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Crypto Trading Strategies You Need To Know

In recent years, almost 100 crore Indians have invested in cryptocurrencies. Although investment in cryptocurrencies brings a large sum of profits, crypto trading is prone to risks and pitfalls. To earn higher returns, it is essential for traders to develop effective strategies. This blog will walk you through a few crypto trading strategies that can help you earn favourable returns.

  • Day Trading: As the name suggests, this crypto trading strategy involves buying and selling cryptocurrencies on the same day. The main goal of investors using this particular strategy is to see their holdings at the end of the day to reap short-term profits. Investors oftentimes depend on the technical indicators so that they can figure out the entry and exit points for the specific crypto.
  • Scalping: The increased trading volumes are used to book profit in this specific crypto trading strategy. Using the scalping trading strategy can be risky, but a smart and knowledgeable investor always takes care of the margin requirement and other essential rules of crypto trading so that bad trading experiences can be avoided. The scalpers analyse the crypto asset, past trends, and volumes so that entry and exit points can be chosen within the same day.
  • Range Trading: When adopting this particular crypto trading strategy, investors depend on the guidance of experienced analysts who provides both resistance and support levels every day. When it comes to the ‘Resistance’, it refers to a point up to which the price of the cryptocurrencies may rise. Therefore, it can be said that a resistance level is a price above the current price of cryptocurrencies. On the other hand, ‘Support’ is a level below which the price of cryptocurrencies can’t fall. Therefore, it can be said that a support level is a price below the current price of cryptocurrencies.
  • Position Trading: A position crypto trader is in the market for the long run and, therefore, has a long-term strategy. The expected upward trend is determined by the investor to invest in the cryptocurrencies, and then the same is sold post-the-trend at their planned profit.
  • High-Frequency Trading (HFT): This particular strategy is used by quant traders because of its algorithmic nature. The quant trader develops algorithms and trading bots using this strategy that further helps in quickly entering and exiting the crypto asset. To develop the trading bots, it is necessary for the investors to have an understanding of complex market concepts and strong knowledge of concepts of mathematics and computer science. Therefore, it is a more suitable strategy for advanced traders rather than beginners.
  • Swing Trading: This specific crypto trading strategy involves holding the crypto assets for a few weeks or months by the trader. When using this strategy, the trader tries to make profits based on the latest market trends. Usually, investors invest in the undervalued cryptocurrencies having the chance to go up in the future.

So, these are some crypto trading strategies that you can use to make profits.

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