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Crypto Trading Strategies You Need To Know


Over 10 crore Indians possess cryptocurrency, according to a recent news story. Crypto trading, like stock and commodity trading, comes with its own set of risks and drawbacks. Market participants must develop tactics that make trading both interesting and safe in order to reap long-term gains from crypto trading. Let's begin by looking through several tactics that can assist you in achieving favorable results.


Day trading

This trading method entails entering and quitting positions on the same day. The goal of a trader using this strategy is to profit from intraday price fluctuations in a cryptocurrency of their choice. Technical indicators are frequently used by investors to determine entry and exit points for specific cryptos in order to make a profitable transaction.

Primary Research

Primary research is one of the most significant trading tactics. To perform primary research on the worth of the item you desire to purchase, you do not need to be a trading expert. This entails keeping up with all of the latest developments in the crypto business. WazirX makes this easier by compiling all of the news stories you need to read before starting your day.
Furthermore, before betting on a risky asset class like crypto, you should assess your own funds and define an investing goal. On WazirX, you may learn about Bitcoin, Ethereum, Tron, Ripple, Litecoin, and other cryptocurrencies before investing.



Arbitrage

Arbitrage is a trading method in which a trader purchases cryptocurrency in one market and sells it in another. The spread is the difference between the buy and sell prices. Traders may be able to book profit due to the differential in liquidity and trading volume. To take advantage of this opportunity, you'll need to register accounts on exchanges that have a significant price difference for the cryptocurrency you're trading.

Range trading

Market participants often rely on expert analysts, who provide daily support and resistance levels. The term'resistance' refers to the maximum price that may be reached, therefore a resistance level is a price that is higher than the present price. 'Support,' on the other hand, is a level below which the price of a cryptocurrency is not supposed to fall; thus, a support level is always lower than the present price.

Scalping

This trading method entails increasing trading volumes in order to make a profit. Despite the risk, a savvy trader pays attention to the margin requirement and other crucial rules to avoid having a terrible trading experience. Scalpers examine the crypto asset, historical trends, and volume levels before deciding on an entrance and exit point within a day.



Build balanced portfolio

Cryptocurrency trading is still in its infancy. While certain countries encourage cryptocurrency trading, others remain skeptical. Central banks all over the world are working on better ways to control digital currencies, making crypto trading a risky proposition. There are, however, measures that can assist investors in avoiding severe volatility. Building a well-balanced cryptocurrency portfolio that includes Bitcoin, Dogecoin, and Ethereum could help you beat volatility. Furthermore, investors can invest a set amount of money in various cryptos on a monthly basis. This will increase your risk appetite in a methodical manner, allowing your portfolio to provide favorable long-term returns.

Avoid making trading calls based on hype

One of the most common mistakes made by new investors is relying on social media for cryptocurrency news. Social media buzz should never be used to make investment decisions. Because digital currency is such a trendy topic, misleading information about it spreads quickly.

Betting on Bitcoin Volatility

It's no secret that cryptocurrency is one of the most volatile asset classes on the market right now. Bitcoin prices have fluctuated by roughly 30% in a single session. Trading Bitcoin futures allows you to bet on volatility. The best method to do it is to buy both a call and a put option at the same time. Both the strike price and the expiration date must be the same. You must sell both the call and put option at the same time to exit when crypto prices fall or increase sharply.



High-Frequency Trading (HFT)

Quant traders utilize HFT, which is an algorithmic trading approach. This entails the creation of algorithms and trading bots that aid in the speedy entry and departure of a crypto asset. The creation of such bots necessitates a thorough comprehension of complicated market principles as well as a solid foundation in mathematics and computer science. As a result, it is more suited to experienced traders than newbies.

Dollar-Cost Averaging

It's advisable to consider that timing the market is close to impossible when it comes to identifying the optimum entry and exit points in a crypto market. So, 'Dollar Cost Averaging' is a good technique to go about investing in cryptos (DCA). DCA is a term that refers to investing a set amount at regular intervals. This method allows investors to avoid the time-consuming task of market timing and achieve long-term riches.
Exit strategy, on the other hand, could be difficult in the DCA approach. It necessitates a thorough examination of market trends as well as a grasp of the market cycle. Reading technical charts can also assist you in determining when to exit. Before making a decision, crypto investors should keep an eye on the oversold and overbought zones. You can refer to WazirX live charts for a better understanding of technical charts of various cryptos.

Also Read : Bajaj Auto Q4 Results: Profit jumps 10% to Rs 1,469 crore; company declares Rs 140 per share dividend


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