Today I will be writing about cryptocurrency day trading and the popular trading strategies often utilised in crypto trading, quiet alot of people engage or trade the cryptocurrency market and many have different trading strategies which works for them, we have often heard of the term "find what works for you" so this means find the trading strategy that fits your style and stick to it.
Alot of people engage in day trading in cryptocurrency and day trading often means that one engage in the market and makes quick decision trying to take advantage of the volatile market and often you rely on this your strategy to help you deliver price the way you want it to and day trading often means speculating price action intra day and trying to making money from the little moves of big moves depending on what we are looking for and our style of trading.
Most times we make make trading decisions and market goes against us it might not necessarily mean a strategy is bad might just be the market as we can't win it all, one thing I know is a good strategy shouldn't be judged based on just a few losses and loss is constant thing any day trader must be ready to face at one point or the other the goal is to always come out on top at the end of everything to be a profitable crypto trader.
With that said let's look into some of the popular strategies used by some of the best cryptocurrency traders out there;
Popular cryptocurrency trading strategy
Scalping
Scalping is a one of the trading strategy utilise by crypto day traders and it is those analyst who capitalize on small fluctuations in the market that use this strategy they are referred to as scalpers and mostly scalpers have 15mins as their highest timeframe coming down to 5mins, 3mins, 1mins as the case maybe for confirmation to enter trade, the idea is basically to take advantage of slight short term price movement.
Scalpers are the most active in the market and are constantly on the chart during their active trading time to take lots of small trades which they believe will eventually culminate to huge wins and they focus mainly on very minor price movement and that is enough for them if it goes their way to book profit, scalpers are mostly active throughout intra day trading.
Most scalpers use indicators and the most suitable indicator to use for scalpers are the relative strength index otherwise known simply as the RSI indicator or bollinger bands amongst others, this indiactors helps most scalp traders to know when a market is oversold or overbought and help to know when to close a trade and to enter the market also, so scalping is one strategy used in cryptocurrency day trading.
Range Trading
Range trading is another type of cryptocurrency trading strategy and may have found that this trading strategy suits their style perfectly and as such use it to and for many it has ensured and guaranteed them consistent profits in the market, but then what really is the idea behind range trading?
Well range trading often goes well with ranging market, some market maybe in ranging phase, when a market is ranging it could be seen as consolidating or a market that is not trending, a market can be in mostly 2 phases and that is trending or ranging and for the trending it's either bullish or bearish but for ranging market nothing is clear we don't know if the market would be bullish or bearish as it consistently bounced off support and resistance and this is what range traders utilise to great effect they take advantage of this ranging market and when it comes down to support range traders buy and when it goes to resistance level range traders sell.
In other to utilise this strategy it sure have to be in a market that's been established to be ranging that's where the percentage gains would be high and range traders have found indicators like the oscillators and support and resistance level indicator to be quiet helpful.
Momentum Trading
Momentum trading is one trading pattern that many have found to be quiet useful and fits perfectly with their personality, not everyone is comfortable with scalping or range trading, traders would rather ride or join in a ride in an established trend.
When a trend is identified already as bullish or bearish or when a market seems to be pumping high and very bullish in momentum some traders love this kind of thing and they would join in on this market that's been moving up already to ride it even to greater heights, this are refereed to as momentum traders, they take advantage of a bullish or bearish momentum and rides it possibly till their greed level is satisfied or to the end of the trend, so for the traders to enter they look for a market with an already established bullish or bearish momentum.
People who use this strategy often have found the MACD (Moving average convergence divergence) indicator to be quiet useful coupled with the ADX that is the average directional index to be of great help to them and that's because the MACD and the ADX indicator are valuable tools determine the true strength of any trend before engaging in it.
Breakout Trading
This is one strategy that many uses common both among newbies and even pros utilise it because in the right hand and on the right market and timeframe it could produce great and intended results and the traders who waits for markets to break out of a support or resistance zone before entering the market are called breakout traders.
For breakout traders they look for market with clear support and resistance line identity them and waits to see what happens, if the market breaks out of resistance zone they long the market and if it breaks below a support zone they short the market as long as they see the confirmation they want, that's just how the breakout strategy is.
The breakout strategy traders takes note of key patterns in the market like triangles in the form of ascending or descending triangle or they use flag patterns among others to watch what the market would do and in an event of breakout they enter the market with a certain level of confidence expecting price to deliver accordingly.
conclusion
It's imperative that one learn and acquire the right skillset before engaging in cryptocurrency day trading so as not to set yourself up for loss, without proper knowledge it's not advisable to trade the crypto market, one must only do that after acquring the right skillset as a volatile market like cryptocurrency isn't a playground for kids.
0.000 SRY