Discover the crypto trading strategy we use to remain profitable — technically — at all times, with guaranteed safety of your capital.
Arguably, trade is the best way to make much money within a relatively short time in Crypto.
Every cryptocurrency trader and investor aims to make as much profit as possible. Still, 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 is said and done?
The answer is right in this article. Read on.
What is Crypto Trading? Correct to trading refers to buying and selling cryptocurrencies with fiat or exchanging 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 day of the week, including weekends, without central regulation.
Types of Crypto Trading Strategies
Before we delve deep into our specific best crypto trading strategy, I would like to highlight the different crypto trading strategies available.
So that in case my strategy does not resonate with your characteristics and goals or you disagree 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 or 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 buy 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 the 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 on 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).
Understanding 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
Like the range trading strategy, Swing traders aim to buy a cryptocurrency at or close to the bottom (support) and hold onto their positions over a few days to several weeks and, in some cases, months to make as much profit as possible from the trade.
If I believe that Bitcoin has found a bottom at $5,500, I estimate that within the next few days to weeks, the price will likely 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 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 will reverse its trend and reopen new positions, as the case may be, to ride the next trend.
Position trading is the best crypto trading strategy for most investors because it takes less 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, technical or fundamental analysis, or a combination of both for added advantage.
- Ensure you’re trading on reputable exchanges such as Binance, KuCoin, or top cryptocurrency exchanges.
- Open a position on your chosen cryptocurrency after 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 correctly. Once you determine what profit level you wish to achieve with this trade, set your order accordingly and walk away.
- Getting your order filled can take weeks, months, or even a year; it doesn’t matter. You’re the patient and disciplined investor and trader that will be profitable.
- If necessary, you can shift your profit goal 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 oCrypto will be willing to hold onto it 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, 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 exits scams.
Therefore, determining what coin to buy based on thorough fundamental analysis is as vital 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 significant support as possible for maximum profit
- Exit the trades as close to a significant resistance as possible
- Know that there’s no perfect entry or a perfect exit, so don’t bother seeking it
- You can still lose money to scam exchanges even if everything goes right. So trade only on reputable exchanges because you will hold the coins for a long time there.
- You must have much 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 if evidence suggests the coin or the exchange you’re trading on is about to escape.
- 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 buying low and selling at a higher price; depending on your buying position, you may have to wait longer than necessary to reach profit.
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.