and follow-up. Paper trading allows users to buy and sell digital currencies in the real world without using real money; This allows traders to get a glimpse of the real market without any worries.

Crypto trading strategies

Trading in cryptocurrency is considered time-consuming, which requires traders to constantly manage their portfolios, as well as monitor trends and changes in the digital currencies.

1. Buy and hold

Buy and hold is a passive type of trading that allows users to invest by getting involved in the crypto world without having to dedicate much of their time to managing their portfolios. This strategy is the most obvious but fundamental strategy that allows investors to trade without having to worry about timing or tools to know the best entry and exit based on their financial position.

If you are the type of trader who sees cryptocurrency as an investment that allows users to diversify their portfolios, the buy and hold strategy is ideal. This technique refers to buying cryptos low in the market, and holding them until they are high enough to be sold, which usually happens in passive trading.

2. Day trading

Day trading is the most widely used active trading strategy, and is often mistaken for a strategy that is only relevant for active traders. Despite the name, day trading is not trading only during a business day, but a type of trading where users can enter and exit within 24 hours or less.

To understand the day trading strategy, consider how crypto traders buy coins at a low price (entry) and sell them at a higher price (exit). The key to day trading is to make the most of crypto market volatility to analyze the movement of digital currency trends to earn or make profit for each transaction.

Although this strategy is the most common active trading strategy, day trading requires a lot of skill and involves a lot of risk. Because of this, it is important to monitor price developments and create trading ideas from the trends through automated platforms, to avoid the demanding and stressful part.

3. Trend trading

The most common active trading strategy is not beginner-friendly, because it requires a lot of experience and skill of traders to handle various activities to make a profit. The trend trading strategy involves users staying in a position for a certain period of time depending on the directional trends in cryptocurrency.

For example, if you buy low and stay for a certain amount of time until the price of the selected coin is high enough to sell, it means that you have entered the trend and have prepared to hold your position for a long time. But that does not mean that users will always hold their position for a long time. With Trendhandel, users can analyze the trend lines and keep track of technical indicators to identify downturns and give users a starting point.

Final thoughts

Finding the best trading strategy can take some time, but it is an important step that will affect the process of reaching your goals. Know that trading plans vary for each trader and what works for one does not guarantee the same result as another trader. The list above contains only some of the current best cryptotrading strategies that have proven effective in recent years.

Author Ludvig

Ludvig har lang erfaring med kjøp og salg av kryptovaluta. De senere årene har han tatt det til et nytt nivå og prøver å leve av kryptovaluta trading. Han følger godt med på markedet og har opparbeidet seg god kompetanse på teknisk analyse mm. Vi er veldig glad for å ha Ludvig med på laget, og er det noe du lurer på angående kryptovaluta er dette mannen du spør!