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7 Crypto Trading Tips & Strategies in 2021

rohit ch
7 Crypto Trading Tips & Strategies in 2021

A crypto trading strategy helps a person perform a specific task with the proper market and technical analysis. A strategy is anyways important, but when it comes to cryptocurrencies, it becomes a significant thing. This is because of the notorious nature of cryptocurrencies and the uncertainty associated with it. If you’re someone who is thinking of being a crypto trader, we believe this post should be on top of your read list.

It is not hidden from anyone that during January 2018, when the price of Bitcoin crashed, most people suffered huge losses. Inevitably, many people lost a lot of money, but the people who were wary of their actions and had a variety of tools and techniques required to make profits, successfully handled that situation too. This was the magic of strategies and a strict mindset towards these strategies, which helped them “sail that storm” smoothly.

These strategies do54 nothing but help you learn when and from where you should exit and enter the market. And yes, as we promised, we are going to share with you 7 Basic but Very Essential Crypto Trading Strategies, which might help you to become a millionaire one day. However, before moving to these strategies, let us first discuss some tips which everyone must know before being a crypto trader.

Tips every beginner crypto trader must know 

  1. Know the Market First: 

    The Crypto community is usually volatile in nature, and that’s why it is essential to understand the crypto market first, and then start executing your crypto trading strategies. Know the factors influencing the price and market like supply, speculation, news, etc., and understand the risks associated with it.

  2. After understanding the basics, choose the trading method:

    Whether you’ll be purchasing the coins directly or will be speculating the price.

  3. Walk with a Plan:

    It is very much basic to build up a plan before you start working on a cryptocurrency trading strategy. When people work with a clear plan and stick to it with complete dedication and discipline, they are less likely to fall for things like greed and fear. This plan should also include goals which you are aiming upon. But, make sure the goals you set are achievable and not making bluff claims, as it can affect your motivation for trading too.

  4. Take Calculative Risks:

    As we all know, Bitcoin is infamously known for its notorious volatility, but remember, volatile nature generally comes with risk. That’s why it is very necessary to understand how to take calculative risks before you get into this market and start implementing your crypto trading strategies. You should be able to manage your risks by knowing where and when to stop and limit yourself. Also, analyze your risk profile by knowing the available capital, and how much you’re willing to risk for the trade.

With these tips on your “Fingertips”, no one can stop you from being a pro-trader. Now, it’s time to head towards our amazing strategies. While these strategies are designed and tested by experts, these not all guarantee you success. Because the price of crypto fluctuates a bit too much than its other counterparts, but these could help you minimize the losses and maximize your profits.

7 Crypto Trading Strategies to Go from Broke to Rich

1 Trend Trading Strategy

A remarkable crypto trading strategy for the people who believe in their intuitions. As the name suggests, this strategy emphasizes following the trend, i.e., to trade with the trend. If you think the prices are trending upwards, opt for long trades. While if you think the market is going to follow a diminishing graph, then only be open for short trades. It is also called “Position Trading.”

Usually, people do not go with their intuitions only. Instead, they use technical analytics and tools, such as margin trading, to predict the direction of the market and maximize their profits. Thus, note that point too!!!

2 Trimming Strategy

For a short-term fall in the market,  go for an astounding cryptocurrency trading strategy at that time. It states, opening your cryptocurrency, for a short term, for sale because you believe that the market is about to fall, to avoid losses. And if the prices fell, as per your expectations, then repurchase your crypto coins at a lower price and then profit from the difference. Isn’t this amazing? 

Remember, trimming (or often called ‘hedging’) also has a significant amount of risks involved as the market can also go against your expectations. It happens because there is specifically no constraint in the crypto market. Therefore, always have some risk management ideas in place with you.

3 Buy the Losers Strategy

Wait!!! Don’t feel downhearted by its name. As a beginner, you might not feel right, but a sharp fall in any asset’s value is a fantastic opportunity to buy it, specifically big falls. Because it is most likely that the prices will go up as the market starts to regain its confidence. It is a case of profiting from undervalued assets.

For example, If we talk about Bitcoins, these are considered to be highly sensitive to the external environment and events, particularly news and media hypes. When any good news pops up, people rush to buy this crypto, and when anything bad comes, people sell their coins.

4 The Averaging Strategy

Here comes the next amazing cryptocurrency trading strategy for beginners, which will neither cost them much time nor requires much knowledge. According to this strategy, one need not invest their whole money in a lump sum at a time. Instead, it tells you to invest a fixed amount at specific intervals. Let’s understand this thing with an example.

For example, you plan to invest £1000 in Bitcoin for 5 months; however, you don’t pitch the whole amount at one go. You spend £200 in 5 installments at the starting of each month at different rates.

What happens here is that you reduce the amount of risk which might happen because of price fluctuations.

PS: But remember every coin has two sides; this can also mitigate the potential profit which you might have got in lump sum investment.

5 The Balanced Strategy for trading

If you’re a balanced person, then this may be the strategy for you. A balanced strategy includes investing your amount on different cryptocurrencies rather than investing in one. This would eventually distribute the risk across your investments. But this cryptocurrency trading strategy has the same downside. Suppose your one investment moves 25% upwards, but the other gets 10% down, you would have to bear that loss too. Essentially you’re spreading the risk, whether its loss or profit; it would happen in a balanced manner.

Pro Tip: Make sure you invest your amount in cryptocurrencies of different types and nature. For example, one equity coin, one private, one security coin, etc.

6 The Lending Strategy

Do you think you are not the one made for trading? If yes, then this strategy might sound interesting to you. You need to build a crypto portfolio, i.e., buy some crypto coins, and then lend them to someone else. Believe it or not, but it is true. Some websites and platforms such as Nexo and Cryptoland can get you up to 10% interest.

You don’t need to sit near a trading platform, looking for patterns and analysing the graphs. But, then whatever the profits would be from your investments, it wouldn’t come to you. Basically, apart from interest, you will not be getting anything. Also, these lending platforms only take stable coins, while some take only popular ones. It is kind of a safe bet!!!

7 The Biased Strategy

Like its name, the biased strategy works on how you think a crypto token will perform. It is completely opposite to ‘The Balanced Strategy.’ In simple words, it is spreading your investment unevenly according to how you think one will work in the market. For example, you think Litecoin has been a great player in the market and would be most profitable, as per you. Then, you’ll invest your major stakes in Litecoin and some in others, unevenly, as per your choice.

This is the best suitable cryptocurrency trading strategy for those who have done some research on their part. The only bad and the most common outcome is predicting incorrectly and then losing out money. Thus, make sure to have some really good reasons before going for it.

Rounding up

So, these were the strategies for you. Now that you are aware of some really cool strategies, just jump into the market and start earning. Most people have a misconception that crypto trading is a gambling game; however, it requires patience, discipline, dedication, and some tools and techniques. Having the best future in trading is completely based on knowledge and experience, but these crypto trading strategies are going to give you a better start.

rohit ch
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