In the world of crypto, there are many styles of trading. These shift in styles and are suited to a person’s varying preferences, tolerances and goals. However, despite their differences, sticking to a proven strategy allows you to keep your focus amidst the turbulent environment that typifies crypto – not to mention the constant flow of news, data, and market events that can impede your analysis.

 

A crypto trading strategy is an established method of planning and making trades on the market. Trading strategies usually set out specifications for which trades to make, when to make them, when to exit them, and how much you should risk on each position.

 

Your strategy is designed to achieve profitable returns when buying or selling throughout crypto markets. A strategy employs various analytical tools to identify predefined market conditions, price levels, including important resistance and support areas.

 

In this article, we look at the 5 most popular crypto trading strategies trading methods being used and explore how exactly each of these strategies work. This is not specific advice on how to use them. So remember to complete your own research before buying or trading crypto.

 

Scalping 

Scalping is a trading strategy that allows traders to profit from making quick trades with little price movement. The goal is to make consistent, small profits each day to generate a more substantial amount over time. Scalping often involves trading over one-minute, 15-minute, and 30-minute time frames that usually last a couple of seconds or minutes – but usually less than one hour. 

 

If you are comfortable spending your entire day seated in front of trading charts and entering and exiting multiple trades at regular intervals, then you may like to research scalping strategies. 

 

Day Trading 

Day trading is similar to scalping, but instead of making trades in intervals measured by minutes, they are made over the course of the day. It involves entering and exiting positions within the day where the aim is to capitalise on intraday price movements. 

 

Day trading strategies are created through in depth technical analysis. However, like scalping, it is a time-consuming and risky venture suitable for more advanced traders. 

 

Swing Trading 

Swing trading involves activity spanning more than a day, but usually no more than a few months. This strategy is considered as a medium-term trading strategy because it sits between the day trading and position trading. 

 

Swing trading is about understanding that crypto goes up and down in waves, and to be successful you need to find the bottom of the wave and ride it to the top. That being said, detecting the pattern and maintaining composure isn’t an easy feat. 

 

Buy and Hold (Position Trading)

This strategy involves traders holding positions for an extended time period. This means months, and in some cases years, where traders ignore short-term price fluctuations and focus more on following the long-term trends. 

This involves riding the temporary ups and downs of the market, while focusing on the long-term trade that is based on fundamental analysis of market price trends and considers other factors such as historical patterns and market trends.

 

Arbitrage Trading 

Buying crypto from one market and then selling it in another market to profit from price differences is known as arbitrage trading. This strategy takes advantage of the low price correlation among crypto assets offered across two or more exchanges.

 

Because there are hundreds of market exchanges available, cryptocurrency arbitrage opportunities are virtually limitless. As a result, traders look for more efficient ways to identify price differentials and capitalise across multiple exchanges.

 

Do Your Research 

At Think10, we’re committed to providing forward-thinking entrepreneurs and investors with the support that you need for long-term success across crypto trading platforms. We take an informed and reasonable approach to investment, whilst always thinking ten steps ahead. Want to learn more about the nature of crypto trading strategies? Contact us today.

Chris Cutout

Chris Dixon

Fund manager

cd@think10capital.com

Chris Dixon is a Think10 Capital’s Digital Fund Manager with specific responsibilities of managing digital funds and driving strategic growth. Dixon brings his experiences in capital and investment management through prior involvement in private equity and institutional investment in the United States. Over the past decade Dixon has lived and worked in Melbourne, Australia where he now resides.