Discover the crypto trading strategy we use to remain profitable — technically — at all times; with guaranteed safety of your capital.
Arguably, the best way to make a lot of money within a relatively short time in crypto is to trade.
Every cryptocurrency trader and investor’s goal is to make as much profit as possible but given the extreme volatility characteristic of the crypto market, more than 90% of crypto traders are known to lose their money to the market.
How can you be in the 10% that go home with profit after all said and done?
The answer is right in this article. Read on.
What is Crypto Trading?
Crypto trading refers to the buying and selling of cryptocurrencies with fiat or exchanging of one cryptocurrency for another.
This is similar to foreign exchange (Forex) trading where currencies of different countries are traded against one another.
However, unlike Forex, the cryptocurrency market is open for trading every single day of the week, including weekends and without a central regulatory.
Types of Crypto Trading Strategies
Now before we delve deep into our specific best crypto trading strategy, I will like to highlight the different crypto trading strategies available to choose from.
So that in case my strategy does not resonate with your characteristics and goals or you simply don’t agree with my strategy you can choose another that will work for you perfectly.
There are many ways to kill a rat and you shouldn’t restrict yourself to someone else’s standards, opinions or blindly follow a strategy.
- Scalping Strategy
- Day Trading Strategy
- Range Trading Strategy
- Swing Trading Strategy
- Position Trading Strategy
1. Scalping Strategy
This involved buying and selling cryptocurrencies for quick small profits.
In practice scalping traders buys a coin, say Bitcoin for example, for $10,000 per coin and immediately sell it off at 10,005 making a quick $5 per coin.
You can do this with several coins or the same coin several times every day and if successful, the accumulated profits can add up to be something significant at the end of the day.
2. Day Trading Strategy
The day trading strategy is similar to scalping above. However, rather than opening and closing the trades in minutes, day traders hold their positions for a day or when they reach their specified profit target.
However, in an ideal world, a day-trader does not hold their positions over the night and onto the next day.
All trades are opened and closed the same day irrespective of profit targets and market movements.
3. Range Trading Strategy
This strategy best implemented in markets moving up and down with no specific determinable direction involves buying cryptocurrencies at the bottom (support) and selling them at or close to their top (resistance).
An understanding of support and resistance and the ability to analyze and interpret chart patterns are critical to the success of the day and range traders.
4. Swing Trading Strategy
Similar to range trading strategy, Swing traders aim to buy a cryptocurrency at or close to the bottom (support) and holding onto their positions over a few days to several weeks and in some cases months in other to make as much profit as possible from the trade.
If I believe that Bitcoin has found a bottom at $5,500 and estimate that within the next few days to weeks the price is likely to approach an imaginary $6,700 resistance.
I will buy the coin at or close to $5,500 as possible and sell it anywhere between $6,000 and $6,500 in other to lock in my profits.
5. Position Trading: The Best Crypto Trading Strategy
Position trading is an extended version of the swing trading strategy and shares similar characteristics with Crypto investing –buying and HODLing.
This trading strategy refers to buying and holding onto a crypto investment for an extended period –usually for weeks, months or even years with the expectation that the price will increase.
Position traders are more-or-less crypto investors because they hold onto their positions for the long-term.
But unlike actual investors, position traders will cash out their profit along the way or when they determine that the market is going to reverse its trend and reopening new positions as the case may be in other to ride the next trend.
I consider Position trading to be the best crypto trading strategy for most investors because it takes less of your time and effort and provides a higher profit potential.
More so, it is the simplest form of trading to implement but requires tons of patience, discipline and an understanding of fundamental analysis.
How does Position Trading Strategy Work in Practice?
- First, you require a good understanding or either technical or fundamental analysis or a combination of both for added advantage.
- Ensure you’re trading on reputable exchanges such as Binance, KuCoin or any of the top cryptocurrency exchanges.
- Open a position on your chosen cryptocurrency after you must have done a careful and thorough fundamental analysis. Check this article on what to consider before investing in any crypto project.
- Determine your profit target and stop-loss zone. How much profit do you want to make on this trade? – 20%, 30%, 50%, 100%, or even 1000%. Of course, you will want to be realistic and not get too greedy or fearful when setting your profit target and stop-loss.
- Do the math properly. Once you determine what level of profit you wish to achieve with this trade, set your order accordingly and walk away.
- It can take weeks, months or even a year to get your order filled; it doesn’t matter. You’re the patient and disciplined investor and trader that’s going to be profitable.
- You can shift your profit goal post IF necessary based on new and valid information. Flexibility is also part of the game.
- When your order gets filled, you repeat this process with the same coin or different crypto with an equally solid fundamental.
- You can run this strategy on multiple coins simultaneously if you have a sizeable trading capital.
What you must know to be Successful with the Position Trading Strategy
The cryptocurrency you have chosen to buy must be one you will be willing to hold onto for an extended period without freaking out when the market temporarily moves against you.
That requires that you have done your due diligence in the first place to determine the viability and sustainability of the project before investing in it.
So that if the price doesn’t appreciate soon enough to give you your profit target, you will be confident to keep HODLing like a regular investor.
If you practice this strategy with a “shitcoin” like “CoronaCoin” or “ToiletPaper Token” you will lose your entire investment if or when the project dies or the team exit scams.
Therefore determining what coin to buy based on thorough fundamental analysis is as important as every other step in implementing this strategy if not the most important.
I have been trading BTC, ETH, KCS, BAT, DASH, etc strictly with this strategy on KuCoin and Binance for months now and it works just fine “for me”.
For this trading strategy to be successful, you must:
- Buy only coins with excellent fundamentals as close to major support as possible for maximum profit
- Exit the trades as close to a major resistance as much as possible
- Know that there’s no perfect entry or a perfect exit, so don’t bother seeking it
- You can still lose your money to scam exchanges even if everything goes right. So trade only on reputable exchanges because you will be holding the coins for a long term on there.
- You must have tons of patience and discipline to remain calm even when the market moves against you temporarily. You are never exiting a position trade without a profit except evidence suggests the coin or the exchange you’re trading on is about to exit-scam.
- Stick to one strategy and master it so well. You wouldn’t go anywhere jumping from one strategy to another.
You will still make it even without a basic understanding of support and resistance by simply buying low and selling at a higher price but you may have to wait longer than necessary to reach profit depending on your buying position.
This strategy is so simple that even grandma can work it out with the right amount of patience and discipline.
What trading strategy do you use to remain profitable? Share with us in the comments section below.