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Crypto trading strategies

What is crypto trading?

Crypto or cryptocurrency trading is the act of speculating on the price movement of cryptocurrency through a CFD trading account or buying or purchasing the underlying coins through the exchange. In this piece of content, we will discuss crypto trading strategies.

How does crypto trading work?

Here are the steps of crypto trading.

1. Cryptocurrency brokerage account:

If you own a cryptocurrency brokerage account is a must thing for you. You can pick crypto brokerage for that. There are plenty of choices available in the market. For account creation, you need to provide your crypto brokerage with personal identity and information. You need to submit information like address, date of birth, email address, and social security number.

2. Funding the account:

After signing up for your brokerage account you need to connect it with your conventional bank account for funding. Most crypto brokerages accept bank funding via wire transfers and debit cards. Wire transfer is preferred more because it’s free on Coingbase and Gemini.

3. Choose crypto to invest:

A high percentage of cryptocurrency traders prefer to invest in Ethereum and Bitcoin. These two cryptos move more predictably as compared to smaller altcoins. Small mid-market cap cryptos involve more risk because they offer high upside potential. Some of the small altcoins have risen more than 1000% in the span of months which makes them attractive for risk-tolerant investors.

4. Pick a strategy:

There are many factors involved in selling and buying cryptocurrency. Strategy is one of the key factors in this list. If you’re just a newbie in the world of trading then you should take the advice of an expert regarding the choice of the right strategy. Someone already experienced in stock trading will easily pick the right strategy due to his background knowledge. Focus on the psychology behind the market sentiment, it works well for speculative asset building in cryptocurrency.

5. Automated crypto trading:

Automated crypto trading is quite a good thing in crypto trading. It works through trading bots. These trading bots will formalize a strategy that will give you some amazing results based on your investment goals. Using automated crypto trading you can make quick money, diversify your portfolio or hold your coins.

6. Cryptocurrency wallets:

Storage is an important aspect of crypto trading. In case you’re actively trading and buying cryptocurrency to keep them for the mid and long-term then a cryptocurrency wallet is a must thing for you. Both software and hardware wallets are available. Both are safe but hardware wallets are more reliable ones. You can store your crypto on a physical device or offline. Ledger is one the best hardware wallet. Many well-established crypto investors store their assets on the ledger. In the software category, there are a lot of options available on Andriod, IOS, and Web. Zengo is the most foolproof and secure software wallet. It also gives you 10$ cashback on your first crypto purchase.

Crypto trading strategies:

Here are crypto trading strategies that will give you high-profit returns.

Day trading:

Day trading involves exiting and taking positions on the same day. While adopting this strategy the trader aims for booking the profits between the intraday price fluctuations. Relying on technical indicators to figure out the entry and exit points for a particular type of crypto gives success.


Scalping is actually helpful to increase the overall trade volume to book profit. Although this strategy has some risk involved, a street smart trader looks after the margin requirements and other variables to avoid any loss. Scalpers pick an entry and exit point by analyzing the past trends, crypto assets, and volume.

Range trading:

Support and resistance on any particular day also play a big part. Resistance is a point at which price reaches above the current price. However, support is a level to which a crypto price isn’t supposed to fall. That’s why the support level is always below the current price.


It’s an algorithmic type of trading strategy. HFT is mostly used by quant traders. It involved algorithms and trading which are helpful to enter and exit a crypto asset quickly. The development of such bots and algorithms requires a proper understanding of complex marketing concepts and a strong grip of programming languages and mathematics. Therefore HFT or (High-frequency trading) is more suitable for advanced traders than beginners.

DCA or Dollar Cost Averaging:

DCA is actually investing a fixed amount at a regular interval. It helps the investors to get away with the hectic job of market timing and to build wealth in the long run. Although this strategy is quite useful it also has some drawbacks. Exit strategy in DCA is a tricky thing. It needs a handful study of market trends and an understanding of the market cycle. In order to make an exit at right time, you need to read technical charts. As a crypto investor, you should also take a closer look at overbought and oversold regions before taking a call.

Balanced portfolio:

Crypto trading is still at a growing stage. Some countries welcomed it while most of them are in doubt about it. Central banks all over the world are trying to regulate digital currencies and therefore crypto trading is a risky thing. However, there are some strategies through which investors can control the volatility. Building a balanced portfolio having a variety of cryptocurrencies will help a lot to overcome volatility. It will increase the risk appetite in a systematic manner and help your portfolio to produce good returns in the long term.

Ignoring social media:

Relying and believing on social media is one of the common mistakes that new investors make. As an investor, you shouldn’t make your decisions based on the social media hype. Cryptocurrency is a hot topic so false information travel very quickly.

Primary research:

Research is the most important factor to start anything new. Before investing in to buy a crypto asset you need to conduct primary research about it. It mainly involves being updated with relevant information regarding the crypto industry. Apart from this you also need to evaluate your budgeting and set a clear investment goal way before investing in a volatile asset like crypto. Research on each crypto type. These are a few important crypto trading strategies that you need to work on. Readout our other post as well.