If you want to reach the next level of your cryptocurrency trading skill, you have to choose a cryptocurrency trading strategy. Why is it important? The answer is very simple. Everybody wants to make quick money from cryptos, but just a couple of traders can be profitable. So, if you would like to become a professional trader and make more money, then you have to choose a cryptocurrency trading strategy, and stick to it no matter what happens.
There are a lot of profitable cryptocurrency trading strategies out there, but once you’ve decided that you want to make money, you’ll need to utilize an effective strategy. Let’s take a look at the most useful cryptocurrency trading strategies!
Cryptocurrency Trading Strategy No.1 : Technical Analysis
In other words, price action strategy. Probably this is one of the most utilized cryptocurrency trading strategy, because the human mind creates a common price action pattern which is useful to inform traders. It means that every event is shown on the chart. You see the bullish or bearish trends, you see the actual position of the market. You can read everything from the candles. If you’re able to read the candles and patterns, then you have a very useful skill. So, you just need to identify the best entry point. For more details about how to read cryptocurrency charts click here.
Cryptocurrency Trading Strategy No.2: Buy and Hold
Buy-and-hold strategy has definitely been one of the most profitable cryptocurrency trading strategies so far. You just have to invest at the right time. Just think about what happened in the end of 2017 when the BTC price was over 19.000 USD and the altcoins grew more than 100% or more.
If somebody bought a couple of (or a couple of hundreds) of BTC back in 2015 when the price was only between 200-300 USD and then he sold it at 19.000 USD now he is a millionaire.
So, the buy and hold cryptocurrency strategy can be a very good idea for long term investment.
Cryptocurrency Trading Strategy No.3: Support and Resistance
There are two very important line on the chart. The first one is the Support line and the second one is the Resistance line. We can identify breakouts on these lines. When cryptocurrencies are really on the move, they often break out a previous major Support or Resistance line.
First, we have to identify and draw horizontal lines to the major levels and we have to wait. If the price is close to the line we have to wait! If the price break out the line we also have to wait. Why? Because sometimes the price is just ‘testing’ the major line. So, we have to find the exact entry point and we have to identify the fake breakouts. You have to watch the candle. You already knew about candlestick charts, so you know that the right entry point when the candle broke out the major line with a big bullish or a big bearish candle.
Cryptocurrency Trading Strategy No.4: Fundamental Analysis
“Fundamental analysis is a method of measuring a security’s intrinsic value by examining related economic and financial factors. Fundamental analysts study anything that can affect the security’s value, from macroeconomic factors such as the state of the economy and industry conditions to microeconomic factors like the effectiveness of the company’s management. The end goal is to arrive at a number that an investor can compare with a security’s current price in order to see whether the security is undervalued or overvalued.”Source: Investopedia
Cryptocurrencies are not all the same. However, there are a lot of manipulations on the market. There are hundreds of cryptos on the market, that are being manipulated by the ‘pump and dump’ strategy so we need to be careful what crypto we choose.
If you feel like you want to try out one of the above mentioned trading strategies, we recommend you to use our highly trusted exchange platform The Peak. It is easy to use for beginners as well.