Trading styles in the crypto market – Which one is the best?
As much as it can be very popular, there are also many people who try to avoid crypto trading due to the risks associated with the market. In most cases, the risks of the crypto trading market come from the huge volatility of the market.
However, there are many ways you can avoid the risks associated with crypto trading. A proper and useful trading strategy and style can help you better trade crypto and even generate stable income from the crypto trading market.
There are different types of traders in the crypto trading market. While there are some who prefer generating short-term profits over a small period of time, there are others who prefer to stack up the profits by trading crypto long-term. No matter which one you choose, you will need to stay focused at all times, to make sure that you have good control of your trading positions.
Types of crypto traders
As we have already mentioned, there generally are two main types of crypto traders. There are some who prefer short-term trading, while there are others who invest in crypto long-term. Those looking forward to quick returns in the crypto market are buying and selling cryptocurrencies in shorter time frames.
There are also the people who invest in NFT, and even play nft games as a means of making passive income.
This means that they are buying crypto at the beginning of the day, and selling it before the end of the day. The time frame can be smaller as well, you can buy crypto and sell it in 15 minutes, or in an hour.
This depends on the market conditions, performance, and your personal needs. There are some advantages as well as disadvantages associated with this market. One advantage is that you won’t be losing a lot of money if the market goes against your predictions, however, the returns won’t be high as well.
Because of this, the majority of the short-term traders are using margin trading. Using leverage when trading crypto can increase your profits a lot, but keep in mind that this can get quite risky as well as leverage also increases the possible losses in your trading.
As for the long-term traders, these are people who prefer to buy a cryptocurrency at a lower price and hold it for weeks, months, or even years. These traders are not affected by small changes in the market, rather, they mostly focus on huge returns in the future.
Automated trading
Using automated trading is a great idea for traders of all walks. No matter which style you want to use, you can always use trading bots to make sure you don’t make any emotional decisions. Among the most popular trading bots is the Bitsgap trading robot, which offers traders the ability to not only analyze the market but actually trade crypto for you.
Both long-term and short-term traders can use this strategy, but it is more popular among short-term traders as it is capable of doing everything very quickly and efficiently. Bitsgap bot is also capable of backtesting any strategy that you might want to use, giving you a better idea of how useful the strategy can be.
Long term trading strategies
While the two mentioned above are the most popular trading styles, they can be further subdivided into smaller categories of crypto trading strategies. When it comes to long-term crypto trading, the time holding crypto can be very long. One very popular strategy is simply holding.
You might already have heard about this one, which is very frequently used by traders who are also calling on others to Hold On For Dear Life (HOLD). This trading style is a passive trading strategy, during which you simply buy a cryptocurrency when the price is low and wait for it to increase as much as it can.
This can last for months, or even a year. Traders are using this strategy when they believe that the price of a certain cryptocurrency is going to increase a lot in the long run. This trading strategy is actually quite easy to use, as you will not have to check the market data every day. You can simply buy the cryptocurrency, sit back, and watch your money grow.
Position trading is another long trading strategy that can last from a year to several years. While using this strategy, you are basically trusting your cryptocurrency. Another very popular strategy is swing trading, which is somewhere in the middle of long and short-term trading. But, many see it as more of a short-term strategy, where the positions are open for several days or weeks.
Short term trading strategies
Among the most popular short-term trading strategies in the market is day trading. As the crypto trading market is open 24 hours, crypto day trading refers to positions that are closed during the same day. Day trading crypto happens during the most active hours of the day and the position can span from 30 minutes to a few hours.
Because the market is so volatile, day traders have a lot of opportunities of making profits. A special kind of day trading strategy is scalping, which means that traders are buying and selling cryptos in a matter of minutes before the price increases. The main idea behind this strategy is to use every little movement in the market to your advantage.
Which is the best?
Both long-term and short-term trading strategies can be very helpful for crypto traders. It all depends on the personal preferences of the trader. If you are not ready to sit in front of your computer the whole day and prefer to invest in something and simply relax and watch your money grow, a long-term strategy is a better choice for you.
However, if you want to be a very active member of the crypto trading market and gain small returns very frequently, short-term strategies might be a better fit for you.
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